The University of British Columbia's board has rejected a call to sell off the school's oil, gas and coal investments.DARRYL DYCK/The Globe and Mail
The University of British Columbia's board of governors has rejected a proposal by faculty and students to sell off investments related to oil, gas and coal, marking the latest blow for a national movement to rid university endowments of their involvement in fossil-fuel industries.
Instead, the board voted Monday to put $10-million toward a new fund that would invest in low-carbon ventures, which will be set apart from the more than $1.4-billion the school currently has in endowments.
Alex Hemingway, a spokesman for the student campaign for fossil-fuel divestment, says his group is considering campus sit-ins and protests after "jumping through all the hoops" set up by the administration only to fail when the issue reached the board.
UBC's compromise strategy is the second of its kind among Canada's largest postsecondary institutions. In December, 2014, Concordia University also rejected a campaign calling for complete divestment and instead created a separate $5-million fund for non-fossil-fuel investments.
The University of Calgary, McGill and Dalhousie have all rejected divestment. University of Toronto president Meric Gertler is currently consulting on the issue, and school staff say he could make a decision within the next two months.
An analysis by Corporate Knights magazine published last November estimated that U of T's endowment had lost more than $550-million by not divesting three years earlier.
Even though the university has rejected a widespread selloff of fossil-fuel stocks, the school says the current downturn in oil and coal could mean schools are ultimately left holding very little stock in such high-carbon industries anyway,
"Investors will be making decisions based on the market realities, so we'll begin to see us shift away from carbon-intensive companies in any case," said Philip Steenkamp, UBC's vice-president of communications.
Mr. Steenkamp also suggested the downturn means now may not be the time to sell off fossil-fuel stocks.
"It would be an interesting question as to whether you sell fossil fuels, having seen that depreciation, or whether you wait and see if there's a recovery," he said.
As the price of oil dropped dramatically over the past year, the portion of UBC's endowments invested in fossil fuels shrank from about $110-million to $85-million. Meanwhile, overall endowments grew from $1.3-billion to $1.46-billion.
The school's finance committee made its recommendation to reject divestment in part because it stated it has a "fiduciary duty" to honour the endowment-fund donors. It also stated that other investors would just step in if UBC divested.
Oil prices have fallen by more than 75 per cent since mid-2014, spending the past year below $60 (U.S.) a barrel and two months below $40, with conflicting opinions about how long prices could take to recover.
Mr. Steenkamp said divestment campaigners characterize the issue as a moral one, but the university is committed to a "more effective way" of combatting climate change, namely committing to "very aggressive" reductions in the greenhouse-gas emissions of its campus.
"Our view is that the university's primary job is the teaching and research mission and we are leaders, probably global leaders, in sustainability on that front," he said.
Mr. Hemingway told the board Monday that the finance committee refused to meet with his group, UBC C350, before issuing its recommendation to keep the school's fossil-fuel investments.
He also said the external report commissioned by the committee limited itself to "only looking at one document for any evidence in support of divestment," which was his group's brief regarding the issue. "I'm a teaching assistant here and if a student submitted a paper to me that only cited one source for one side of an argument – that's not a passing paper," Mr. Hemingway said.
After the vote, several UBC C350 protesters, wearing black and holding signs, stood and chanted at the board: "You are failing us."
With a report from The Canadian Press
Mike Hager