UPDATE: The Memorial University Faculty Association (MUNFA) voted on Tuesday, April 28 to support fossil fuel divestment at MUN.
This Tuesday, we are asking members of our union, the Memorial University Faculty Association, to join the growing international movement for fossil fuel divestment. If we succeed, we will add to a list of institutions and organizations that includes, among many others, the British Medical Association, the Rockefeller Brothers Fund and — particularly interesting given the North Sea parallels with our situation — the University of Glasgow, which has committed to divesting its entire £128 million endowment fund.
We have already had good support: 29 Memorial academics quickly put their names to the motion that was sent to the MUNFA executive. Unsurprisingly, however, some faculty members are uncertain about the implications of our motion and the entire divestment campaign.
So what is fossil fuel divestment and why pursue it?
Quite simply, divestment means shedding investments in fossil fuel companies. The movement, which began in student groups—our motion includes a commitment to support the student-led Divest MUN—now includes over 800 significant global investors. These range from religious institutions and charitable foundations to social justice organizations and cities.
The recent commitment by Syracuse University to divest its entire $1.2 billion dollar endowment fund is the largest such pledge to date. Faculty at the University of British Columbia, with a similar-sized endowment, have also set a divestment process in motion. Closer to home, Mount Allison faculty have voted unanimously to support the student-run DivestMTA and to start the process of divesting their own pension fund. Similar motions are before universities and faculty associations across Canada and around the world, encouraged by a string of Nobel Laureates in the sciences and humanities.
The fiscal argument for divestment
The movement gathered momentum when Naomi Klein and Bill McKibben looked at research by the Carbon Tracker Initiative (CTI) that identified the threat of a carbon bubble akin to the housing bubble that was so central to the global financial crisis of 2008/09. That is, real limits to the amount of carbon the atmosphere can absorb mean that fossil fuels may be significantly overvalued, posing the threat of another market crash.
As Klein and McKibben point out, this research was produced for corporate investors. That should reassure those who fear divestment is a recipe for financial disaster. The opposite may be true: over-investment in fossil fuels may ultimately pose a much greater financial risk.
In fact, index-aggregating companies such as MSCI, which provides overviews for fund managers, and key economic figures, such as the Bank of England’s Governor Mark Carney, are warning investors and insurance companies of the financial imprudence of ignoring it. Meanwhile, major investment groups HSBC, Aviva and Standard Life are all exploring the risks posed by stranded assets.
The MUNFA Divest motion takes these warnings seriously. Asking our Pension Fund representatives to explore phased divestment is a matter of fiduciary responsibility, not folly. Fortunately, a growing group of managers, including the manager of MUNFA’s Legal Defence Fund, now specialize in such shifts of focus and can advise on the possible liability of investing in areas like co-mingled fossil fuel funds. (Of course, the Divest movement hopes such changes will see re-investment in sustainable energy sources, but we don’t presume to be fund managers.)
As for climate change…
The CTI research is based on devastatingly simple math. It calculates that fossil fuel companies and countries that act like fossil fuel companies currently hold in reserve five times as much fossil fuel as we can burn and still have a meaningful shot at keeping global warming below the critical threshold of two degrees Celsius — and they are looking for more. (Recent research in Nature paints a similar picture, and also gives a sense of the geopolitical challenges entailed.)
As academics, we are especially concerned that failure to act in face of the overwhelming scientific consensus…means abandoning our students to the consequences of our disregard.
The problem takes on extra urgency given how far we are on our way to that limit already, as research by NASA demonstrates. In terms of the human price, the World Health Organization estimates that over 150,000 people are dying each year because of climate change. Meanwhile, Memorial scholars have shown that the social and environmental consequences of climate change are putting Newfoundland and Labrador communities and industries in harm’s way.
Divestment not only sends a prudent financial message then. More importantly, it sends a clear moral message that we will not stand passively by as the damage continues. As academics, we are especially concerned that failure to act in face of the overwhelming scientific consensus—Andy Wells’s bizarre opinions notwithstanding—means abandoning our students to the consequences of our disregard.
Addressing climate change on an individual level can feel overwhelming. Collectively, the moral and political clout of the divestment movement could be enormously powerful. Similar campaigns contributed significantly to reigning in the corporate power of big tobacco and hastening the end of Apartheid in South Africa — which is why the Nobel Prize winner Desmond Tutu’s support for fossil fuel divestment is so significant. In short, divestment campaigns have worked. Fossil fuel industries are right to be worried.
Isn’t it inconsistent to call for divestment when we all use fossil fuels?
Our reliance on fossil fuels is not just a matter of free choice. Through a combination of inaction and conscious decision-making, we live in a world, locally and globally, that is engineered to keep us hooked on fossil fuels.
To give just a few local examples: we have little ready access to clean energy sources (indeed, the possibilities are legally restricted in this province); public transit here is woefully inadequate, particularly in the face of intensified suburbanization; and there is little government support for active transportation, such as cycling. More broadly, fossil fuel companies pour massive resources into political campaigns that range from tobacco industry-style dirty tricks to corporate lobbying against climate regulation.
As for the idea that industry is simply giving us what we want, hyper-acquisitiveness is not an innate human drive. As the anthropologist Richard Robbins shows, it has taken extensive social and political effort to turn us all into consumers.
So, while we can all do some things to lessen our impact — most obviously, through personal energy efficiencies and carbon offsetting for those who can afford it — voluntary action on an individual level is only one piece of the puzzle. In this context, divestment is another tool in the arsenal of harm reduction. It focuses attention not just on our own drug-like dependency, but on the traffickers who would profit in the short-term by fostering and exploiting that dependency while disavowing their responsibility to reduce that harm.
But aren’t we punishing those who can least afford it?
Others argue that it is unfair to demand carbon reductions just when much of the world is seeing the benefits of industrial progress.
Divestment is based on the idea that it is ethically inconsistent to profit from an industry whose entire business model…is grounded in planetary harm.
Of course we have a moral obligation to mitigate global inequality. But to say that this requires to continuing along the same destructive path is disingenuous and, ultimately, self-defeating. In fact, nations that leapfrog fossil fuel dependency can enjoy significant economic and health benefits over those getting hooked on greater carbon usage, but this must be a shared project of the global north and south.
On the good news front: gold-standard carbon offsetting firms are investing heavily in renewables in these countries. China, with its vast economy, is a world-leader in clean-energy development. And for inspiration check out the TED talk by the young Malawian, William Kamkwamba, who is being supported in his development from scrap materials of effective wind turbines that now aid to power local villages.
In short, divestment is based on the idea that it is ethically inconsistent to profit from an industry whose entire business model, as Naomi Klein has said, is grounded in planetary harm. If it is not the whole answer, neither is it an empty gesture. Instead, it should be seen as one part of a wider program for progressive change.
What does our motion call for?
First, the motion does not target anyone’s research or research money. It focuses specifically on divesting investment and endowment funds held by MUN and by MUNFA. It also calls for our members on the MUN Pension Committee, who are part of a multi-stakeholder body, to start exploring similar measures.
Second, it does not call for divestment to take place overnight. Standard divestment strategies endorsed by the Divest movement occur over five years to allow for readjustment through a phased-out approach. We are following their lead.
We are asking our university and our union to start a process that we realize will require some time. Ultimately, however, we believe it is the morally, financially and socially just way forward.
The full text of the motion reads as follows:
The MUNFA support Divest MUN in their effort to encourage fossil fuel divestment of Memorial University’s endowment and investment funds, and further that MUNFA call on its representatives on the University Pension Committee of Memorial to explore similar measures with respect to Memorial’s pension funds. Further that MUNFA also begin a process of exploring divesting from any fossil-fuel investments it has in its own funds/portfolios.