Hey there, time traveller! This article was published 11/3/2017 (1219 days ago), so information in it may no longer be current.
University of Winnipeg student Andrew Vineberg worries his school is on the wrong side of history. And he’s not shy about letting the administration know about that.
The 23-year-old is among a growing number of students and faculty at the school concerned about how the university invests its money to help fund its future.
"Divest UWinnipeg is advocating for the University of Winnipeg to divest from fossil fuels — in other words: to get rid of its investments in the oil industry," says Vineberg, who is also a member of the University of Winnipeg Students’ Association.
"It is part of a larger fossil fuels divestment movement that exists all over the world and especially at a lot of university campuses."
Like campaigns at other universities, Divest UWinnipeg’s goal is to convince the post-secondary institution to align the investment portfolio of its arm’s-length fundraising arm — the University of Winnipeg Foundation — with its broader effort to become a sustainability leader.
Many post-secondary institutions are pushing the envelope of energy conservation and other environmentally friendly initiatives, including here in Manitoba.
But quite often the investment portfolios of their endowment funds — an important source of cash for the schools — lag behind the curve.
As a result, students around the world are increasingly pressuring their schools to divest, including here in Winnipeg where the province’s largest universities both have movements urging their schools’ endowment and pension funds’ investment arms to drop companies involved in the production, refining and transportation of fossil fuels.
The divestment movement, however, isn’t just limited to universities.
It’s a much broader campaign originally launched by environmentalists who believe if people are concerned about climate change, they should put their money where their conscience lays.
Yet, the drive across Canadian universities to get their endowment funds to divest may actually mark an important turning point for the investment industry overall, says the chief investment officer of a Vancouver-based money management company that specializes in strategies that omit companies involved in the fossil fuel industry.
"The social movement has started," says Wayne Wachell, the CEO of Genus Capital, which manages money for high-net worth and institutional investors, including the David Suzuki Foundation.
"And it’s not going to stop."
He cites the initiatives going on at universities across Canada as the start of a second wave of a three-step process common to many social movements, such as civil rights and the efforts to end Apartheid.
The first wave involves activists, churches and student associations.
"The second wave is typically universities, and we’re seeing some interest there."
An organizer with a national divestment campaign says while Canadian universities have been slow to get on board, post-secondary institutions in other countries have started to divest.
"There have been people all over the world who have been working on divestment. A recent report came out in December that found almost 700 institutions around the world have divested $5 trillion," says Katie Perfitt of 350.org, a global organization aimed at fighting climate change.
Among this list are dozens of high-profile universities, such as Stanford, Oxford and Yale.
"So it’s become a mainstream idea not only because we shouldn’t be investing in companies that are wrecking the climate, but also more and more the financial case for investment is becoming very clear."
The argument against divestment used to be portfolios that excluded fossil fuels would underperform those that did hold companies involved in hydrocarbon production. But Wachell says that’s not true.
"We think it’s a myth," he says, noting that energy represents only eight per cent of global capital markets. "It’s like saying, ‘I have to invest in the horse and buggy’ in 1905, as we saw the emergence" of the automobile.
So far, only one Canadian university has moved to divest of its fossil fuel holding.
"Despite teams on campuses across Canada organizing for divestment for five years, it wasn’t until very recently that a university committed to full divestment, and that was University of Laval," Perfitt says about one of Quebec’s largest post-secondary institutions.
The hope now is others, including the U of W, soon will follow.
To date, Vineberg says the university has been receptive on the one hand and evasive on the other. Its administration had offered to investigate the idea and present its finding to the board of regents at the school, which has the ability to direct the school’s endowment fund to divest.
"They didn’t do anything of that sort," he says. "They basically dropped the issue and the board of regents was pretty much kept in the dark."
The school, however, says it has been responsive to students and faculty.
"In response to student engagement on these issues, the UWinnipeg Board of Regents encouraged the Pension Board of Trustees and our Foundation (both arms-length entities) to create ‘green funds’ as a donor option," the university stated in an email to the Free Press.
"It also asked those boards to examine a policy to screen investments for environmental, social and good governance practices."
Moreover, it noted the school has long been a leader in the fight against climate change, even surpassing its goal "of achieving Kyoto compliance by reducing campus Greenhouse Gas (GHG) emissions by 30 per cent below our 1990 levels."
It further pointed to its efforts thus far being in line with other schools such as the University of Toronto, the University of British Columbia and McGill University.
Vineberg and other members of the school’s divestment movement consider these to be weak arguments against taking a more aggressive stance against climate change: divesting of fossil fuel investments.
"Essentially they’re saying they don’t want to do this because other universities haven’t done it yet."
Wachell says he understands the reluctance to divest.
"It’s typically the boards and policymakers that are lagging, but their decisions are often driven by donors."
And the "donor class" often has made fortunes off of the resource industry in Canada.
"It’s the old saying, ‘We’re drawers of water, hewers of wood,’ so there’s that resistance," he says. "If we were in California where the donor class is largely high-tech, there’d be a more favourable outlook toward divestment."
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Yet it’s inevitable that the university will divest, Vineberg says.
The question is when. Divest UWinnipeg wants to make it happen sooner than later. It’s currently lobbying the board of regents to get a motion to divest approved before the end of the academic year.
After all, he says, the school has a moral responsibility to divest. It should be a leader in the movement, showing investors — big and small — that it’s the right thing to do both ethically and, ultimately, financially because eventually the fossil fuel industry will be economically unsustainable — maybe not tomorrow, but years down the road.
And history may not look fondly on those who dragged their feet.
"Why can’t they be a trailblazer?" he says.
"It (the U of W) can’t be the first any more, but it’s ridiculous to think that it can’t be the second, and we’re afraid that it will be the last."
Fossil-free universities and colleges
Dozens of universities around the world have divested in fossil fuels either completely or partially, including these high-profile schools:
Boston University (coal and oil sands)
Georgetown University (partial)
Laval University (full)
London School of Economics (coal and oil sands)
Oregon State University (full)
Oxford University (coal and oil sands)
Stanford University (coal only)
Syracuse University (full)
Trinity College Dublin (full)
University of California (coal and oil sands)
University of Cambridge (coal and oil sands)
Yale University (partial)
— source: gofossilfree.org
How much of the University of Winnipeg Foundation’s Endowment Fund’s investment portfolio consists of fossil fuel-related companies?
Its portfolio exposure isn’t all that high — less than 10 per cent of total assets — and largely reflects energy’s share of global capital markets. Here’s how its $59 million portfolio breaks down in its fourth quarter 2016 report, ending Sept. 30:
• About 14 per cent of its Canadian holdings (which account for about 27 per cent of total assets) are invested in the energy industry. Companies include Suncor, Canadian Natural Resources and Cenovus. It also has holdings in pipeline firms such as Enbridge and TransCanada.
• Its U.S. equity holding (also making up about 27 per cent of all investments) has about a four per cent allocation to energy.
• Its international equity portfolio (about 16 per cent of total assets) allocates about 2.7 per cent to energy.
• Its fixed income portfolio (about 25 per cent of total assets) also has about a seven per cent allotment to the energy sector.
— University of Winnipeg Foundation’s 2016 fourth quarter investment report
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Updated on Monday, March 13, 2017 at 10:40 AM CDT: Tweaks quotes.