by Rachel Ward
Dalhousie University could be the first university in Canada to end its investments in fossil fuel companies. The debate, according to a recent report from the Board of Governors’ Investment Committee, is split between wanting to support sustainability and not wanting to alienate major companies that fund the school’s research.
A final decision to disinvest or not will be made in six weeks, at the November Board of Governor’s meeting.
At issue is about $20-million invested in 35 companies related to coal or oil and gas industries, says the report. That’s 4.3 percent of Dal’s total investment portfolio, valued at $478 million.
Income from the endowment portfolio is used in part to fund scholarships and research chairs. Last year the entire portfolio brought in income of $19.7 million—just a fraction of the $638.5-million the school pulled in from all sources last year.
Dalhousie does not make public how well different funds within the endowment portfolio perform, so it’s impossible to know the exact financial effect of divesting of fossil fuel companies.
A student group called Divest Dal has been pushing for the divestment discussion, and now wants the Board of Governors to decide. It has met with the Investment Committee, attended board meetings with ever-growing groups of supporters, and submitted three proposals of its own. On Tuesday about 200 students attended the board meeting, so many some people couldn’t fit in the room.
“It’s a risky investment for us to be putting our money in these companies because their intent is to burn it all, when actually, they can’t,” says Katie Perfitt, a member of Divest Dal, the group lobbying the board. “There are going to be pressures on governments to regulate and reduce carbon emissions, so those companies are going to suffer immensely because they can’t actually burn the carbon that they want to.”
The Investment Committee released an interim report for board members to review, which raises several questions. It contains no recommendations or positions, but simply shows both sides of the issue.
The report says the board must balance environmental and fiscal responsibility. Dalhousie has a Sustainability Department and new, eco-friendly buildings, says the report, and divestment “would likely enhance Dalhousie’s reputation.” Yet it lists potential damaging, spin-off effects.
“Should the University educate students to work in resource industries in which it would no longer invest?” asks the report. “Would resource industries be more likely to withdraw their support for research projects or co-op projects?”
The divestment movement, led by students, is active across Canada and in the United States. No school in Canada has yet to make the leap, although Perfitt says the University of Victoria is close. Dalhousie has considered this, with the report noting prominent universities in the US falling on both sides of the argument.
For Dalhousie, the board must decide, the report reads, if cutting investment ties with fossil fuel companies will “help or hinder” profit. That answer must then be weighed against ethics and the school’s mandate.
Divest Dal’s most recent proposal, submitted to the Investment Committee on October 9, argues divesting is aligning money with values. It says this was a useful tool to combat both Apartheid in South Africa and tobacco companies.
Fiduciary responsibility, says the proposal, “is often interpreted as a legal responsibility to maximize profits at the expense of other factors. This is inaccurate… the fiduciary responsibility to act in the interest of stakeholders requires a commitment to future students and intergenerational equity, promoting long-term stability over unsustainable short-term gain… Schools also have a mandate to consider broader social, environmental, and ethical factors as opposed to a sole focus on increasing economic profit.”
At Tuesday’s meeting, with the room jam packed, board members, says Perfitt, seemed to be the most supportive yet, with some speaking in support of at least considering divestment.
Perfitt says the change could be done gradually, without losing any profits, leaving the debate up to values, not finance. The group has members with investing expertise, says Perfitt, who’ve found it’s possible. The proposal from Divest Dal also notes many banks now offer green investment branches for organizations interested in divestment.
“The only reason they would say no is if we have a hostile board that has ties to the fossil fuel industry,” says Perfitt.
A few board members do indeed have connections to related industries. From Nova Scotia Power, there’s President and CEO Bob Hanf and former Vice President of Marketing and Public Affairs Sherry Porter. Board member Aubrey Palmeter is president and CEO of East Point Engineering Limited. Lori MacLean does communications for Encana Corporation, which controls the Deep Panuke natural gas project.
“The boards members would assess the merits of the information as presented, and make decisions that are in the best interest of the university,” Brian Leadbetter, Dalhousie’s director of communications tells the Halifax Examiner.
George McLellan, the current head of all Nova Scotia health authorities except the IWK, is chair of the investment committee and vice chair of the board. But only Leadbetter, a university spokesperson, is speaking about divestment at Dalhousie.
Leadbetter says the investment committee will present its recommendation and members will vote at the end of November. Perfitt says Divest Dal will be there to watch it happen.