Hear this story as reported on Tantramar Report, here:
A few weeks ago, Mount Allison University announced its membership in a new club.
The Sackville school is one of ten Canadian universities to form the University Network for Investor Engagement (UNIE), a coalition that will, as Mount Allison’s VP Finance and Administration Robert Inglis puts it, help schools, “collectively engage with companies in which they invest in the areas of environmental, social, and corporate governance, including engagement on climate change.”
The CEO of SHARE, a non-profit investor advocacy organization which is coordinating the UNIE, says Mount Allision and the other nine universities involved are, “showing leadership in addressing the climate crisis.”
Nick Nauss dares to disagree. Nauss is a second year student in Philosophy, Politics and Economics at Mount Allison, and a second year member of Divest MtA, a group determined to convince Mount Allison’s Board of Regents to divest their endowment funds from the fossil fuel industry.
Nauss in concerned that the move to join the newly formed UNIE is just window dressing, meant to detract from the fact that Mount Allison steadfastly refuses to divest itself from the companies controlling the world’s remaining fossil fuel reserves.
“It might sound good, in the wording of it,” says Nauss. “However, it’s blatantly a public image campaign to make sure that they can look like they’re being responsible in their investments.”
Nauss says there’s no teeth to the UNIE approach of shareholder engagement. “There’s nothing that these institutions can do that will effectuate enough positive change in the fossil fuel industry that will ultimately have an effect on reducing carbon emissions.”
Helen Yao is a third year Mount Allison student, also in her second year as a Divest MtA member. She doesn’t buy the line that by joining UNIE, with its focus on shareholder engagement, the university is “showing strong leadership in addressing the climate crisis.”
“When we’re looking at shareholder engagement with the fossil fuel companies, usually around 1% of their budget is dedicated towards shifting to sustainable energy,” says Yao.
Fossil fuels companies just aren’t equipped to make the significant shift, says Yao. “We have seen no evidence in the past that they had any inclination of doing so,” says Yao, “even when their own researchers and scientists told them that their actions would have significant consequences on the climate.”
“What we have seen is that they have funded misinformation campaigns, they have lobbied governments, they have continued to do things that secure their own profit,” says Yao.
TWO SCHOOLS IN UNIE HAVE COMMITTED TO PARTIAL DIVESTMENT
Nauss points out two of the other universities involved in UNIE–Concordia and the University of Victoria–have already made partial commitments to divestment. That shows, he says, that this new network is not an alternative to actual divestment.
“It’s one thing to be an institution to acknowledge that fossil fuel divestment is necessary and commit to it, and then also say, we’re going to try to push for better environmental, social and governance factors in our investments,” says Nauss. It’s another to be an institution like Mount Allison, he says, “which refuses to divest and then claims that this new network will effect positive change.”
MOUNT ALLISON’S FOSSIL FUEL INVESTMENTS
But how much does Mt A invest in fossil fuel heavy industries, anyway?
Every year for the past four years Mount Allison has disclosed a list of its endowment fund holdings. The university invests in pooled funds and not individual companies so it’s difficult to say at any one time to say how much it owns of, say, Google’s parent company, Alphabet. But in its holdings report, the university represents “the value of the proportion of the stock or bond as if it was owned directly by the University.”
The last report like this was issued for December 2019. Divest MtA took that report and cross-referenced it with something called the Carbon Underground 200, a list put together and maintained by FFI Solutions which identifies the publicly traded companies with the most coal and oil and gas reserves, according to their potential for their carbon emissions.
Nick Nauss did the math, and found that about $7.5 million of Mount Allison’s endowment fund was invested, through pooled funds, in some of the biggest owners of fossil fuel reserves in the world. That’s about 4.6% of the total endowment fund, says Nauss, and it’s been in that ballpark for the past 4 years.
Nauss says it makes both ethical and economical sense to move these funds away from companies sitting on carbon reserves.
“Fossil fuel divestment has gained a lot of momentum,” Nauss says, “and it’s only going to increase. You’re only going to see more institutions and funds be divested in the coming years.”
“So it actually does make perfect financial sense for Mount Allison to divest our funds from fossil fuel companies now, preferably yesterday, while we still can,” says Nauss.
Nauss doesn’t accept the claim that the future for fossil fuel companies is still unknown. “Whenever they try to say that we don’t know what’s going to happen… Well, I’m pretty sure we can all see in the grand scheme of things, what’s going to happen. It’s only a matter of time before they realize this is the right financial, social, and ethical thing to do.”
Some have argued that a good portion of the fossil fuel reserves owned by private companies is actually “unburnable carbon”. It’s a factor acknowledged even by one of the world’s giants in fossil fuels. In 2015, the chief economist for BP, Spencer Dale, wrote that existing reserves of fossil fuels discovered at the time would produce nearly three times the amount of carbon emissions that scientists have agreed should be our maximum, and which will raise global average temperatures by 2 degrees centigrade.
RESPONSIBILITIES TO ETHICS AND SUSTAINABILITY?
Yao is disappointed and frustrated that Mount Allison is continuing with its investments in fossil fuels.
“For Mount Allison to continue its so-called engagement with the fossil fuel industry means really that they want to keep putting money and resources into engaging with these companies,” says Yao. “And they want to justify this engagement by using the language of environmentalism and sustainability.”
This is a problem, says Yao, because the university’s responsibility should not simply be to maximize return on its investments, but rather to exist ethically and sustainably.
“Our university shouldn’t be run like a simply profit making institution,” says Yao. “We have to take into account factors such as sustainability or ethical investments. We think it’s important for the Board of Regents… to actually commit their money and their power and privilege towards shifting Mount Allison, and the greater community, towards sustainable investments.”
Yao says that the Mount Allison climate change strategy so far has focussed on small steps and individual actions, when something much more substantial is called for.
“They’ve kind of framed climate change as an issue of individual merits, and of incremental change,” says Yao, “when in reality, we’re looking at how much time we have left to shift to a sustainable economy.”
“To build a sustainable future we do not have the luxury of the incremental changes that Mount Allison is proposing,” says Yao.
Instead, what Divest Mt A is calling for is full fossil fuel divestment within the next five years.
“The only way to rid the university’s complicity in the climate crisis is to completely and utterly remove all attachments Mount A has to the fossil fuel industry,” says Nauss. “It’s the only solution that we can take to fully align with the IPCC protocol.”
This Friday, Divest MTA, and other divest groups across the country who are part of Divest Canada, will meet with the parent group of the new UNIE network, the Shareholder Association for Research and Education, or SHARE.
Next week, CHMA hopes to bring you more on that meeting, plus some reactions from Mount Allison University.
