The University of British Columbia campus is pictured in Vancouver, B.C., on Thursday, Aug. 20, 2015.DARRYL DYCK/The Globe and Mail
The University of British Columbia's board of governors has been advised by its finance committee to reject a proposal by faculty and students to divest from the fossil-fuel industry.
The recommendation, released on Wednesday, will go before the full board for a vote on Feb. 15, when members will have to decide whether to listen to the finance committee or side with faculty and students, who voted in favour of divestment in a referendum last year because of concerns about climate change.
Philip Steenkamp, UBC's vice-president of external relations and communications, said in a statement that UBC's board recognizes climate change is an important issue to faculty, staff, students, donors and others, but the finance committee has concluded divesting is not the right course of action.
Universities across North America have been debating the ethics of investing in an industry that contributes so heavily to climate change. UBC has more than $1.4-billion in endowments, of which about $85-million is in investments tied to the fossil-fuel industry.
The finance committee is recommending the board put $10-million into a new sustainable-future fund that would invest in low-carbon enterprises. It did not say what investments would be shifted.
"As a result of a detailed review and third-party analysis, the committee concluded that the [divesting] proposal would not necessarily meet the objectives of addressing climate change or influencing corporate behaviour," Mr. Steenkamp said.
"They also concluded that, at this time, it would not be consistent with the board's fiduciary obligation to endowment donors."
George Hoberg, a professor of forestry, and faculty co-ordinator for the divestment movement, said the committee's decision "was anticipated, but still disillusioning."
He said the reasons for the decision, outlined in a legal memorandum released by the finance committee, were "quite surprising and disappointing."
The brief, by the law firm of Koskie Minsky LLP, states that UBC has a "fiduciary duty" to invest prudently to honour the interests of those who donated to the endowment fund. It also states that if UBC were to divest, other, perhaps less responsible investors, would step in and nothing constructive would happen to combat climate change.
Dr. Hoberg said it would be "unlikely and maybe unprecedented," for the full board to reject the finance committee's recommendations. But he remained hopeful, saying he will try to persuade the board that the finance-committee recommendation is based on a flawed interpretation of fiduciary duty.
"We completely understand they have that legal obligation, but they are interpreting fiduciary duty in such a narrow way, and, I believe, in such a faulty way, that it leads to erroneous decisions," Dr. Hoberg said. "They are interpreting it as meaning 'to serve the interests of the donors,' but that's not what fiduciary duty is. Fiduciary duty – in the case of UBC – is acting in the interests of the university community."
He said he hopes the full board will hear responses to the law firm's brief before making a final decision.
Student Alex Hemingway, co-ordinator of UBCC350, a group campaigning for divestment, also criticized the legal brief.
"The decision of the committee to oppose divestment is extremely disappointing for me, because what we are talking about is the future of my generation on this planet," he said. "The decision is also frustrating, because what we've seen at UBC is two decisive referendum votes from faculty and staff in favour of divestment that the committee has chosen to ignore."
Mr. Hemingway said supporters of divestment will hold a "teach-in" at UBC on Feb. 9 to rally opposition to continued investment in the fossil-fuel industry.
He said both faculty and students will put whatever pressure they can on the board over the next 10 days to vote against the finance committee's recommendation.
"This fight is not over by a long shot," Mr. Hemingway said. "The full board still has an opportunity to do the right thing on divestment … and if the board refuses on Feb. 15, we won't be accepting that, either; we'll be continuing our campaign for divestment until UBC acts."
Mark Hume