Fossil Fuel Divestment Statement

Consideration of Fossil Fuel Divestment

Statement from Mr. Lawrence Stordy – Chair, Dalhousie’s Board of Governors

For the past several months, the Dalhousie Board of Governors, at the request of the advocacy group, Divest Dal, has been considering the merits of divesting the university`s holdings in publicly-traded companies that are large carbon producers. It has been assisted in this review by the work of Dalhousie`s Investment Committee (IC), which presented its final report to the Board on November 25th.

We believe in reducing green house gas (GHG) emissions. We understand and agree with the goals of Divest Dal, but cannot accept their proposition that Dalhousie divest its holdings in 200 publicly-traded energy and coal companies which are judged to hold substantial carbon assets.

During its review, the IC committee and the Dalhousie Administration heard from students, faculty, alumni and donors who expressed opposition to or support for divestment. Divest Dal represents one of 300 active divestment campaigns at North American universities. To date, no Canadian university has divested its holdings in carbon or fossil-fuel companies.

The importance of the climate change issue is underscored by the recently concluded agreement on GHG emission reductions, reached earlier this month by China and the U.S. A similar commitment to action on climate change was subsequently reached by G20 leaders at their summit in Brisbane, Australia.

While not an actor on these global stages, Dalhousie has long embraced and acted upon its responsibility to play its part in combating climate change. Dalhousie has recently invested $45 million in sustainability projects on its campuses, resulting in a 20 per cent reduction in its GHG emissions since 2009-2010, demonstrating that Dalhousie is taking a leadership role as an environmental steward in its day-to-day operations.

In order to reach a decision on divestment, the Board must consider its fiduciary duty to generate reasonable risk adjusted returns from a diverse portfolio of investments, taking into account the wishes of its benefactors. Divestment could undermine the execution of a diversity strategy, and would potentially frustrate the goal of generating such reasonable returns.

In addition, the Board believes it will have more influence with regard to climate change as an engaged investor than it would through a one-time decision to divest holdings in carbon companies. We also believe it is consistent with the mission of the University to work with all companies which support research that addresses the key issues of climate change – even if they hold significant carbon assets.

The Board appreciates the significant work that went into producing the Divest Dal reports, and endorses its goal of reducing GHG emissions. However, we are not convinced that divestment will help achieve these goals. The Board therefore accepts the recommendation of the IC that Dalhousie not divest assets in carbon-holding companies.

The Board also agrees with the recommendation that the IC investigate ways to allow new Dalhousie benefactors to channel their donations to environmentally sustainable fund options, and that it establish a mechanism for enabling this donor choice as soon as possible. We also endorse the IC’s proposals to report annually on all holdings in publicly-traded companies, and to continue to press external fund managers to incorporate the United Nations Principles for Responsible Investing (UNPRI) in their practices.

In closing, we would like to thank the stakeholders who made thoughtful contributions to this debate, and the IC for its thorough review of the issues surrounding divestment.