The University of Toronto (U of T) Monday detailed its reasons for rejecting calls to have the school sell off its oil assets, arguing in a lengthy 45-page document fossil fuel divestment does not address global warming in any discernible way.
The University’s long-awaited report, “Beyond Divestment: Taking Decisive Action on Climate Change,” highlights a few notable explanations as to the futility of oil asset divestment in Canada.
Namely, fossil fuels make up but a small portion of Canada’s overall greenhouse gasses, and divesting from oil would reduce and weaken a healthy portion of the school’s endowment.
The report goes on to suggest a “blanket divestment strategy would be unprincipled and inappropriate.” The point is clear. The costs of divestment, according to the report, outweigh the benefits associated with the practice.
Prior to publishing the report, U of T President Meric Gertler and the Advisory Committee on Divestment from Fossil-Fuels argued it is more pragmatic to work within the fossil fuel industry to force it to ratchet down the supposedly harmful effects of oil development and production.
Keeping its oil assets, Gertler notes in the report, “permits the investor to exert pressure on that firm’s management to adopt practices that address ESG-related goals – by, for example, reducing the firm’s carbon footprint and GHG emissions.”
The committee, which was initially created by Gertler, had been awaiting a response from the president since it published a report Dec. 15 arguing divestment was a net positive gain for the school.
The committee’s report stated “fossil fuel firms engaging in activities that blatantly disregard the 1.5-degree threshold are engaging egregiously in socially injurious behaviour […] The University should, in a targeted and principled manner, divest from its direct holdings in such firms.”
Amanda Harvey-Sanchez, a student at U of T and supporter of divestment, said in a press statement she does not think the school should not be profiting from oil producers that are actively “thwarting” gains made to throttle so-called man-made global warming.
“By rejecting divestment as recommended by the committee, the President plans to maintain U of T’s investments in companies which the committee stated are imposing grave social injury,” Harvey-Sanchez added.
Research conduced by other universities seems to bolster U of T’s concerns.
A University of Chicago study shows a university portfolio that jettisons its oil and coal assets can expect to have returns reduced by 0.7 percentage points.
The University’s $6.5 billion in pension and endowment funds can expect a loss of $455 million in returns on investment.
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