Divestment is the Way to Go

It’s been almost exactly one year since the Concordia University Foundation made its announcement that it would reserve $5 million for investments in sustainable initiatives and social governance standards, which was, at the time, widely praised as a bold first step towards embracing the divestment movement in its entirety.

In light of this upcoming anniversary, let’s take a look at what divestment means, what the university has done since then, and where Divest Concordia stands on these matters.

What is the divestment movement? Divesting is literally the opposite of investing—the act of removing investments from a particular industry for social, political or ethical reasons.

The current global Divestment Campaign is pressuring institutions around the world to divest from the fossil fuel industry, in the interest of avoiding catastrophic climate change, and also to address the immediate harmful consequences of fossil fuel extraction, especially on the poor and marginalized.

Our aim is not to financially bankrupt these companies, but to educate society and expose the morally bankrupt actions of capitalizing on a resource from which humanity needs to break free.

The movement, which started in 2008, has since exploded. With a 50-fold increase in commitments this year alone, the total amount divested from the fossil fuels industry stands at $2.6 trillion.

These commitments can’t come fast enough—there’s no shortage of scientific evidence addressing the imminent threat of global climate change. Just last week, the World Bank (which is hardly a progressive institution) released research stating that without action, climate change can lead to more than 100 million people living in extreme poverty by 2030—that’s only the most recent study in a sea of reports that make Mad Max: Fury Road look like a pleasant documentary.

So back to the matter at hand: Concordia’s first steps towards the divestment movement. It’s important to understand exactly what this first step means, and also what it doesn’t.

In contrast to Europe or the United States, not a single university or college in Canada has even begun the actual divestment process. Concordia’s $5 million decision shows that the university is willing to publicly advocate for the social benefits of responsible investing, acknowledge the political impacts of joining the divestment movement and is beginning to take the environmental science of climate change seriously. This is an excellent first step, but let’s not get too ahead of ourselves.

The university administration, the Board of Governors and the Concordia University Foundation are responsible for the future of the university’s endowment fund. The endowment fund is the university’s savings account, acting as the financial backbone of the institution. Over the years the administration has opted to make Concordia’s endowment less—and not more—transparent, using pooled funds, which are under no obligation to disclose their investment portfolios.

The endowment fund’s accumulated interest and returns are used for bursaries, scholarships and other social benefits for students. Today, Concordia’s endowment sits at over $100 million, and if the distribution of investments has remained the same since, we can estimate the portion of that invested in fossil fuels and other related industries is roughly $12 million.

Being the caretakers of this fund is, no doubt, a titanic responsibility. But their responsibility goes beyond securing marginal returns and into the realm of social and environmental justice.

Endowment funds have done this in the past—a prime example being McGill’s divestment from exploitative companies during the struggle against the South African apartheid in the 1980s. Divestment has proven itself to be a successful tactic, and the fossil fuels divestment campaign—the fastest growing divestment campaign in history—represents a chance for any person or institution to support the global efforts towards climate justice. Entire countries, major institutions and even the UN have endorsed the divestment campaign. Why is this such a difficult choice for our administration?

Come on, Concordia. Full divestment is the only reasonable and ethical decision to make.

Noelia Gravotta, Matthiew Chehade, Trevor Smith are part of Divest Concordia.