Ben Gurion University to pull oil and coal investments

Ben-Gurion University of the Negev is the first academic institution in Israel to commit to pulling its investments from oil and coal because of their impact on the climate crisis. The university has also committed to managing its investments using investment tools in accordance with ESG (environment, society, and governance) principles, while increasing investments in renewable energy.

The university’s executive committee took this decision after a careful review of its investment portfolio, totaling NIS 3 billion, over a period of a year and a half, responding to increasing demands by scientists who insist that academic institutions should act in a way that reflects the recent findings on the climate crisis.

The university is now mapping all its investments to verify how much it will cost to redirect investments. First, investments will be diverted from companies that focus on producing oil and coal. At a later stage, gas investments will also be examined.

“At this point, we have directed the investment committee to come up with a detailed plan indicating how and within what period of time, using substantial milestones, we can change our investment mix,” says Yarom Ariav, chair of BGU’s Executive Committee and past director-general of the Ministry of Finance.

“Within approximately three years, we will see a substantial change in our investment portfolio. We will stop investing in fossil fuels and will manage investments according to the ESG policy. Our first step will be to refrain from investing in oil and coal companies, and we will gradually proceed to diverting gas investments as well. As an economist, who is concerned with the future of this planet, I think this is the right way to go. Research shows that profits have not been impacted at companies that have adopted ESG policies. It’s an economic and a moral statement. Climate change affects us daily, without us realizing it. We must take action as part of good economic policy,” Ariav said.

Other universities still haven’t taken the plunge

So far, other Israeli universities, which receive donations from fossil fuel industries and polluting companies, are refusing to adhere to demands of students and senior researchers to re-examine their investment policies in this area. At the same time, over the past two years, universities around the world have begun to commit to change their investment mix in accordance with growing climate dangers. For example, Harvard University (the richest university in the world) has announced that it will no longer invest in fossil fuels, since “climate change is the most substantial danger that humanity faces today.” Oxford, Brown, Cornell, and other universities have followed suit.

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In Israel, Ben-Gurion University created the School for Sustainability and Climate Change in March 2021. Researchers at the school will focus on desertification, energy, and sustainability, examining climate change in a desert context, while collaborating with researchers around the world.

As a follow-up step, BGU President Daniel Chamovitz says that the BGU decision on investments perfectly reflects BGU’s principles. “It’s not enough to establish a school for sustainability and climate change”, he says. “If you take a decision, you have to stand behind it on every level. Ben-Gurion said that we must act with determination and courage, and this is what we’re doing. Facing climate change is a challenge that impacts us all. We must pave the path to change. You can’t just say ‘It’s impossible!’ If our own researchers examine how climate change affects public health and how systems on the planet are changing because of human activity, we’ve got to take action accordingly.”

BGU’s change in investment policy will result in the diversion of millions of shekels, following an initiative presented by BGU President and faculty members of the “Green Campus” climate team. “Investment committees are very conservative by nature”, says Prof. Chamovitz, “At first, people were skeptical. But we showed them what’s happening in the world. We showed them that there is no contradiction between profit and changing investment policy. You have to say to yourself, for every amount we lose, money isn’t everything. Money is a means, not a goal. Yoram Ariav spoke to the investment committee members, and we brought in investment experts and examined the situation carefully. We know that the fossil fuel era won’t be over tomorrow, but we have to stick to our principles.”

Failure to meet climate goals

Scientists of the UN’s Intergovernmental Panel on Climate Change (IPCC) warned in a report that came out last week that as opposed to politicians’ statements throughout the world, humanity is failing to deal with greenhouse gas emissions. For the planet to warm only 1.5 degrees – a temperature considered safe for humanity, greenhouse gas emissions must decrease by half by the end of the decade and reach zero by the end of the century. However, on the basis of present commitments, gas emissions are expected to rise by 14% by the end of the decade and the temperature will spike by 3.2 degrees to an extremely dangerous threshold by the end of the century.

Members of BGU’s Green Campus initiative lauded the decision of the executive committee. Dr. Avner Gross, head of the climate team and member of the School for Sustainability and Climate Change says that “even if we completely stop using fossil fuels in the coming decades, the planet temperate will still rise by three degrees. This will be a catastrophic warming that humans have never experienced since first starting to live on the planet. To prevent catastrophic warming, by the end of the decade 88% of our energy consumption on this planet must come from non-fossil sources: coal usage must be cut by 95%, oil by 60% and gas by 45% by 2050. Therefore, diverting investments from fossil fuels and investing funds in climate solutions are extremely important steps toward solving the climate crisis.”

Dr. Nir Barak of the Department of Politics and Government, who researches environmental politics in cities, says that so far, politicians have not upheld their commitments, and therefore universities and organizations that manage investments play a significant role in this effort. “For too many years, we have seen how helpless countries are in promoting effective mitigation and adaptation policies for climate change”, he says. “In my research, I’m discovering that cities around the world are taking initiative and creating alternative paths of action. More cities are diverting investments from fuels: New York, Paris, London, Berlin, Copenhagen, Rio de Janeiro, Cape Town, and others. Cities and universities can’t replace countries, but these types of organizations can indicate the type of change that is required.”

The “Clean Money” forum called upon BGU to add clear goals to their diversion of gas investments. Gas is comprised of methane, a greenhouse gas that is 84 times more powerful than carbon dioxide, responsible for over one third of global warming. The Forum congratulated BGU on their decision to divert investments from fossil fuels and lead this agenda in Israel. However, they were disappointed that the university chose to separate gas from other fossil fuels: “We call upon the university to accept the challenge and join the 178 leading universities in the world and divert investments from all carbon, oil, etc.”

Published by Globes, Israel business news – en.globes.co.il – on April 11, 2022.

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