The Van Mag follow-up: Divest UBC’s Alex Hemingway
Last week, we talked to UBC’s Philip Steenkamp about his university’s decision to vote against divestment from fossil fuels. This week, we caught up with Alex Hemingway, a PhD candidate and Divest UBC campaigner, to get his perspective on the matter
February 26, 2016
What was your reaction to last Monday’s vote? Were you expecting that outcome?
It was disappointing, because it’s actually really unusual to have students and faculty vote on the same issue. From a democratic perspective, it was a bit of a shock. On the other hand, you know, we had seen the committee signaling that it was going to oppose divestment. So it wasn’t a total shock from that perspective.
Do you think they went into the conversation with an open mind on the subject?
That’s a good question. It’s hard to know, having not been part of the conversation through the actual deliberation process. There were some indications in the released emails—the FOI emails around the Arvind Gupta affair—that top administrators were making comments that suggested that they were opposed to divestment before the committee to investigate it was even struck. I’m not convinced that their minds were entirely open, and you can sort of see that reflected in the process itself. They commissioned this lawyer’s report to look at whether they should go ahead with divestment, but it was extremely narrow [in focus]. That report only looks at one single document as the sole source of evidence in favour of divestment—that was the document that we wrote—and applies that against criteria that the university had.
So it’s sort of a bizarre exercise, for a university that presumably takes evidence and logic seriously, to evaluate a question on the basis of one document. And what was striking about that, even more so, was that even though they were relying solely on our document, they wouldn’t talk to us during the process of deliberation on divestment.
Can you expand on that? I know there was frustration expressed with the process and how various stakeholders were—or weren’t—consulted. The university made the point that it didn’t let CAPP [the Canadian Association of Petroleum Producers] give a presentation, and that by keeping all of the advocates out of the conversation they would be better able to process the information in front of them. What are your thoughts on that?
They made the point about CAPP at the board meeting, and it’s a bizarre point—CAPP, of course, is an external industry lobby, whereas we were a group of students, faculty, and staff that had put forward the proposal for divestment. So it’s really a bizarre false equivalence to say that not meeting with CAPP is the same as not meeting with your own students and faculty.
In terms of the consultation, I noticed in the interview you did that Philip Steenkamp references the fact that I spoke to the board. But it’s extremely misleading, because going back to May, June, July, and September of last year, we were asking to meet with the responsible investment committee, which is actually charged with looking into this issue. We’ve documented it, we asked to meet with them, and said that we thought it was important that we sit down and talk—and that was all refused. Now, after the decision had already been made and the finance committee had released an agenda [at the beginning of February] that showed they were about to vote against divestment, our group, UBC350, attended the meeting to observe. At the beginning of that meeting we asked if we could speak, and I was allowed to talk for a couple of minutes. But this was after the decision had already been made, and was about to be ratified by the committee. It was only after that, when we generated a lot of media coverage about the issue, that we started getting answers to our request to actually meet with the decision makers.
We got a reply from Martha Piper’s office, and later we got an invitation at the 11th hour—the Friday before the final Monday board meeting—to meet with the finance committee chair. But this was after the deliberations were over. The finance committee meeting and the full board meetings are generally pro-forma exercises to ratify the decisions that have been made over the past year.
Is there any hypothetical process or situation in which you can imagine a vote against divestment would have been acceptable to your group? Or is it more about the outcome than the process?
It’s both. I don’t want to lose sight of the fact that what this is all about for us is that we know that 80 percent of global fossil fuel reserves have to be kept in the ground, and we’re not seeing a response to climate change that’s proportionate to the scale and urgency of that reality. But we don’t even have to imagine—there’s a real world example of a more legitimate process looking into this issue. At the U of T, they convened quite a diverse expert committee to look into the issue that was external to the board—it was appointed directly by the president, and it had relevant academic experts as well as student and administration representation. They actually did a serious investigation of the issue, and they accepted submissions and held meetings with stakeholders around campus as part of the process. And they came back with a recommendation of partial divestment. That’s a sharp contrast with what I was describing earlier about the process here, in which the only evidence in favour of divestment that was allowed to be considered came from this one document, and there were no stakeholder meetings allowed.
Something in excess of 80 percent of the world’s fossil fuel reserves are controlled by state-owned enterprises, and therefore beyond the reach of a divestment campaign. Given that, how can divestment achieve the goal of discouraging the consumption of fossil fuels? Would it not merely shift that consumption (and the profits associated with it) from publicly-traded entities to privately-held ones?
I think that’s a really good question. There tends to be a little bit of misunderstanding of the mechanism through which divestment can make change. UBC withdrawing its investments is important, but of course the scale of those investments isn’t enough to put the industry out of business or anything like that. The point is that one of the crucial barriers to the scale of climate policy that we need to keep that 80 percent of global fossil fuel reserves in the ground, the critical barrier to progress on policy is the role of the fossil fuel industry in working to weaken and delay climate policies. That’s a political role that the industry has played, and it’s not hard to understand why. They would, of course, like to monetize those reserves, which are assets on their books, rather than leave them in the ground. But what we’d like to see is a situation where the industry not only acknowledges that reality, that across both the private and public sector we have to leave 80 percent of reserves in the ground, but actually act in a way that reflects that reality. We see soft support for some forms of climate policy from the industry, but it’s not proportionate to the nature of the problem. The basic premise is that this political role of the industry is one of the important barriers to progress on climate change. And so when an institution like UBC, a thought leader, shines a light on and confronts that frankly extremely destructive role, that’s an important way of undermining that influence.
Given that political objective, would it not make more sense to encourage institutions like UBC to target their investments in industry leaders rather than divesting completely from it? After all, in the tobacco industry, the divestment movement did nothing to actually harm their share prices—so wouldn’t it make sense for UBC to reward the companies that are doing the best work in terms of reducing their environmental footprint and supporting climate-friendly policies rather than a blanket withdrawal of its capital?
What the divestment movement has been asking for is a withdrawal from the top 200 holders of global fossil fuel reserves in order to reflect the reality of how much has to stay in the ground. If there’s a situation where, after a divestment commitment, some of those companies start to credibly commit to leaving the relevant proportion of their reserves in the ground, then we should talk about taking them off the divestment list. It’s not set in stone. But the reality is the core business model of these 200 fossil fuel companies is to dig up and extract as much as they can in order to monetize it. And I don’t think companies get a pass just because they’re making more positive noises on the climate file.
Is divestment the best way for UBC to make a statement when it comes to climate change and the importance of reducing the consumption of fossil fuels? Its endowment, and the amount of that endowment that’s invested in fossil fuel companies, is vanishingly small on a global scale. Its divestment, meanwhile, wouldn’t have any material impact on those companies. The university’s position is that it would rather fund its operations to the greatest possible degree, and that’s in part a function of being able to invest in fossil fuels—or at least have the option of investing in them—and have that academic operation be the one doing the speaking. What are your thoughts on that?
There are a few pretty important points in there. One of them is that I don’t think we should underestimate what the impact would be of one of the largest universities in Canada taking this kind of leadership to divest from fossil fuels. The industry is very conscious of the issue of social license, and of its standing in society—that’s why it spends money on advertising and lobbying and so on. We see the outcomes of social movements challenging social license in the pipeline debates across the country. So I don’t think we should underestimate the impact of a thought leader like UBC taking a strong stand on this issue by divesting.
But it really isn’t an either/or proposition. We don’t say that divestment is the one answer to climate change—far from it. Even within our own group, our roots are as a broader engagement group. The key thing, from our perspective, is that we need an all-of-the-above approach to tackling climate change. We’re in a narrow window where, as a country and as a planet, we need to act now. And we’re not getting action on the scale that we need, which means we need to use every tool at our disposal to push forward the fact that we have to keep a huge amount of reserves in the ground.
From the university’s perspective, the issue of funding and returns on investment is an important one, and of course it’s going to be something that the university considers when it looks at this. But this is really interesting, because as part of the divestment campaign we’ve put a lot of time into researching every aspect of the issue, and there’s a very considerable literature that suggests you can get the same—or better—returns from fossil-free investing. So the premise that divestment would actually hurt returns at UBC isn’t supported, and what was really striking about UBC’s response to us on this is that they didn’t present any research to the contrary. They simply asserted the point that fiduciary duty would be inconsistent with divestment. But it wasn’t backed by evidence.
If fossil-free funds really do outperform portfolios that have exposure to fossil fuel companies, as your September 15, 2015 position paper argues, why do you think the financial managers that run UBC’s endowment continue to invest in them?
Well, it’s a good question. We’ve been asking repeatedly to see the analysis on which they’re basing these decisions, and we haven’t received any of it yet. I would love to see UBC produce that research, because it contradicts the publically available research. It also contradicts the fact that we’ve seen over 500 institutions around the world, including 60-plus universities, commit to a form of divestment. So if the premise is that divestment is inherently inconsistent with fiduciary duty, are all these other institutions in breach of their duties? It’s a bit perplexing.
Last week, I spoke with UBC’s VP of external relations about this issue. Is there anything in that interview that you want to respond directly to?
On the voter turnout issue that Philip Steenkamp was talking about, this was pretty disingenuous stuff. In the student referendum that we held, the turnout was the typical student election turnout. You have to ask what your point of comparison was, right? In that election it was 22.4 percent—not less than 20 percent, as Steenkamp said—and the next year, when it wasn’t on the agenda, turnout was about 12 percent. So it was actually a bit above average when the referendum was held.
The other galling bit about that is this questioning of the democratic legitimacy of student elections. But what’s the turnout for board of governors members votes? It’s actually considerably lower—and this is supposed to be considered a legitimate body. And of course, the majority of the board of governors are un-elected. So it’s a bit frustrating to see them trying to minimize these university-wide referendums when it’s actually unprecedented to see both student and faculty voting on the same issue. And it’s disappointing because there was this little glimmer [of hope] during the board meeting—even when they rejected divestment there were criticisms of the process raised. To see them leaning back on these types of talking points is discouraging.