The Divestment Dilemma
On 24 January, students received a proud email from Vice-Chancellor Glyn Davis announcing the University’s long-awaited Sustainability Plan.
“The Plan is the product of many months of collaborative work by staff, students and our wider university community, designed to strengthen the University’s contribution towards better management of the earth’s climate,” Davis’ email reads.
Over the last few years, we’ve seen the University continually champion itself as a leader in campus sustainability.
We’ve also seen students camp out on the Chancellery Lawn and stand naked on top of the Old Quad in the name of divestment.
The Plan, which sets the agenda for now until 2020, calls on students and staff to help actualise the commitments and goals of the Sustainability Charter, released in March last year.
Divided into six key commitments – operations, research, teaching and learning, engagement, governance and investments – it sets ambitious operational targets such as achieving zero net emissions from electricity by 2021 and carbon neutrality before 2030. The Plan also states that by 2020, water usage will be cut by 12 per cent, wastage will be reduced to 20kg per person, and 100 per cent of staff air travel emissions will be offset.
The major research goal outlined in the Plan is to “develop industry partnerships that emphasise our resources for sustainability research including the campus as a living laboratory.”
By 2020, all undergraduate degrees will ensure that students can “understand and apply sustainability knowledge and values to practice in their field.”
Another target is to engage not only experts but also the public in the sustainability debate. The Plan details merging the ideas of industry and academic experts, policy leaders, students, staff and the community at large.
However the University offers no promises to break investment ties with the 21 fossil fuel companies which are listed on the Carbon Underground 200 ranking. This list, maintained by Fossil Free Indexes, reports the global top 100 coal companies and top 100 oil and gas companies with the highest carbon emission potential, based on their reserves.
These 200 companies have a combined potential to burn over 474 gigatonnes of carbon dioxide.
Instead, the University has promised to set up a “sustainable investment framework” by the end of this year and to divest from companies that do not satisfy the requirements of its framework by 2021. The University currently invests in ExxonMobil, Royal Dutch Shell and Chevron – all of which are listed in the top 10 of the Carbon Underground ranking for oil and gas.
The University is also a shareholder in BHP Billiton, Mitsubishi, and Rio Tinto, which all place in the top 20 on the coal ranking.
Instead of promising to diverst from these fossil fuel companies, the University is proposing collaboration.
“Fossil fuel companies will need to redefine their roles and be part of the solution,” the plan reads.
“Investing in climate solutions will have a greater and more positive impact on future generations than simply exiting fossil fuel holdings.”
The University of Melbourne Student Union’s Environment Officers, Elizabeth Nicholson and Kate Denver-Stevenson, disagree with this approach.
“Engagement with fossil fuel companies is unacceptable. Stimulating the industry to undergo the fundamental and urgent changes necessary to mitigate the worst effects of climate change through shareholder engagement is extremely unlikely,” they said.
The University has insisted that divestment is costly and volatile but Denver-Stevenson argues the opposite.
“There’s more of an economic risk to not divest. All of these perceived profits are still in the ground and once you’re not allowed to burn those anymore the carbon bubble will pop,” she explains.
They say that regardless of the commitments laid out in the Sustainability Plan, the University is still sending a pro-fossil fuel message.
“Divestment is about the statement and about the University saying that they will not have anything to do with fossil fuels,” Nicholson said.
It’s a statement which several major Australian universities have already made. In 2014, Monash and ANU made partial divestment commitments, while 2016 saw La Trobe commit to divest from fossil fuels over a five year plan.
Whether the proposed sustainable investment framework leads to divestment from the Carbon Underground 200 remains to be seen.