Op-Ed by Kaitlin Thompson and Daniel Tyrie
FFUW is 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 FFUW have popped up at all major universities across Canada, including at U of T, UBC and McGill. Last February, Université Laval became the first Canadian university to divest its endowment funds. Syracuse University in the United States saw returns of 12% on its divested endowment fund, demonstrating that the divestment decision is both environmental and fiscally responsible.
The divestment movement is not limited to the academic arena; it has become increasingly common in the private sector as well. More than $6 trillion has already been divested worldwide and the number is growing. In January of this year 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, recommended 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 on behalf of their beneficiary 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. Conservative estimates show that the University of Waterloo has already realized losses upwards of 14% on fossil fuel investments made in pension, endowment and trust funds, totalling over $20 million between 2011 and 2015. According to PhD candidate Truzaar Dordi, “Some may argue that the University should maintain its fossil fuel investments lest it lose out. However, the opposite concern – that keeping these investments is financially risky – may be the greater concern. The well-recognized terminal decline of the coal industry shows that not every bust is followed by a new boom once clean energy technologies mature.” This information 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 two degree warming limit.
The University of Waterloo prides itself on being a leader in sustainability and innovation. UW holds Canada’s largest Faculty of Environment and its 2016 Sustainability Report found that 542 courses are focused on or include sustainability. This May UW will take on the role of the Canadian-lead for the United Nations Sustainable Development Solutions Network, with its mission to support sustainable development leadership and learning among over 700 participating institutions around the world. 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 the students expect the university to practice what it preaches and take action now. University of Waterloo should maintain its reputation as a leader amongst 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. University of Waterloo – this is the time to divest.