We are writing to you as University of Wollongong staff and students who are concerned about climate change, and about investments in fossil fuel companies in particular. As active members of the UOW community, we would be grateful if you would let us know what investments of this kind UOW currently has, and what policy on divestment from such companies UOW has (if any). We would also like the university to:
1. Immediately freeze any new investment in fossil-fuel companies;
2. Divest within five years from direct ownership in and from any managed funds that include fossil-fuel companies
3. Commit to full disclosure of the carbon exposure of its investments and provide regular public reports of its progress towards (1) and (2).

There are two main kinds of reason for such divestment: financial and ethical. From a financial point of view, companies reliant on fossil fuel seem to be at a great risk. Currently, such companies rely on the rate of consumption of fossil fuels remaining the same as it is today; they do not seem to take into account restrictions which are likely to be imposed by the international community. These restrictions are likely because of a recent international agreement of the international community to limit global warming to two degrees above pre-industrial levels. In order to have a ⅔ chance of doing so, cumulative CO2 emissions must be restricted to 1,000 gigatonnes of CO2 from 2011 on. (See IPCC Synthesis Report 5, Table 2.2, page 64 (http://www.ipcc.ch/pdf/assessment-report/ar5/syr/AR5_SYR_FINAL_All_Topics.pdf). Figures refer to 2011). Yet fossil fuel companies currently own reserves that, if burnt, would emit at least 3,670 gigatonnes of CO2. (This is also from Table 2.2 as above. Note that this is the most conservative (lowest) available number; other estimates suggest that known recoverable reserves are twice as high as this figure.) It follows that if the international community does take steps to limit global warming to two degrees, most of the fossil fuel reserves these companies hold cannot be used. They will become ‘stranded assets’. Indeed, given the mismatch between the figures just cited (1,000 versus 3,670 gigatonnes of CO2), most of the fossil fuel reserves these companies hold cannot be used if the international community takes any significant steps to limit climate change at all.

So fossil fuel companies are effectively relying on the assumption that the international community will fail to take significant steps to limit climate change. If this assumption turns out to be mistaken, investors in fossil fuel companies will lose a lot of money. This ‘climate risk’ gives investors strong financial reasons to divest now.

To make matters even worse, many of these companies continue to search for new fossil fuel sources, often at great expense, sources which again can never be used if anything resembling adequate action on climate change is taken.

The second set of reasons is ethical. If UOW invests in these companies, UOW is effectively endorsing their business model, willing that these companies are successful. Since these companies will be successful only if enough fossil fuels are burnt to result in global warming well over two degrees, UOW is effectively willing there to be global warming well over two degrees. This is profoundly wrong, given the serious and potentially catastrophic consequences of such warming.

In addition, the fossil fuel industry is actively seeking to block action on climate change. For example, it funds many sources of misinformation about climate change, misinformation that has played a major role in preventing strong action on climate change. (See Oreskes, Naomi; Conway, Erik M. (2010). Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming. Bloomsbury Press.) Again, if UOW invests in these companies, UOW is effectively endorsing such practices. This too is profoundly wrong.

These ethical reasons apply to all investors but are particularly strong in the case of universities: forward-looking institutions focused on educating people and producing research in order to create a better future. It is deeply incoherent to pursue these ends while also investing in fossil fuel companies whose business model is premised on the use of resources that would undermine those ends.

For all these reasons we call on UOW to (1) immediately freeze any new investment in fossil-fuel companies; (2) divest within five years from direct ownership in and from any managed funds that include fossil-fuel companies; and (3) commit to full disclosure of the carbon exposure of its investments and provide regular public reports of its progress towards (1) and (2).