Is the University of Toronto going for gold in greenwashing?
Earlier this year, Canada’s consumer watchdog sent a letter to MPs calling out “bogus” environmental claims. Lawmakers were asked to approve new amendments to the Competition Act that explicitly target companies making environmental benefit claims that are “not based on adequate and proper substantiation in accordance with internationally recognized methodology.”
Bill C-59, which took effect earlier this year on June 20, focuses on commercial organizations, but we suspect the greenwashing practices it outlaws are pursued by other corporations, too. Take, for example, the University of Toronto.
In 2021, six years after the UofT chapter of the renewable advocacy group 350.org petitioned the administration to stop investing in the fossil fuel industry, university president Meric Gertler announced that UTAM (the University Asset Management Corporation) would “divest from all direct investments in fossil fuel companies” within twelve months.
Given that UofT no longer had sole responsibility for its pension plan, the president was promising to fully divest the university’s endowment portfolio (worth about $7 billion, and growing). The administration celebrated this commitment as “one important tool among many in the fight to counter climate change.”
But has U of T really followed through on this promise? Or has its investment team engaged in deceptive greenwashing practices to boost its climate action profile?
To begin with, we might ask if UofT actually had any direct investments in the fossil fuel industry when the President announced divestment in October 2021? Bill C-59 calls for organizations to provide “adequate and proper substantiation” for its environmental claims, but UofT has never provided any details about the direct fossil fuel investments from which it purportedly divested.
In addition, it’s important to remember that what the president announced in October 2021 was immediate divestment from any direct holdings of fossil fuel stocks. But 92 per cent of UTAM’s investments are indirect, and purging that lion-sized portion, the president explained, might take until 2030. In the meantime, UofT continues to benefit from investments that provide capital support and social licence to the fossil fuel industry.
In fact, UofT now invests more, in real absolute dollar terms, in the fossil fuel industry than it did when so-called divestment was announced almost four years ago. This might seem hard to believe, but let’s run the numbers.
In its most recent annual investment report, UofT’s investment corporation, UTAM, explains that a smaller percentage of its endowment investments now goes toward supporting the fossil fuel industry (from 2.0 per cent of net asset value on Dec. 31, 2021, to 1.4 per cent on December 31, 2023). But over that same period, UTAM’s total net asset value has risen from $7.2 billion to $8.2 billion (see UTAM 2022 report pages 5-6). Thus, while the value of UTAM’s indirect investments in the fossil fuel industry has fallen by 0.6 per cent of net asset value, UTAM’s total net asset value has simultaneously risen by about 14 per cent during that same period.
You don’t need to be a UofT professor to do the math: UTAM’s indirect investments in the fossil fuel industry have gone from two per cent of $7.2 billion in 2021 (i.e. $144 million) to 1.4 per cent of $8.2 billion by the end of 2022 (i.e. $164 million). The value of UofT’s indirect fossil fuel investments amounted to $144 million in 2021 and $164 million two years later — an increase of $20 million in indirect fossil fuel investments.
Evidently, the UofT’s celebrated fossil fuel "divestment" was an empty gift. Further, the deception succeeded in having a debilitating effect on climate organizing at the university, since so many students, faculty and staff have been seriously misled by the administration's claims concerning divestment.
The university administration did achieve something in October 2021, but it was an achievement in deception. A demonstrable dollar-value increase in investments in fossil fuels by UTAM has been sold to the university community and the public as a relative decrease in fossil fuel investment.
This deception has all the hallmarks of the previously discredited "net zero" marketing campaigns that UofT and other corporations have used to mask their continuously increasing CO2 emissions. If greenwashing was an Olympic event, there would be plenty of Canadian organizations vying to “own the podium.” And the University of Toronto’s asset management corporation would be right up there among the medal contenders.
Paul Downes is a professor in the Department of English at the University of Toronto and an elected member of the university’s Academic Board.
Paul Hamel is a professor in the Department of Laboratory Medicine & Pathobiology in the Faculty of Medicine at the University of Toronto.
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