The Advisory Committee on Divestment of Fossil Fuels at Queen’s University asked for submissions concerning if the university should divest its pooled endowment fund and pooled investment fund from companies engaged in fossil fuel extraction and distribution.  I offered the following comments as a concerned Queen’s alumnae (B.Sc., Engineering Physics, 1981 and MBA 1988); a professional engineer with a duty to hold paramount the safety, health, and welfare of the public; and a climate change professional.

Recommendation: Queen’s should divest its investments in companies that participate in the extraction and distribution of fossil fuels for both moral and pragmatic reasons.

There is overwhelming scientific evidence that the burning of fossil fuels is the main contributor to climate change.[1] We know that we cannot continue to burn fossil fuels on the current scale. Even Canada recently agreed to a G7 pledge to phase out fossil fuel use by 2100.[2] To avoid the worst impacts of climate change and ensure global warming does not exceed 2°C, most known fossil fuel reserves must stay in the ground.[3] The fossil fuel industry may acknowledge the reality of human caused climate change, but refuses to change its business models and continues to spend billions developing even more reserves – hence ensuring we will exceed 2 degrees of global warming and threatening the very basis of our civilization. This refusal is clear evidence that the activities of public corporations engaged in fossil fuel extraction and distribution generally constitute “social injury” as defined in Queen’s Statement on Responsible Investing.

The only way fossil fuel companies will change their ways is via regulation and massive moral suasion, including divestment by leading institutions like Queen’s. Queen’s has an opportunity to be a leader on this issue, or it can stick its head in the sand and let others do the hard work required to address climate change – the defining challenge of the 21^st century.

Fossil fuels are not a good investment from at least two perspectives. They are not “good” because the harm they cause (e.g., climate change, air pollution, spills that contaminate land and water, etc.) outweighs the benefits they provide to society. From a purely pragmatic investment perspective, the sector has under-performed relevant benchmarks recently and is at high risk of continuing to under-perform.[4], [5] The world’s leading stock market index company concluded recently that investors who divested from coal, oil and gas earned an average return of 1.2% more a year over the last five years.[6] To fulfill its fiduciary duty as an investment manager, Queen’s should divest.

On the question of divestment vs. engagement, remaining invested and pursuing shareholder engagement activities is the “easy” decision, but it is the wrong decision. It’s wrong because it won’t work. For example:

• Leading environmentalist Jonathon Porritt spent many years engaging with fossil fuel companies such as Shell and BP but eventually concluded that his efforts had been futile.[7]
• There is “little or no evidence” to suggest that engagement could convince fossil fuel companies to significantly reduce global fossil fuel production,[8]
• Shareholder engagement can work to persuade companies make changes like paying their workers a living wage or adopting better recycling practices, but it is unlikely to persuade a company to commit to change its business model or put itself out of business.[9]

The fossil fuel divestment movement is growing faster than any previous divestment campaign. Leading organizations from different sectors of society (e.g., universities, cities, pension funds, foundations, faith organizations) are part of this movement. The fossil fuel divestment movement is diverse, including the Rockefeller Foundation (heirs to the fabled Rockefeller oil fortune) and the Canadian Medical Association. It’s time for Queen’s to join this movement.

As a professional engineer, I believe that climate change goes to the heart of engineering ethics – the duty to hold paramount the safety, health, and welfare of the public. As a professional engineer knowledgeable about climate change, I am obliged to recommend the eventual phase out of fossil fuels; and no further building of long lived infrastructure for development, transport or use of fossil fuels in developed countries. Unless fossil fuel companies are deprived of the moral, legal and financial means of continuing their “business as usual” business models, they will continue to extract fossil fuels that will ultimately be burned and contribute to dangerous climate change.

[1] For example, Intergovernmental Panel on Climate Change (IPCC), Fifth Assessment Report, Climate Change 2013: The Physical Science Basis, https://www.ipcc.ch/report/ar5/wg1/

[2] Kate Connolly, 8 June 2015: G7 leaders agree to phase out fossil fuel use by end of century, http://www.theguardian.com/world/2015/jun/08/g7-leaders-agree-phase-out-fossil-fuel-use-end-of-century

[3] C. McGlade, P. Ekins. The geographical distribution of fossil fuels unused when limiting global warming to 2°C. Nature 517, 187–190 (8 January 2015), doi:10.1038/nature14016

[4] Jeff Rubin, 2015. The Carbon Bubble: What Happens to Us When It Bursts Random House of Canada.

[5] Jeff Rubin, 8 September 2015: U of T should divest from fossil fuels, http://www.thestar.com/opinion/commentary/2015/09/08/u-of-t-should-divest-from-fossil-fuels.html

[6] Patrick Collinson, 10 April 2015: Fossil fuel-free funds outperformed conventional ones, analysis shows, http://www.theguardian.com/environment/2015/apr/10/fossil-fuel-free-funds-out-performed-conventional-ones-analysis-shows

[7] Damian Carrington, 15 January 2015: Engaging with oil companies on climate change is futile, admits leading UK environmentalist, http://www.theguardian.com/environment/2015/jan/15/engaging-with-oil-companies-climate-change-futile-admits-leading-environmentalist

[8] Letter from health professionals: “Do no harm: the Wellcome Trust should not profit from the fossil fuel industry”, http://www.theguardian.com/environment/2015/jun/25/do-no-harm-wellcome-trust-should-not-profit-from-fossil-fuel-industry

[9] Emma Howard, 23 June 2015: A Beginner’s Guide to Fossil Fuel Divestment A comprehensive guide to the basics of divestment: what it means, why the urgency and how it impacts climate change, http://www.theguardian.com/environment/2015/jun/23/a-beginners-guide-to-fossil-fuel-divestment