Victoria University to review its investments in carbon-emitting fossil fuels

This opinion piece by Victoria University’s Vice-Chancellor Professor Grant Guilford was published in The Dominion Post on Thursday 6 November.

Aerial view of Kelburn and Wellington Harbour

Victoria University of Wellington has signalled its intention to join a growing international movement to move out of investment in carbon-emitting fossil fuels.

The University’s charitable trust, which manages the funds raised on behalf of the University, has never held significant investments in the fossil fuel industry but, reflecting the University’s objectives, is now moving to confirm this investment exclusion.

In taking this step, Victoria joins a number of international universities, including ANU, Stanford and Glasgow, in withdrawing from investment in fossil fuels or from coal. Other examples of international leadership in this area include initiatives by the United Nations Principles for Responsible Investment, the British Medical Association, and a variety of investment funds, city councils and religious groups.

Some may argue that it is hypocritical to stop investing in fossil fuel companies when, like many other organisations, Victoria remains reliant on their products. However, a prerequisite for hypocrisy is choice and while Victoria is making good progress in reducing its carbon footprint, for now we have little choice but to continue using fossil fuels.

Conversely, we do have a choice over whether or not we invest in the fossil fuel industry. We believe it is critically important for a high quality research-based organisation like ours to align its investment decisions with the results of its scientific research. Accordingly, this decision is a natural step for a university like Victoria with a leadership role in geosciences and climate change research and policy. Recent research, for example, from our Antarctic Research Centre agrees with studies carried out by the international scientific community which collectively strongly suggest that climate change and ocean acidification will severely impact life on land and in our oceans unless the world reduces its reliance on fossil fuels.

Just last week, our researchers warned that the Southern Ocean's sea ice belt—which is comprised of frozen ocean water and which grows as a protective fringe around Antarctica's ice sheets—is susceptible to ocean warming as greenhouse gases continue to rise. This could lead to global sea levels rising several metres in coming centuries.

Our staff were also involved in the development of the State of the Climate in 2013 report, which showed the world has continued to warm with some Southern Hemisphere countries, including New Zealand, having one of their warmest years on record. One of the authors, Dr James Renwick warns: “Climate change does not mean a few extra nice days in summer—we are talking about a significant alteration in the climate”. 

Other factors taken into account were the business continuity risks from sea level rises to Victoria’s low-lying Pipitea Campus, and the investment risks from ‘stranded assets’ in the fossil fuels sector. The latter risk arises from the scientific evidence that we cannot burn all the fossil fuel reserves on the planet yet still expect to live on it—leading to warnings from financial leaders, like the Governor of the Bank of England, to be wary of ‘unburnable’ fossil fuel reserves on company balance sheets.

This action is not intended to vilify responsible companies in the sector. We will continue to provide impartial advice and support to this industry as it works to develop alternative energy sources to accelerate an orderly transition to a sustainable future.

While decisions such as this can strain valued relationships, it is very important that universities stand by their research, that they take every opportunity to stimulate and inform debate and that they remain unwavering in their commitment to sustainability.