University of Toronto Divestment
Meric Gertler, president of the University of Toronto, was on CBC's As It Happens yesterday discussing his institution's decision not to divest from fossil fuels in their investment portfolio. Have a listen to the University of Toronto Divestment story on CBC:
For a similar perspective on divestment, NEI Investments' Ethical Funds have an FAQ section that explains their position.
In brief, both the University of Toronto and Ethical Funds believe that the current fossil fuel industry is unsustainable and that we all need to move toward a sustainable energy system. They stated that there are alternatives to divestment that they believe will be more effective in making change happen. Divestment is seen as not impacting fossil fuel usage (or demand) or levels of production especially since 80% of fossil fuel reserves are state-owned and so aren't affected by divestment efforts. Also, since divested dollars need to be re-invested somewhere, the other investments (say, banks) may indirectly support fossil fuel companies while selling off the fossil fuel companies won't significantly affect the producers because demand for their investments is still strong.
An alternative to broad divestment can include divesting from the worst actors in the industry, while working to reduce both supply and demand for non-renewable energy. Ethical Funds alternative plan of action includes the following:
- Exclude the least progressive companies and industries (e.g. coal).
- Engage companies to encourage more innovation, diversify and lower the demand for fossil fuels.
- Advocate for progressive policy that contains a price on carbon.
- Collaborate with stakeholders and build consensus on how best to approach and transition to a low carbon economy.
The University of Toronto president also mentioned similar themes as well as adding that the school has direct influence on "research and education focused on addressing the challenges of climate change" and can also shrink its own carbon footprint.