$43 Million: The Cost of McGill Failing to Act on Fossil Fuel Divestment


November 26th, 2015

$43 Million: The Cost of McGill Failing to Act on Fossil Fuel Divestment

New analysis shows high cost of not divesting from fossil fuels

Cost of deliberation

Left: Masi A. Quebec budget brings more cuts to universities: A statement from Provost Anthony C. Masi. McGill Reporter. 1 April 2015. Right: Heaps T. What kind of world do you want to invest in? Corporate Knights. 16 November 2015.

Montreal, QC – New analysis reveals that McGill has left more than than $43 million on the table over the last 3 years by failing to act on the community’s call for full divestment from fossil fuels. Corporate Knights, together with 350.org and South Pole Group used the newly-developed Decarbonizer tool to analyze several funds. Using the most recent publicly available investment information on McGill’s $1.3 billion endowment, they determined that McGill’s continued investments in fossil fuels cost the university $43,123,606 (US$32,330,177) in investment returns over a 3 year period.

This period coincides with the time that Divest McGill’s campaign has been active. Since their launch as the first Canadian fossil fuel divestment campaign in Fall 2012, Divest McGill has submitted 2 formal briefs to the McGill administration, presented the moral, scientific, and financial cases for divestment, and collected supporting signatures from thousands of faculty, staff, and students. Despite the clear evidence of the extensive social and environmental damage caused by the fossil fuel industry, the administration has failed to act in the 3 years since this serious issue was brought to their attention.

“At its core, fossil fuel divestment is about McGill’s moral responsibility to end its complicity in the grave social injury caused by the fossil fuel industry,” explained Divest McGill organizer Kristen Perry. “Right now, our university is standing on the wrong side of history, with companies whose extractivist business models are directly exacerbating the climate crisis. We already know that the social, reputational, and environmental costs of this are high, and this analysis confirms that the inaction of our administration has also cost McGill financially.”

Perry also noted, “the $43 million loss is especially poignant in light of the $39 million in provincial cuts to McGill’s budget for 2012-2015. McGill needs to invest in our university and divest from fossil fuels.”

Darin Barney, McGill associate professor of Communication Studies, added that “Whether it’s offsetting recent budget cuts, reducing the year-on-year deficit, or paying down McGill’s debt, this $43 million is real money that could have been used to address real needs on campus. These fossil-fuel investments are dragging us down in so many ways.”

Another Divest McGill organizer, Julianna Duholke, acknowledged the high volatility of fossil fuel investments, but focused on the long-term, saying that “scientific analysis has determined that there is a strict limit on the amount of carbon reserves that we can extract. As policies worldwide begin to reflect this reality, the returns on investments in companies that maintain an extractive, carbon-intensive business model are very likely going to continue to decline.”

Along with McGill’s endowment fund, the analysis looked at 13 other high-profile funds totaling $1 trillion in assets, including the Gates Foundation, ABP, and the Canada Pension Plan Investment Board. Losses over the past three years across the 14 funds exceeded US$22 billion, with the alternate decarbonized portfolio holdings producing a better financial outcome in every case but one.

Over US$2.6 trillion has been fully or partially divested from fossil fuels by around 500 institutions and many individuals globally, making this the fastest growing divestment movement in history.

Kristen Perry, Divest McGill Organizer, 438-888-9737, kristen.perry@mail.mcgill.ca
Toby Heaps, CEO Corporate Knights, 416-274-1432, toby@corporateknights.com



Notes for Editors:

14 Funds analyzed

Fund Size of fund in USD Estimated Cost of not decarbonizing  3 years ago6
Algemeen Burgerlijk Pensioenfonds (ABP): “Dutch Civil Servants Pension Fund”)   $382,344,000,000  $9,366,211,873
Australian National University Endowment7    $686,980,602 $53,850,841
Canada Pension Plan Investment Board   $199,825,920,000  $7,025,528,323
Future Fund (Australia)   $83,152,631,000  $1,546,602,354
Bill & Melinda Gates Foundation Trust Endowment   $40,564,000,000  $1,897,962,806
Harvard University Endowment (Harvard Management Company)   $37,600,000,000  -$206,290,9768
London School of Economics Endowment $147,939,674 $3,062,919
McGill University Endowment (McGill Investment Pool)7   $990,520,320  $32,330,177
New York City Employee Retirement System (NYCERS)7   $54,451,000,000  $1,618,154,962
Ontario Municipal Employees Retirement System (OMERS)7   $54,374,400,000  $756,153,815
Ontario Teachers’ Pension Plan (OTPP)   $115,081,907,200  0
University of Toronto Asset Management Corporation   $5,588,480,000  $419,418,629
Vermont Pension Investment Committee   $4,020,000,000 $79,387,949
Wellcome Trust $27,448,424,600 $352,680,885
Total $1,006,276,203,396 $22,945,054,557