It’s time for UW to divest from fossil fuels

Much to the dismay of students, the University of Waterloo has more than $68 million invested in some of the world’s most polluting companies, including Exxon Mobil, BP and Royal Dutch Shell. These companies are among the 50 that are responsible for 16 per cent of the temperature rise observed from 1880 to 2010 (NASA Goddard Institute for Space Studies).

The university has developed a Responsible Investment Working Group to provide the board of governors with recommendations to incorporate environment, social and governance criteria into investment decisions. The board of governors has its final meeting of the 2017-18 academic year on Tuesday. Fossil Free UW, a student-led organization, is calling on the board to recognize this growing divestment movement on campus and use this meeting to address divestment directly. We are joined by more than 600 students, faculty and alumni who have signed a petition asking the university to divest its fossil fuel holdings.

We are not alone. We are one of many student organizations across North America pushing our academic institutions to better represent our social values in a financially responsible way. Student-led divestment movements similar to ours have popped up at all major universities across Canada, including at the University of Toronto, the University of British Columbia and McGill University. Last February, Université Laval became the first Canadian university to divest its endowment funds from fossil fuel. Syracuse University in the United States saw returns of 12 per cent on its endowment fund after it divested from fossil fuels, demonstrating that the divestment decision is both environmental and fiscally responsible.

The divestment movement is not limited to the academic arena; it also has become increasingly common in the private sector. More than $6 trillion has already been divested worldwide and the total is growing. In January, the mayor of New York City announced $5 billion in divestment and a lawsuit against five major oil companies for their role in climate change. Lawsuits of this type had historically been limited to environmental groups and Indigenous activists. Norway’s trillion dollar Sovereign Wealth Fund, the largest in the world, has proposed full divestment in a move that shocked world markets. These two major developments mark the divestment movement’s transition into the mainstream and set a precedent of environmental accountability for major cities and nations around the world.

Divestment has become more appealing to mainstream actors not only for ethical and environmental reasons but also due to the financial implications. The fiduciary duty of an investor to achieve strong returns is no longer seen as a barrier to divestment, but rather a reason to divest. As green energy prices drop and climate consideration becomes a necessity, fossil fuel holdings have become increasingly risky. Research by PhD student Truzaar Dordi indicates that the University of Waterloo has already realized losses upwards of 14 per cent on fossil fuel investments made in pension, endowment and trust funds, totalling more than $20 million between 2011 and 2015. This suggests that markets have already begun to respond to the riskiness of fossil fuel investment. Considering that significant government and private action has been taken to reduce dependence on coal fired plants, it is reasonable to assume that similar actions will be made in the oil industry in order to meet the internationally accepted 2 C warming limit.

The University of Waterloo prides itself on being a leader in sustainability and innovation. It has Canada’s largest Faculty of Environment and its 2016 Sustainability Report found that 542 courses are focused on or include sustainability. In May, UW will host the United Nations Sustainable Development Solutions National Network for Canada. This kind of position puts the university in the international spotlight and is an amazing opportunity to lead by example, yet the university simultaneously is quietly investing in the fossil fuel industry that is responsible for devastating our climate and our future.

We expect the university to practise what it preaches and take action now. The University of Waterloo should maintain its reputation as a leader among Canadian universities, and embrace the win-win opportunity that divestment offers. This is our money and we expect it to be spent in ways that reflect our values, offer a secure financial return and preserve our future. UW students and faculty are demanding that the board of governors recognize the importance of divestment and represent the values of its constituents at Tuesday’s meeting. This is the time to divest.