The recent recommendation from the finance committee of the University of British Columbia (UBC) board of governors to reject a call from students and faculty to divest funds from the fossil fuel industry is a refreshingly realistic view from the halls of academe.
UBC is among the more than 20 Canadian universities being targeted by on-campus groups to remove funds from fossil fuel companies.
The divestment movement argues that pulling investment dollars out of those companies erodes their bottom lines, exposes them to public shaming and puts a university’s money where its mouth is on climate change action.
But the reality is that, for the foreseeable future, fossil fuels will continue to be the world’s primary energy source for power generation and transportation, regardless of divestment decisions on university campuses. Divesting funds from energy companies might reduce shareholder support for their fossil fuel business, but it also eliminates shareholder opportunity to influence corporate decisions to clean up their operations and invest in developing alternative energy sources and technologies.
The university board’s recommendation rightly pointed out that divestment would not “meet the objectives of addressing climate change or influencing corporate behaviour,” nor would it be consistent with the board’s “fiduciary obligation to endowment donors.”
The university divestment movement might presume that corporate Canada opposes initiatives to reduce carbon emissions.
But a growing number of corporate leaders see carbon pricing as a key to weaning the world from fossil fuel dependence. Other keys to achieving that goal, as Suncor Energy’s Steve Douglas has pointed out, are “education, conservation, regulation and adaptation.”
Universities should be promoting that enlightened approach, because politicizing and demonizing what continues to be a vitally important energy industry is neither helpful nor effective in finding practical long-term solutions to reduce carbon emissions and counter climate change.
