Divesting UNB from fossil fuels: a brief history

As the effects of climate change become more dramatic, the need for policy changes becomes urgent. Many organizations are under pressure to stop investing in fossil fuels, a process called “divestment.” Post-secondary institutions across Canada and around the world have invested endowments, pension, and asset funds in fossil fuels over previous decades, including the University of New Brunswick through its investment partners SEAMARK Asset Ltd. and Vestcor, the New Brunswick Crown investing corporation.

In 2013, UNB’s Renaissance College student Richelle Martin launched the Fossil Free UNB campaign centered on a petition to get the university to divest its endowment holdings from fossil fuels. Even though the petition had hundreds of signatories and was endorsed by the UNB Student Union, the UNB administration did not commit to divestment from fossil fuels.

Julia Hansen, a UNB alumna involved in Fossil Free UNB while at the university, spoke to the NB Media Co-op about their efforts to pressure the university to divest and the university’s response. “Divestment is a public statement, that recognizes the fact that it is unjust and irresponsible to profit off the destruction of our planet,” says Hansen. “I came to divestment with a sense of ethical responsibility.”

According to the campaign Go Fossil Free, universities making commitments to divestment in Canada include Laval University, University of Ottawa, and Université du Quebec à Montréal. However, in general post-secondary institutions in Canada lag behind their US, Australian, and British counterparts in commitments to fossil fuel divestments. Globally, the fossil fuel divestment campaign has been “by far the largest anti-corporate campaign of its kind.”

At UNB, “the first was push back from the Investments Committee,” says Hansen. “Although they were willing to engage our group, it felt cursory. They were giving us time to speak but only because they didn’t want to look like they were silencing students.”

One argument presented by the UNB Investments Committee, and reiterated in documents disclosed to Fossil Free UNB, was that divestment would not have a significant impact on fossil fuel companies: “Little impact in environmental issues can be achieved by divesting.  Other investors will take the place of those who divest, with little impact on the target firms” reads a document sent to Fossil Free UNB by Larry Guitard, former University Treasurer. However, private-sector investment in fossil fuels has been falling consistently every year, and most fossil-fuel development relies on government subsidies. A key concern not yet addressed by the university is the ethics of investing in fossil fuels when the scientific community consensus is clear that fossil fuel investment must stop.  

A possible explanation for why Canadian post-secondary institutions are averse to divestment is the growing influence of the oil industry in these institutions since the 1990 Mulroney government cut transfer payments to the provinces for post-secondary education. Many universities now receive significant research funding and donations from fossil fuel companies and rely on private sector investments in fossil fuels for revenue.

The connection between university programs and fossil fuel funding is explicit in the names of programs such as the University of Calgary’s Enbridge Research Chair in Psychosocial Oncology or the University of Waterloo’s Imperial Oil Seminar in Computer Science for Young Women.

However, sometimes the connection is indirect. For example, a report from Dalhousie University has explicitly connected the $1 million in average annual funding they accept from fossil fuel companies and their reluctance to divest. Dalhousie Dean of Science Chris Moore was quoted in a 2016 report from the university’s senate saying, “A senior executive at Shell… told me directly that the company is monitoring the university divestment movement closely and would look unfavorably on any university that divested in regard to future investment.”

Concerns that a university divesting from fossil fuels would have less investment income are misplaced. A report by Genus Capital, a B.C. investment firm with a fossil-free investment division, shows that fossil-free funds perform just as well or better than funds which include fossil fuels in their investment mix. Another analysis by consulting firm the Aperio Group suggests that for large institutions, the impact of divestment on the organization’s finance are usually “statistically irrelevant,” implying many universities would be able to survive divestment without significant impacts on their finances.

UNB alumna Hansen says that students need to be involved in pressuring their institutions to divest, and that student organizations should be taking the lead. “Getting the Student Union to approve this resolution felt a bit like pulling teeth,” says Hansen. The UNB Student Union’s national affiliation, the Canadian Alliance of Student Associations (CASA), has issued no statements to date dealing with university divestment. Other student union associations such as the Canadian Federation of Students (CFS) and Association pour une solidarité syndicale étudiante (ASSÉ) have supported divestment campaigns on university campuses.

Abram Lutes is an environmental action reporter with the RAVEN project summer institute.