To an outsider, university divestment campaigns might look like a hopeful but impractical social movement led by naive cadres of sign-waving students. The truth, however, is that divestment is more successful and has more transformative potential than what first appears. Largely hidden but tightly woven connections between universities, finance and fossil fuels have provided ongoing support for continued extraction. Those connections, however, are now being exposed by student divestment activists and focused fact-finding by groups such as the Corporate Mapping Project.
The university divestment movement has gained incredible momentum over the past months, with full divestment commitments from the University of Toronto (U of T), Simon Fraser University (SFU) and another partial divestment from the University of Victoria (UVic). These victories could not have happened without the tireless student activism over the past near-decade. New estimates show fossil fuel investments becoming worthless by 2035, exposing the precarity of the fossil fuel industry in even starker terms. The investment conversation is rapidly changing as a result, revealing divestment as a mainstream strategy to avoid stranded assets and shield portfolios from climate-related financial risks. Despite this strong financial case and the clear moral imperative of divestment, most Canadian universities are still lagging and doubling down on false solutions. Much of this strategy is supported by a business-as-usual approach by university boards and close ties between boards, endowments and corporate officers connected to finance and fossil fuels. But this strategy is failing as students and researchers increasingly expose these conflicts of interest and divestment campaigns evolve in response.
New estimates show fossil fuel investments becoming worthless by 2035.
The oily influence of fossil fuel industry donations
Decades of neoliberal governments have meant a steady decline in public funding for Canadian post-secondary institutions, from 82.7% of university operating funds in 1982 to a mere 54.9% in 2012. By 2019, provinces like Ontario had eroded grant funding even more drastically, to a meager 24% of universities’ total revenues. This shortfall has pushed universities to supplement their bottom line with private revenue sources, including accepting donations from fossil fuel companies. These funds come with strings, however, and companies do more than subtly influence decision-making; they also control universities with cash and even resort to outright threats. Dalhousie University is a case in point.
Despite its impressive organizing power, the Dalhousie divestment campaign has faced staunch opposition. In July 2015, Divest Dal filed freedom of information requests to uncover a potential source of this resistance. The revealed records showed that, as the administration was deciding on a divestment motion, it was simultaneously working with Shell Canada on a new donor agreement. Dalhousie states that their close relationship with Shell Canada dates back to the 1960s and celebrates their role as an inaugural partner in Shell Canada’s Campus Ambassador Program. Between 2006-2016, Shell Canada had donated $1.9 million to Dalhousie University, including $500,000 for the Shell Experiential Learning Fund, which supports fossil fuel industry-related guest lectures, events and field trips and an additional $100,000 specifically for off-shore oil and gas-related learning opportunities.
At times, however, this cozy relationship has soured and revealed the iron hand in the corporate glove. Reporting by the National Observer uncovered a statement from the university’s Dean of Science where a Shell senior executive revealed the company was monitoring the divestment movement and “would look unfavourably on any university that divested” when it came to future donations. Given the pervasive corporate capture of our universities, the success and power of divestment movements become even more apparent.
Public institutions run by private interests
Corporate influence has simultaneously extended to university decision-making bodies through appointments to boards of governors and investment committees. As the Canadian Association of University Teachers (CAUT) identified, as of 2016, 49.1% of the board of governor members at Canada’s 15 research universities were representatives of the private sector (e.g. fossil fuel, finance, legal and other corporate executives). Laurie Adkin, a U of Alberta political science professor, provides an in-depth look at the expanding population of fossil fuel executives on Canadian university boards. While industry-affiliated board members are barred from directly promoting the firms they’re connected to, these affiliations instead shore up a value system that upholds the predominance of the fossil fuel industry. This growing trend of university corporatization echoes the broader economic trend of neoliberalism. Top-down, corporate-managerial models, populated by an influx of vested interests, have become increasingly commonplace in universities and have produced a widening divide between the interests of the campus community and governing bodies, contributing to increasingly hostile relations between students and administrations. Divestment has become a flashpoint for this disquiet, and despite its overwhelming student support, many administrations have remained rigid in their opposition.
Industry-affiliated board members shore up a value system that upholds the predominance of the fossil fuel industry.
McGill’s board, which controls the CAMSR, comprises external members, all of whom hail from the private sector. However, none of the members on the committee have any real expertise in the area of responsible investment. The committee’s chair, Cynthia Price Verreault, has held numerous executive positions at PetroCanada. The committee is staffed with private investment experts who have experience as executives of Canada’s leading fossil fuel financiers.
In the case of UVic, its Foundation (a private charity that controls the university’s endowment fund) recently divested its equities after a near-decade of student pressure. While this is the most significant divestment action the university has taken, its Foundation avoided a pledge to full divestment, unlike SFU, U of T, UBC and others. As with McGill, this divergence is likely tied to the Foundation’s board structure and clear ties to the fossil fuel industry. The Foundation has received strong criticism from UVic professors like Dr. James Rowe. He exposed the oily influences on its board with members holding past professional ties to fossil fuel interests, including the Royal Bank of Canada—the world’s second-largest investor in the fossil fuel industry, Horizon North Logistics—which builds modular camps (“man camps”) for oil and gas production, and others. UVic’s Foundation has no student or faculty representation, operates on a closed committee and has limited transparency.
The power of corporate boards, vested interests and fossil fuel industry donations helps to explain universities’ default responses to divestment campaign pressure: false solutions and greenwashed alternatives. Mirroring the corporate sector, universities have time and time again rejected divestment in favour of guideline-based approaches such as Environmental Social Governance (ESG), carbon intensity reduction policies, shareholder engagement and signing onto the UN Principles for Responsible Investment (UNPRI). While these strategies may have some benefits, such as increasing financial transparency and setting norms around other social goals, they ultimately do little to address the fossil fuel industry’s unparalleled contribution to the climate crisis. Instead, these false solutions serve to distract students from the root causes of climate disruption. These ineffective and PR-focused actions are a form of “new denialism”–a dangerous offshoot of outright climate denialism that serves to greenwash, confusing the public on the scale of climate action needed while maintaining business-as-usual practices.
Guideline-based approaches do little to address the fossil fuel industry’s unparalleled contribution to the climate crisis.
Major universities have also banded together to resist student and faculty divestment demands. A new coalition, the University Network for Investor Engagement (UNIE), is dedicated to shareholder engagement and “responsible” investment practice discussion. While UNIE isn’t directly opposed to negative screening (i.e. divestment), it’s also clear that the network has limited latitude to take action against bad climate actors. When shareholder engagement with a company has been ineffective, they encourage university partners to discuss and consider alternative forms of engagement, including divestment. However, aside from U of T and Concordia, no other UNIE partners have committed to divest from fossil fuels fully, and many have fossil fuel and banking interests at the governing table (e.g. McGill and Dalhousie). With a largely ineffective mandate and members such as U of T and SFU moving to full divestment, this collective seems likely to further fray and splinter.
Pathways to full divestment and beyond
University governance structure and representation pose the biggest threats to divestment success and the democratic capacity of post-secondary institutions. While increased corporate influence is now common across Canadian universities, some boards are more representative of community interests than others. The University of British Columbia (UBC)’s board, for instance, is populated by a far more diverse group of community stakeholders, including representatives of the non-profit sector, in contrast to McGill’s controlling bloc of corporate actors. Successful divestment campaigns must identify specific bottleneck members, apply student pressure to reform these bodies and advocate for regulations to eliminate vested fossil fuel interests.
In the long run, divestment campaigns should advocate for a board system with stronger community-based representation and a majority of students, faculty and community members (e.g. representation from Indigenous nations). Organizers should consider promoting community interests in university board appointments in the interim. Community-based ad hoc institutions could monitor the selection processes for external board appointees and produce data to act as a benchmark for university decisions.
Despite the strength of industry influence on university campuses, student divestment campaigns continue to build the power necessary to push back against the fossil fuel industry. A key strength is the movement’s localized focus, bolstered by its connection to a national and global movement (Bellieveau 2018). This resource-sharing opportunity is now being actualized in so-called Canada through the Divest Canada Coalition, which launched in September 2020. This national coalition allows campaigns to identify their common barriers and share lobbying strategies and lessons learned from over the years. Diverse internal alliances are also critical to campaign success, allowing them to build traction by developing broad support among key campus groups such as the faculty association, undergraduate and graduate student unions, Indigenous student unions, equity advocacy groups and university staff labour unions. Faculty leadership also plays a critical role in sustaining divestment pressure. Student-led campaigns ebb and flow with annual student leadership turnover and often have a one-year expiry date. Faculty supporters can provide continuity and informational support to incoming student leaders and funding for supportive studies that can refute and counter greenwashing disinformation efforts.
Student divestment campaigns continue to build the power necessary to push back against the fossil fuel industry.
After years of resistance from universities, divestment organizers are now shining a bright light on the vested interests within administrations and governing boards, uncovering direct ties to the fossil fuel industry through avenues such as substantial donations, supported research and shared board members. It’s time for universities to establish board systems with a majority of student, faculty and community representatives, to exclude fossil fuel industry affiliated members and to reduce the number of private sector external members. Provincial governments also need to step up to the plate and raise the overall funding balance so universities aren’t reliant on corporate funding. Across Canada, exposing the corporate capture of universities has changed the game for some divestment campaigns, however there is still ample work remaining to free our public institutions from the influence of Big Oil.
A shorter version of this article was published in the National Observer.