Students from the group Fossil Free Melbourne University (FFMU) gathered at the Swanston Street entrance of the University on Thursday morning, displaying a banner stating that “The race to divest is on – UniMelb is losing”, then taping it to the Administration Building. The action came in the wake of the University of Sydney announcing on Monday that it would cut the carbon footprint of its investment portfolio by 20% over the next three years. Also encouraging the campaigners is Australian National University’s decision to withdraw $16 million from mining stocks in October last year. FFMU hope the University will follow suit in what will become a domino effect of increasingly larger financial institutions divesting from fossil fuels and building a cleaner economy.
Despite these two successes in the National Campus Divestment Campaign, Vice Chancellor Glyn Davis has shown few signs that he will yield to the students’ demands. In September last year, FFMU held a referendum on whether or not the University should divest from fossil fuels. 1,876 students and staff participated and voted 97% in favour of divestment. While the FFMU, in a demonstration of good faith, organised for there to be three seats reserved at the event – Vice Chancellor Glyn Davis, Chancellor Elizabeth Alexander and Financial Officer Alan Tait – throughout the unveiling of the results and environmentalists cheering their landslide victory, the three seats remained empty.
Glyn Davis expressed his opposition to the University divesting from the fossil fuel industry in an opinion piece that was published in The Australian in March last year. Davis claimed that it would be financially risky to “exclude certain types of investment, such as all companies working in any area with direct or indirect interests in fossil fuels” because it could mean “higher management costs, and likely lower returns.” He added that this could lead to “higher costs to future students.”
In addition to this, he claimed that the University is still taking part in the movement to end carbon emissions in other ways. He stressed that “sustainability and resilience are among the three grand challenges shaping the University’s research agenda”, and that “on one estimate over 1,300 researchers and around $218 million annually is involved in research across energy, water, carbon management and related domains at Melbourne.”
FFMU have responded to Davis’s assertion that the University has a progressive, pro-environment research agenda with the comment that “the silliest thing of all is the University of Melbourne is…producing world-leading research on climate change and having sustainability as a component of every degree” while still ”investing in fossil fuels.”
On the issue of divestment being financially risky, FFMU rebuts that being dependent on shares in fossil fuel companies poses much more serious financial risks. The group claims that there is a rising tide of reasons the value of these shares could drop in the near future.
Firstly, as the damage caused by climate change – heat waves, extended bushfire seasons, hurricanes – become more frequent, financial institutions will be less keen to invest in coal and other areas of the unsustainable energy sector. Furthermore, the renewable energy market is likely to expand and eventually be competitive enough to drive down the value of fossil fuels. Another reason the value of shares in fossil fuels could sink is a drop in the demand for Australia’s coal. China, our biggest importer, has taken steps towards greening up its economy and is set to introduce their own National Carbon Trading Scheme that will put financial incentives on investment in clean energy in 2016. FFMU argue that when these risks of investing in fossil fuels are taken into account, it’s clear that divestment isn’t as financially risky as Davis implies.
Ben Caldecott, the Director of the Stranded Assets Programme at Oxford University, believes that divestment it is a strategy that has the potential to achieve its aims. He points out how activists in the 1980s succeeded in lobbying organisations to divest from South African companies, which eventually brought down Apartheid. He also notes that this process begun with small groups of ethical investors divesting, then spread to universities and eventually large superannuation funds and reorganised market norms. On fossilfreemu.org, the group highlights that two countries, 31 local governments, 49 religious institutions and 14 universities and colleges have already divested from fossil fuels. The group is confident that even if Davis isn’t prepared to bow down just yet, on a global scale the divestment campaign is gathering momentum extremely fast.