Checking through my routine administrative emails today, I was completely surprised to see a message from president Meric Gertler announcing that U of T will divest from fossil fuels:
The evidence of a climate crisis is now incontrovertible. The most recent report of the Intergovernmental Panel on Climate Change adds further urgency to the need for individuals, businesses, institutions and governments to act swiftly to respond to this global threat, using every tool available to them. World leaders will begin gathering in Glasgow at the end of this month for the COP26 meeting, where progress in the fight against climate change will be assessed and new strategies to avert a climate catastrophe will be considered.
As owners of financial assets such as endowments and pension funds, universities have both an economic imperative and a moral obligation to manage these assets in ways that encourage carbon emission-reducing behaviour in the wider economy. With the increasing financial risks associated with fossil fuel production – as well as those downstream economic activities that rely heavily on fossil fuels as their energy source – there is a strong motivation for universities to shift their financial capital away from carbon-intensive sectors and firms, and towards those businesses that are leveraging the shift to green energy and carbon-conserving technologies.
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First, UTAM will divest from investments in fossil fuel companies in the endowment fund beginning immediately. Within the next 12 months, it will divest from all direct investments in fossil fuel companies. For those investments made indirectly, typically through pooled and commingled vehicles managed by third-party fund managers, UTAM will divest from its investments in fossil fuel companies by no later than 2030, and sooner if possible.
Second, UTAM will commit to achieving net zero carbon emissions associated with the endowment portfolio by no later than 2050. Moreover, UTAM has recently joined the UN-convened Net-Zero Asset Owner Alliance, making the University of Toronto the first university in the world to join this group of institutional investors. Membership in the Alliance compels signatories to achieve progressively demanding targets every five years en route to net zero, ensuring achievement of this ambitious objective in a transparent and accountable way.
Third, UTAM will allocate 10 percent of the endowment portfolio to sustainable and low-carbon investments by 2025. Based on the current size of the endowment, this represents an initial commitment of $400 million to such investments.
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[I]n the last few years I have heard from many members of the U of T community who have urged me to deploy every means available to address the existential crisis we now face. None have been more eloquent or impassioned than our students, who have the most at stake. I want to thank them – and other members of our community – for their activism and commitment to this important cause. I would also like to acknowledge the important work of the President’s Advisory Committee on Divestment from Fossil Fuels, whose report marked a key milestone in the journey towards today’s announcement.
It will be fascinating to learn more about what prompted the decision. It certainly hasn’t been the result of a highly visible and escalated recent activist campaign. While the Toronto350.org campaign was ongoing, we would often remark that the most helpful thing for us would be if Harvard divested…
The campaign began on April 16th, 2013 when I went to the president’s office for information and ended up meeting with Tony Gray.
University of Toronto to fully divest $4 billion endowment from fossil fuels by 2030
https://www.thestar.com/business/2021/10/27/university-of-toronto-to-fully-divest-4-billion-endowment-from-fossil-fuels-by-2030.html
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University of Toronto to divest from fossil fuel investments by end of 2030
https://www.theglobeandmail.com/canada/article-university-of-toronto-to-sell-off-all-fossil-fuel-investments-by-end/
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University of Toronto to divest all fossil fuel investments
https://www.reuters.com/article/canada-climate-investment/university-of-toronto-to-divest-all-fossil-fuel-investments-idUSL1N2RN2NV
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University of Toronto Divesting $4 Billion Endowment from Fossil Fuel Investments, Commits to Net Zero Carbon Emissions by 2050
https://www.yahoo.com/now/university-toronto-divesting-4-billion-175000171.html
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U of Toronto to divest its endowment of fossil fuels
https://www.nationalobserver.com/2021/10/27/news/u-toronto-divest-its-endowment-fossil-fuels
Open letter: Divestment is great news, but it’s still not evidence-based climate action
We should be setting more ambitious goals than those laid out by President Gertler
https://thevarsity.ca/2021/11/13/open-letter-divestment-is-great-news-but-its-still-not-evidence-based-climate-action/
U of T meets Fossil Fuel Divestment Commitment
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The university has since confirmed that University of Toronto Asset Management Corporation (UTAM) has completely divested from direct fossil fuel companies as of October 27, 2022. UTAM is also currently on track to completely divest from indirect investments by 2030. Despite this achievement, students involved with Climate Justice UofT are still demanding that U of T’s federated colleges, the University of St Michael’s College, the University of Trinity College, and Victoria University, divest from fossil fuels.
TV: I do want to speak about the steps from these groups’ recommendations to implementation. In 2014, you appointed an advisory committee to look into whether U of T should divest its financial holdings from fossil fuels. In 2016, you rejected that committee’s recommendation that U of T divest, but you reversed course six years later in 2021. Can you walk us through how divestment decisions are made at the presidential level?
MG: I would describe that process a little bit differently. That advisory committee deliberated extensively, sought extensive consultation, and wrote a very thoughtful document which made the case for why university action in this space was quite important and urgent. They did recommend a specific form of divestment — it was not wholesale divestment, and it had a number of specific tests associated with it.
I was aligned with the spirit of their recommendations that the university take some action, but I didn’t actually think that their recommendations would move us far enough, fast enough. We calculated that, had the university simply divested from investments it held directly or indirectly in fossil fuel companies, it might have reduced the carbon footprint of our portfolio by about 13 per cent. Instead, we embraced a different approach where we applied an Environmental, Social, and Governance framework to all of our investments.
In a few years, University of Toronto Assets Management (UTAM) was able to reduce the carbon footprint of our portfolio by 39 per cent: three times larger than what would have happened had we simply divested from fossil fuels with the passage of time.
Simultaneously, third-party fund managers began coming forward and offering new investment vehicles that were similar to their existing funds but eliminating fossil fuel investments. By 2021, when we were doing our annual assessment of our progress, we thought that the time was right to implement a divestment strategy.
https://thevarsity.ca/2024/09/23/u-of-t-president-meric-gertler-sits-down-with-the-varsity-for-the-last-time/
U of T’s fossil fuel holdings rise after divestment pledge
https://www.nationalobserver.com/2024/10/23/opinion/university-toronto-divestment-myth
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In fact, UofT now invests more, in real absolute dollar terms, in the fossil fuel industry than it did when so-called divestment was announced almost four years ago. This might seem hard to believe, but let’s run the numbers.
In its most recent annual investment report, UofT’s investment corporation, UTAM, explains that a smaller percentage of its endowment investments now goes toward supporting the fossil fuel industry (from 2.0 per cent of net asset value on Dec. 31, 2021, to 1.4 per cent on December 31, 2023). But over that same period, UTAM’s total net asset value has risen from $7.2 billion to $8.2 billion (see UTAM 2022 report pages 5-6). Thus, while the value of UTAM’s indirect investments in the fossil fuel industry has fallen by 0.6 per cent of net asset value, UTAM’s total net asset value has simultaneously risen by about 14 per cent during that same period.
You don’t need to be a UofT professor to do the math: UTAM’s indirect investments in the fossil fuel industry have gone from two per cent of $7.2 billion in 2021 (i.e. $144 million) to 1.4 per cent of $8.2 billion by the end of 2022 (i.e. $164 million). The value of UofT’s indirect fossil fuel investments amounted to $144 million in 2021 and $164 million two years later — an increase of $20 million in indirect fossil fuel investments.
Evidently, the UofT’s celebrated fossil fuel “divestment” was an empty gift. Further, the deception succeeded in having a debilitating effect on climate organizing at the university, since so many students, faculty and staff have been seriously misled by the administration’s claims concerning divestment.