Board will turn to an ESG lens, cuts carbon gas emissions of endowment by 10 per cent
Members of the student activist group Fossil Free Guelph (FFG) are disappointed by U of G Board of Governors’ decision to reject their proposal and accept the recommendations.
“I think our initial reaction was disappointing. It’s not the answer we wanted. We feel that this is an urgent climate crisis, we don’t have a lot of time and so we were really hoping the board would see that perspective and see why divestment is necessary,” Megan Peres told The Ontarion; Peres is an active member of Fossil Free Guelph and one of the students who spoke to the Board of Governors during the meeting.
The decision comes at the heels of a United Nations report by the Intergovernmental Panel on Climate Change (IPCC) noting that urgent action is needed to keep temperatures at the 1.5 degrees Celsius that was pledged at the Paris Agreement.
The meeting held last Wednesday, Jan. 23 saw approval of recommendations that set a target of 10 per cent reduction of carbon gas emissions within the University’s endowment in the next two years, as well as creating an Environmental, Social, and Governance (ESG) lens for future and current investments.
The ESG lens will give companies a quantifiable metric score that will decide how responsible investment is depending on if the company is environmentally and/or socially responsible.
The finance committee, a shoot-off branch of the board, will oversee the ESG investments. Currently, none of the members have ESG experience, although the Morgan Stanley Index, a third party index that ranks companies based on ESG, was purchased to give the endowment an ESG score.
When asked if an ESG expert would be hired full time, Don O’Leary (vice president of finance, administration & risk), said that the Board needs to first discuss and define what is important to U of G’s investments going forward.
“At some point in time, and I know the students asked for this, and we will have a conversation because we need to define what is important to us in terms of ESG,” said O’Leary. “The young lady [Megan Peres] mentioned social injury […] Is that more important than the environment? Is that less important than governance, we need to have that conversation.”
Social injury was a point stressed by FFG as a motivator for divestments. In the meeting, there were concerns over investments in companies involved in the forceful removal of Indigenous protestors on unceded Wet’suwet’en land. Other social injury concerns are more general in terms of climate change’s impact on marginalized and impoverished communities due to heat waves, displacement, and water accessibility issues.
“Given ESG factors take a lot of things into consideration, but a lot of the emphasis from the university seems to be reducing our carbon emissions. When we talk about divestment it’s a huge climate change issue, but it’s also an economic issue, a human rights issue,” Aidan Brushett, a first-year member of FFG, said in an interview with The Ontarion. “There are so many Indigenous communities being trampled over by fossil fuel companies, and that’s something that’s important that can’t be reconciled by engaging with these companies.”
“Divestment is not a silver-bullet solution, but it does make a strong statement,” said Peres. “The recommendations are good, but it’s not enough.”
Photos courtesy of Aidan Brushett/ Fossil Free Guelph