Ultra Vires


Looking Back on a History of Divestment

When passionate student advocacy means navigating and resisting the University’s bureaucracy

On October 22, 2021, University of Toronto President Meric Gertler announced the University’s commitment to divest their investments in fossil fuel companies in the endowment fund and to eventually achieve net-zero carbon emissions in this fund by 2030. The endowment, valued at $4 billion, is a restricted fund which supports the University’s teachings and research. However, it is only part of the University’s investments and does not include the $6 billion pension fund, the estimated combined endowment of $664 million of the three federated colleges, or endowments associated with the School of Theology and Sunnybrook Health Sciences Centre. Campaigns for divestment of these funds are ongoing but outside the scope of this article.

In his message, President Gertler noted that “none have been more eloquent or impassioned [in calls for divestment] than our students, who have the most at stake.” As a student who witnessed the divestment organizing on campus, I was shocked. This advocacy happened because of students’ determination in explicit opposition to the administration’s efforts to prevent and neutralize advocacy. In this context, and in the history of student activism at this University, President Gertler’s appreciation feels hollow at best. 

Divestment at the University

Since the 1980s, there have been at least five divestment campaigns on this campus. In 1988, the University pledged to completely divest endowment funds from companies operating in South Africa during apartheid. The Faculty Association approved divestment of the pension funds in 1990. In 1992, the University rejected a call for divestment from tobacco industries, but eventually committed to divesting from them by 2007

In 2008, the group Students Taking Action Now: Darfur (STAND) called for divestment from companies backing military violence in Sudan, but the campaign’s success is unclear. Finally, students have called for divestment from companies operating in Israel as early as 1994, and, most recently, as part of the Boycott, Divestment, and Sanctions (BDS) movement since 2006.

In each campaign, students and faculty have expended enormous effort just to survive, let alone be successful. The biggest barrier is maintaining the continuity and institutional memory such that any momentum can survive the inevitable turnover as students graduate. In comparing older divestment campaigns with the history of fossil fuel divestment, and particularly the anti-apartheid campaign, it seems that the University has adopted increasingly bureaucratized and decentralized governance models so that effective advocacy takes longer and demands more resources each time. 

Responses to Divestment Campaigns

This process began immediately after the first post-secondary institution committed to divestment from South African apartheid in 1977, though the first calls for divestment at this University only began in 1983. In 1978, the Governing Council approved their Policy on social and political issues with respect to University divestment (the “Policy”). Still in force, this Policy requires members of the University to submit a brief with 300 signatures from the University community that outlines the social injury at the heart of their divestment campaign. The President establishes an ad hoc committee, composed of members appointed from the University community, to consider the brief and make recommendations. 

In October 2014, Toronto350.org, a group which had been organizing for fossil fuel divestment since 2012, presented their brief for divestment to begin this process. President Gertler appointed an ad hoc committee who released their report in December 2015, calling for divestment only from fossil fuel companies that “blatantly disregarded” regulations. By March 2016, President Gertler published his White Paper titled Beyond Divestment: Taking Decisive Action on Climate Change (the “White Paper”) in response to the committee’s report. President Gertler did not explicitly commit to divestment, but instead proposed using Environmental, Social and Governance (ESG) factors to inform investments and “decision-making.” He also pledged to sign various climate agreements and to fund research. 

Much has already been written about how ESG factors are unreliable, and how, as of January 2022, 59% of companies are not reporting their ESG factors in their annual reports. Students argued that the adoption of ESGs were an instance of “greenwashing,” where companies market themselves as environmentally friendly while taking no substantive steps towards change. The same idea is also present in President Gertler’s October announcement where the White Paper was characterized as a “key milestone in the journey” to full divestment, though they were fundamentally opposed to student demands.

The decision to invest based on ESG factors has also reduced the problem of climate change only with respect to the fact that fossil fuel companies pollute, foregoing an intersectional lens which, for example, understands fossil fuel production in the larger context of capitalism, colonialism and anti-Indigenous sovereignty. The recent announcement makes the same mistakes as well; solutions focus on fossil fuels, not the wider problem of climate justice. 

The idea of “responsibly investing” based on vague metrics is an old one. When students raised the issue of divestment from South African apartheid in 1983, the University first argued that using their financial assets to express disapproval of the South African government would be inappropriately political, and then committed to partial divestment based on vague criteria found in the Sullivan Principles. These principles, which required equity in hiring and wage increases in South African workplaces, faced vehement objection on the grounds that they took no real steps to make systemic change. The University also began to offer up to four bursaries to Black South African students in 1985.

When the President commissioned another review of the divestment policy in 1987, Professor A.P Thornton, the author of the report, unequivocally supported full divestment on the grounds that University investment is an inherently political act. Partial divestment was ineffective.

Even after the Governing Council approved full divestment of the endowment fund in 1988, the University had more work to do. Divestment of pension fund assets was delayed until 1990, when the Ontario government passed legislation amending the “prudent investor” standard required of pension trustees, under the Trustee Act. This debate continued even after these investment policies were changed and the Business Board called on the University to rescind the policy in 1993. Nelson Mandela would be elected in 1994, and South Africa’s Truth and Reconciliation Commission was struck in 1995. In 2000, the University gave an honorary Doctor of Laws degree to the late Archbishop Desmond Tutu, the South African anti-apartheid leader who has also expressed support for BDS and divestment from fossil fuel companies.

Financial Restructuring

Financial reporting has become less transparent and further removed from the University. The University of Toronto Asset Management Corporation (UTAM) was created in 2000 and took charge of the University’s endowment and pension funds. In 2007, the University reaffirmed support for responsible investment, rather than divestment based on social responsibility, by creating the Responsible Investment Working Group, composed mainly of law students, but otherwise disconnected from broader student organizing. This Working Group evolved into a Committee of students, alumni and staff, and most recently, a Committee exclusive to UTAM and its senior officers. 

In 2019, climate justice organizers filed a request for information pursuant to the Freedom of Information and Protection of Privacy Act (FIPPA), seeking disclosure of details of University investments in fossil fuel companies. The request was unsuccessful. This was a far cry from the President’s voluntary disclosure of investments in 1987. Moreover, the FIPPA response states that by June 30, 2019, there were “no direct holdings of public equity investments [of fossil fuel companies] in the Pension and Endowment portfolios managed by UTAM.” This statement is inconsistent with the 2021 announcement that “[w]ithin the next 12 months, [UTAM] will divest from all direct investments in fossil fuel companies.”

Whether intentional or not, the University’s restructuring is creating a significant barrier for students wishing to hold the institution accountable. Furthermore, as finances become more removed from the main institution, advocacy, directly to those in charge, requires far more resources. In the context of fossil fuel divestment, the University has pooled its pension funds with those from Trent, Guelph, and Queen’s Universities in a new corporation, the University Pension Plan Ontario, founded in July 2021. 

Prior campaigns have taught climate justice organizers that their work is not finished. A broad coalition of students and student unions, faculty, and labour unions have recently formed a coalition named Divestment & Beyond UofT, which will advocate for divestment of the pension fund, and continued divestment from fossil fuels. Heartened by the recent divestment announcement, students affiliated with Divestment & Beyond are organizing events with the University to continue the conversation. Efforts are being made to connect with divestment movements across Trent, Guelph, and Queen’s Universities.

Looking Ahead

The anti-apartheid campaign in the 1980s ran parallel to the growing concern about the health impacts of tobacco products and increasing calls for divestment from these companies. In a 1985 Governing Council debate on divestment from South Africa, a government appointee, opposed to the idea of the University taking a “political” stance, asked whether divestment from apartheid implied divestment from tobacco. The answer, we would discover in 2007, was yes. 

The University finally accepts that investments of a $4 billion endowment fund can be used to shape the global conversation on climate change. From apartheid, to tobacco, to fossil fuels, students have always been quick to identify ways the University can make substantial, global changes with its investments. Students do “have the most at stake.” We do not have time for another eight years to form a plan to cease the harms caused by university investments. 

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