Fossil fuel divestment: What’s next?

The University has announced it plans to divest from fossil fuels and it’s undoubtedly a good thing that the University reviews what it should and shouldn’t be investing in and a great thing that it has decided not to invest in fossil fuels. However, I would like to look at what the next step is in terms of both cleaning up university investments and tackling fossil fuels on the campus.

Firstly, fossil fuels on campus. The university doesn’t just invest in fossil fuels, it also uses them. I believe we could all benefit from having a look at the figures for the fossil fuel usage. The University spends £4.3M per annum on Electricity and £1.9M on Gas according the first source below. It also details that the University gets 50% of its electricity from renewable sources. According to the Scottish governments report on energy generation from 2010 of the total energy generated 29.5% is from Coal, 16.8% is from Gas and 30.6% is from Nuclear, with the remaining 19.1% coming from renewables.

Assuming this 19.1% is included in the University’s figure of 50% renewables, the remaining 50% must come from the other sources. Of this 50%, 19.89% will likely come from Nuclear, 10.923% from Gas and 19.1807% from Coal, making the fossil fuels figure 30.1037%. Meaning that each year the University spends £1.295M on Fossil Fuels for its electricity, as well as £1.9M on Gas.

The divestment climbdown is from £18M of investment to £0 over 10 years, however the university will spend £31.95M on fossil fuels in that time. We also have to remember that paying money for something is far more beneficial to a company than investing it; unless the company is issuing stocks for money-raising or the investment makes a significant change to the share price (keeping the shareholders happy) whoever holds the stock in a company is of little interest to the company itself. However, we should never underestimate the value of bad PR and the effects of the divestment will be far more than monetary.

A question we could be asking ourselves is how much difference will this make to the fossil fuel industry? The University’s fossil fuel assets totalled £18M, spread across a multitude of companies. Let’s say for the sake of argument that they are all in British Petroleum. BP has total equity at time of writing of $130.407 billion, so the University’s investment is 0.0000997% of this equity. If all of the universities in the UK (109 of them) had similar holdings in BP and chose to divest it would be 0.01087%. If all the universities in the world (22,123) had similar holdings and decided to divest it would be 2.20539% This is all very rough work, but can give you an idea of how much more important this action is symbolically for it’s potential knock on effects at other universities and indeed other bodies around the world. This kind of action must be repeated innumerable times before it will make a dent, but it is always good to take that first step.

This leaves me with the conclusion that the divestment is a good idea and sets a great example, but it would be better for the university to also put another 25% of the University’s electricity generation to renewables or to cut its usage by around 40% (which is far less feasible) which would have an impact on fossil fuel, but where it really hurts; the university’s electricity bill. Perhaps this is what the student body should call for next. Part of the savings the University makes on electricity go towards an investment in green energy, so far the fund has invested £2.5M in green energy.

Secondly, cleaning up university investments. I would hope that this instance has empowered students to take greater interest in who the university is investing in and try to effect further change. Having a quick scroll down their current investments sheet shows they have investments in Bayer (former Slave Labour users), Nestle (see Nestle Boycott), tax dodgers Vodafone, weapons manufacturers BAE Systems and betting shops Ladbrokes and William Hill. There are many varied ethical concerns here beyond fossil fuels, which I am sure students will want to address.

Congratulations to the SRC and GUCA on all their hard work getting this proposal through the University Court, the university and hopefully (should other university’s take up the torch) the world will be better off for it. This article isn’t meant to be a disparagement of this achievement but a call to continue to fight for a more eco-friendly university. Vive la révolution verte!