Open Letter

We, the undersigned students, alumni, faculty, staff and members of the public, call on all the boards and administrators of educational institutions across Canada to take real leadership in the face of the climate crisis by fully divesting all investment funds (e.g. endowment funds) of their institutions from the fossil fuel industry and reinvesting in sustainable and just alternatives by 2025. For the past 8 years, students around the world have been calling on educational institutions to end their investments in the industry primarily responsible for driving the climate crisis. Unfortunately, Canadian educational institutions have responded with negligence and delay, claiming climate leadership while propagating half-measures and false solutions. For example, the Investing To Address Climate Change Charter, released and signed by numerous Canadian universities this summer, is not only inadequate, but pretends to address the climate crisis while deflecting responsibility from taking real action.

We call on Canadian educational institutions to comply with the following demands, in consultation with their local divestment groups:

1. Divest from the past: Commit immediately to fully divesting from companies involved in the extraction, processing and transportation of fossil fuels and ensure all funds are re-allocated by 2025. Initiate divestment campaigns from other harmful industries, including police foundations, private prisons, arms manufacturers, and any corporation that, through their operations, violate Indigenous peoples’ right to free, prior, and informed consent, as outlined in the United Nations Declaration of the Rights of Indigenous Peoples.

2. Reject false solutions: Recognize that the incorporation of environmental, social, and governance factors (ESG), as well as the simple reduction of the “carbon intensity” of an institution’s investment portfolio is an illegitimate alternative to full divestment. Educational institutions must supplement these insufficient responsible investing practices with full divestment from fossil fuel companies.

3. Invest in the future: Take meaningful leadership in the adoption of a Canadian Just Recovery by investing at least 5% of investment funds in community projects that advance racial, economic, environmental and social justice.

Educational institutions are supposed to prepare us for our futures. Instead, they are actively financing their destruction. By remaining invested in these industries, Canadian educational institutions are choosing to stand with corporations and their exploitative business models over the wellbeing of people and the planet. It is well beyond time for institutions in Canada to take real action on the climate crisis. 

We acknowledge that a few universities have already started moving in this direction, with the Université Laval, Concordia University, University of British Columbia, and the University of Guelph committing to full fossil fuel divestment. It’s time for the rest of Canada’s schools to follow their lead. 

Divest From The Past

The climate crisis is wreaking havoc worldwide, exacerbating extreme weather events, poverty, food shortages, forced displacement, armed conflict and other disasters worldwide. These impacts amplify existing inequalities, disproportionately hurting the most marginalized communities. The fossil fuel industry is the primary driver of the climate crisis, having knowingly destabilized the planet’s ecological balance for decades. The fossil fuel industry is also one the biggest perpetrators of racial and colonial violence with a long history of forcing Indigenous peoples from their lands, polluting the air, land, and water of Indigenous, Black, and People of Colour (IBPOC), and financing the colonial police force. 

In order to avoid irreversible climate catastrophe, we must keep at least 80% of known fossil fuel reserves in the ground. Instead of winding down production to a safe trajectory, fossil fuel firms are continuing to push for new pipelines, new mines, new drilling projects and exploration of new reserves. Global fossil fuel production is heading for 50% more than is consistent with 2°C of warming over pre-industrial levels and 120% more than 1.5°C by 2030, spelling disaster for our planet. Fossil fuel companies have spent the past five decades obstructing meaningful government action on climate change by pouring billions of dollars into misinformation campaigns and lobbying. 

In less than a decade, 1,244 institutions have shown moral leadership in standing up to the biggest climate criminals by divesting over $14 trillion from fossil fuels. They’ve also made a prudent financial choice. Fossil fuel investments are fundamentally risky and overvalued. For one thing, these companies are valued on the assumption that they will extract and burn approximately five times more fossil fuels than the climate can handle. If we are to save our planet from catastrophic climate change, asset owners will have to write off $20 trillion in stranded assets. Ongoing structural risks to the fossil fuel sector include rising extraction costs, low and even at times negative oil prices, the competitiveness of alternative energy sources, litigation, public opposition, and the growing divestment movement. Due to the poor performance of fossil fuel companies, investments have incurred significant losses for years. BlackRock, the world’s largest asset management firm, made the decision to divest from coal in 2019 after an estimated $90 billion loss from investment in fossil fuels. Portfolios that screen out fossil fuels, on the other hand, consistently perform equal to — if not better than — portfolios that do not. Trustees have a fiduciary duty to manage long-term risks of their endowments. Investing in fossil fuels is a direct violation of that duty and could result in trustees being held liable.

Globally, fossil fuel corporations constitute an enormously powerful, multi-trillion dollar industry. In order to transition towards a just and sustainable future, we will need to break the hold the fossil fuel industry has over our political, financial, educational, social and cultural institutions. We are looking to our educational institutions to harness their intellectual and moral authority to help remove social license from this industry. Full divestment by such institutions will send a clear, unapologetic signal to policymakers and broader society that  the power of this industry must be reigned in. 

Reject False Solutions

In June 2020, the University of Toronto and McGill University announced the Investing to Address Climate Change charter, signed by 13 other Canadian universities, in an attempt to signal action on climate change. The charter called on signatories to adopt frameworks of responsible investment by incorporating environmental, social, governance (ESG) factors into their investing practices and measuring the carbon intensity of investment portfolios with target reductions. These investing practices are misleading and flawed, being used by investors to allow for continued investment in some of the largest fossil fuel corporations. When it comes to ESG, ESG ratings are not standardized or regulated. Rating firms use different methodologies and metrics, leading to inconsistent and widely contradictory ratings. This allows firms to claim they are leaders in an ESG area while not adhering to consistent comparative standards. In some cases, a company’s score is calculated relative to its global industry peer group, meaning that decent ratings can be given to a firm that simply performs better than the average of  their peers — even if average standards are low.

“Low carbon” investing commitments are also misleading. Investment carbon footprinting methodologies only take into account direct emissions (scope 1 and 2), excluding the emissions of the product “downstream” (scope 3). For example, because approximately 99 percent of life-cycle emissions from coal occur during combustion, these emissions are excluded from a coal mining company’s investment carbon footprint. Thus, fossil fuel extraction, transportation and refining companies may be  considered “low carbon” by these carbon accounting methods. In 2016, when UBC initially proposed a “low carbon” fund, the fund was projected to include companies like Enbridge, Shell, ExxonMobil and Kinder Morgan. These companies are clearly not low carbon, for the reasons outlined in this letter. Any financial criteria that does not expunge these corporations from the institution’s investment portfolio has fundamentally failed as a strategy to reduce greenhouse gas emissions. Furthermore, fossil fuel extraction and transportation companies are some of the leading culprits in land grabs and injustices against  Indigenous communities. It is well documented that  fossil fuel project ‘man camps’ are directly linked to the Missing and Murdered Indigenous Women and Girls epidemic. By continuing investment in these companies, educational institutions are directly financing genocide against Indigenous peoples and violence against women, girls, and 2-spirits.

There is no credibility to the argument that shareholder engagement with fossil fuel companies can compel these companies to transition to clean alternatives. Their very business model depends on exceeding the warming limit of 2°C. Renewable energy makes up only 1% of fossil fuel companies’ capital expenditure, making it apparent that these corporations are not transitioning at the pace necessary to meet global climate targets. Divestment is the only reasonable responsible investment approach when it comes to these companies. 

Invest in The Future

Our present moment is wrought with intersecting crises — a global climate emergency, a pandemic, ongoing racial and colonial violence, and an incoming global recession that will exacerbate existing economic and social inequalities. Across Canada, communities have been calling on leaders and institutions to Build Back Better and embark on a Just Recovery as we collectively emerge from COVID-19. The federal government has responded to these calls with programs like CESB, CERB, and EI benefits, demonstrating that they are able to mobilize resources to the scale demanded by these crises. However, these income support measures are only a beginning, and have been insufficient in several regards (for example, with respect to people with disabilities and migrant workers). We call on our leaders and institutions at all levels to work together to move us towards a future that guarantees safety and security for all and centres justice, equity and Indigenous sovereignty.

By allocating investment capital into local community projects, such as clean energy, safe and affordable housing, sustainable local agriculture, community wealth operatives and worker-owned businesses, educational institutions can play a role in shifting our society from an extractive to a just and regenerative economy — one that works for all and sustains us for the future. In line with national calls to defund the police and abolish the prison-industrial complex, we have an opportunity to re-allocate wealth towards communities that have long been exploited, especially Black and Indigenous communities.

We call on our educational institutions to think about what type of future they are preparing us for. This is their opportunity to invest in a just and sustainable future for their students and to divest from an unjust and unsustainable status quo. It is not an exaggeration to say that the fate of humanity lies in how we collectively respond to this moment.

Signed,

Climate Action Carleton/ of Carleton University 

Climate Justice Climatique uOttawa / of the University of Ottawa                

Divest Dal / of Dalhousie University                                     

Fossil Free Lakehead/ of Lakehead University                                      

Divest McGill/ of McGill University

Climate Action of the University of Alberta/ of the University of Alberta

Climate Justice UBC (formerly UBCc350) / of the University of British Columbia 

Fossil Free Guelph / of the University of Guelph                        

Divestment and Beyond, Leap U of T, The School of Environment / of the University of Toronto                                 

Divest Sheridan/ of Sheridan College                                          

SFU350/ of Simon Fraser University                                                             

UdeM Sans Pétrole/ of de Université de Montréal                          

Divest MTA/ of Mount Allison University 

Students for Direct Action/ of the University of Calgary

UTS Sustainability and Environmental Action Committee / of the University of Toronto Schools

Divest UVic / of the University of Victoria

Fossil Free Waterloo/ of the University of Waterloo 

Divest UWinnipeg  / of the University of Winnipeg 

Climate Crisis Coalition/ of Western University