WHAT IS DIVESTMENT?
For an institution to “divest” means to withdraw its investments from a specific industry, and redirect that money into a more responsible and ethical portfolio.
WHY DIVEST FROM FOSSIL FUELS?
By definition, investors hope that the companies they have stakes in grow and offer profitable returns. The fossil fuel industry is the last thing we wish to see grow. That is why Divest McGill urges our University to stop supporting coal, oil and gas coal companies.
Divestment is about acknowledging that money carries power, and that it is up to us to use that power to send strong political statements. Divestment also attacks the legitimacy of the fossil fuel industry by raising awareness on its damaging impacts, whether to human rights, the environment or democracy. That’s what makes it a tactic for climate justice. Let’s be clear: it is not a panacea; yet, it is part of the large range of bold actions needed to fight the climate crisis and engage in a just and truly sustainable transition.
Divestment would be all the more significant if performed by an institution which praises itself for being a leader in sustainability like McGill. A big reputation comes with great visibility and large responsibilities. As students, we will hold our administration accountable.
On Social Injury
In order to officially divest, McGill would need to find that investing in fossil fuels causes “grave social injury.” Social injury is defined as “the grave injurious impact which the activities of a legal person is found to have on consumers, employees, or other persons, or on the natural environment” (CAMSR, Terms of Reference, 2018)
As we argued in the 150-page research brief in March 2015, anthropogenic climate change does represent a grave injurious impact because it:
1. Puts pressure on food systems,
2. Causes inundation of densely inhabited coastal areas,
3. Increases the frequency and intensity of extreme weather events,
4. Poses serious direct risk to human health,
5. Leads to ecosystem collapse,
6. Threatens First Nations groups and Indigenous cultures,
7. Poses security threats,
8. Damages infrastructures of cities, including Montreal,
9. Initiates positive feedback loops which are known to accelerate other consequences in an abrupt and non-linear manner.
Now, because as supplies of coal, oil and gas, fossil fuel companies have a vested interest in climate change inaction, these corporations have played and continue to play a major role in frustrating the enactment and enforcement of the domestic and international laws that protect individuals’ health, safety, and basic freedoms in the face of the climate crisis. They do this by:
- Lobbying governments against climate change policies,
- Funding of anti-scientific climate-denial propaganda, mirroring the strategy of the tobacco industry (an industry McGill divested from due to its harm to society)
- Promoting insufficient technical “solutions” such as carbon sequestration. Read our research brief for the full story and all our sources.
THE CASE FOR DIVESTMENT
*you can read the full version of all the texts cited below as well as their bibliography in our Publications section
“The moral case is simple. As long as universities like McGill don’t divest, they remain caught in a glaring contradiction: betting their prestige on preparing young people for the world while betting their dollars on making it uninhabitable.”
(Martin Lukacs, journalist at the Guardian and one of the alumni who returned their McGill diploma; The Guardian, March 2016)
"The IPCC report that came out on [October 6th, 2018] outlined a future that is more dire than any of us are prepared for [...] We need to act. We need to be bold and fearless in the face of climate change [...] We invite CAMSR to consider that we are living in a day and age where fossil fuels are no longer going to be sustaining us.”
(Open Letter from Faculty to McGill’s Board of Governors, 2014)
“McGill has divested for moral and political (as opposed to purely financial) reasons at least three times in the recent past: in the 1980s from companies doing business in South Africa in 1980s; in the first decade of the 21st Century, from corporations doing business in Myanmar and tobacco firms. Such divestment campaigns nearly always result in stronger government action effectively reducing the harms caused by offending companies.”
(Senate motion presented by Gregory Mikkelson, overwhelmingly adopted on September 12th, 2018)
“If we say that we’re going to address the climate risk, as countries and businesses are [doing], it means that the value of these fossil fuel assets will fall, will actually collapse; because the value of fossil fuel assets is based on the potential of exploiting the entire reserves of fossil fuels that are in the books of these companies. So if we say that we’re only going to exploit 20, or 25, or 50, or 60 percent of these reserves, it means the value [of the investment] will fall by that much. You’re investing in a stock that will be a “stranded asset” soon.
So if you’re to keep your investment in fossil fuels, you’re making a bet that the world will not be acting decisively on climate. […] It’s a completely unethical posture for any investor to say, ‘I’m betting on the destruction of the planet.”
(Karel Mayrand, director of the David Suzuki Foundation in Québec and one of the McGill alumni who returned their diplomas in sign of disapproval of their alma mater’s investment policy, The McGill Daily, October 2015)
MISCONCEPTIONS
“It’s much too complex to divest because all kinds of investments could be connected to fossil fuel firms indirectly.”
Divestment is complex: we agree! That’s why Divest McGill has proposed a very targeted divestment program from only the top 200 fossil fuel companies as measured by reserve. Our 2015 submission to the Board actually suggested a preliminary divestment strategy from only Enbridge and Shell. We conducted case studies on these two companies, which found both environmental and social injury caused by these two companies.
“Divestment has no impact, so it’s a distraction from real solutions to climate change.”
It has worked in the social rejection of apartheid and tobacco. In any case, this mentality of searching for a panacea will not work; we acknowledge that many solutions are required to properly tackle climate change.
“McGill’s investments are a drop in the bucket for the fossil fuel industry. Divesting will not affect them.”
The primary goal of divestment is not to financially cripple the industry. The goal is to signal to policymakers that supporting the fossil fuel industry is not in society’s best interests so they should no longer be supported by governments through subsidies and loose regulations.
Universities are havens of knowledge and thus carry important social clout and intellectual authority. We as students, professors, and administrators can take advantage of our privilege in being here by using that clout to empower a shift towards a low carbon economy.
“McGill should keep its fossil fuel firm shares and initiate “shareholder resolutions to encourage changes in company practices” (CAMSR report, p. 15).”
“Shareholder action” only works for specific industry changes. The problem with fossil fuel firms is their entire business model. A shareholder can’t ask them to phase out their product.
“There’s no reason to focus on the fossil fuel industry. Every company has some environmental impact.”
The fossil fuel industry is fairly unique: it is a powerful lobby with a vested interest in specifically preventing emissions reductions, which are essential to proper climate policy.