Open letter to Stellenbosch University management, marking the start of the Global Divestment Mobilisation

Fossil Free Stellenbosch is an activist group on campus at Stellenbosch University. We campaign around climate change and its impacts on multiple fronts: human health; human rights; economic performance; poverty; conflict; ecosystems and biodiversity .It has been a year and a half since we first made contact with the administration, asking them to divest their R6 billion endowment from fossil fuels. In the interim, we have followed an SRC process upon their direction, and are tentatively hopeful since the administration contacted us requesting a meeting to discuss the topic a week ago. In anticipation of this meeting, we are sending them the letter below, as advanced thanks and encouragement.

This day also marks the start of the 2017 Global Divestment Mobilisation –
https://globaldivestmentmobilisation.org/ . Starting today, the Global Divestment Mobilisation will manifest as a global wave of events lasting ten days, across 39 countries on six continents, challenging and disrupting the power of the fossil fuel industry. You can follow Fossil Free Stellenbosch’s planned activities in the upcoming events section at https://www.facebook.com/fossilfreestellenbosch/ . Like our page to be kept up to date with the administration’s decision. Lastly, should you agree that the university should divest, sign our online petition at: https://campaigns.gofossilfree.org/p/STBdivest , and please share widely with your networks.

Letter to the Rector’s Management Team:

Dear Professor De Villiers, Professor Van Huysteen, Professor Du Plessis, Professor Cloete, Professor Schoonwinkel, Professor Koopman, Professor Klopper, Dr Slamat, Ms Overmeyer,
Mr Lombard.

Thank you for receiving our letter. We write to you today to express our gratitude for calling a
meeting with a representative of Fossil Free Stellenbosch to discuss the issue of fossil fuel
divestment. As you know, there aren’t many spheres that the burgeoning crisis of climate change
doesn’t affect: human health; economic performance; poverty; conflict, migration and human rights;
the biodiversity crisis and the ecosystem services underpinning livelihoods. We send this email at the
start of a week-long global peaceful mobilisation from the 5th to the 13th of May, intended to
highlight the destructive effect of the fossil fuel industry, complicit as it is in the climate crisis, and
promote the climate solutions offered by fossil fuel divestment. For this reason, we are openly
publishing this letter online. Divestment, as you are aware, entails getting rid of stocks, bonds, or
investment funds that are unethical or morally ambiguous, and is ideally accompanied by
reinvestment in constructive and non-harmful investment choices such as renewable energy.

We are hopeful that you have called the meeting to inform us that divestment is a viable policy for
you to commit to, or consider committing to. Divestment is a strategy which has seen exponential
success within the last few years. Institutional withdrawal of support to the fossil fuel industry, while
not immediately affecting its bottom line, chips away at its social license to operate. When we first
contacted the administration, requesting them to meet to discuss divestment, the divestment
movement globally had seen 430 institutions divest $2.6 trillion. A mere year and a half later, this
figure stands at $5.45 trillion, divested by 718 institutions.

If your decision is to divest, we are quite sure that market forces have played a role to some extent
to sway your decision. Renewable energy is reaching price parity and becoming competitive, even with relatively small or non-existent subsidies, and investments in the sector are booming. Conversely, climate change costs the global economy – by 2012 researchers had estimated this figure at $1.2 trillion, or 1.6% of global annual GDP. Both the costs of adapting to and mitigating climate change become more expensive for every year of inaction. Factoring in massive fossil fuel subsidies (due to be wound down) and social, ecological and future externalities, fossil fuels are not the inevitable choice to power either the global or the South African economy. Meanwhile, renewable energy such as solar and wind represent lower costs, more jobs, cleaner air and the chief means to slow climate change, to contain the planet within non-catastrophic bounds.

The rising investment opportunities presented by renewables aside, there is a strong financial case
to be made for divestment based on the growing risk of stranded assets. Fossil fuel companies risk
wasting up to $2.2 trillion in the next decade, threatening substantially lower investor returns, by
pursuing infrastructure projects that become uneconomic when faced with international action
limiting temperature rise, coupled with breakneck advancement in renewables technology.
South Africa ranks third globally for amount of coal production per capita – this makes us vulnerable
to its outperformance by countries utilising more competitive energy sources. Indeed, we are
witnessing strong signs of coal’s ‘structural decline’ globally – the number of new coal-fired power
plants is slowing dramatically, and coal production is plummeting. It has long been predicted that
coal will be the first form of fossil fuel to tank, and it is coming faster than anyone expected. Will
South Africa have a contingency plan, to remain competitive in a global market?

Since our initial meeting with Professor Cloete, as representative of the Rector’s Management Team,
we managed to convince the SRC that divestment was a worthwhile cause to rally behind. We asked
you initially, as we ask you still, that you commit to divestment from fossil fuel companies, which
means to immediately freeze any new investments in fossil fuel companies, and divest from direct
ownership and any commingled funds that include fossil fuel public equities and corporate bonds
within three years. A definition of fossil fuel companies entails the six South African primary or
secondary stock exchange-listed fossil fuel companies that feature in the top 200 companies
globally, as ranked by the carbon content of their proven fossil fuel reserves. This is a common ask of
the hundreds of divestment movements globally. These six remain in place today – Anglo-American,
BHP Billiton, Glencore Xstrata, Sasol, Exxaro and African Rainbow Minerals. Shockingly, the first four
of these companies feature in the top 15 in the coal sector – the dirtiest of fossil fuels. This is a
primary reason why we need strong climate leadership from our institutions, that the shift from our
highly coal-dependent economy may begin in earnest.

There is not a moment to lose. A new report by The Potsdam Institute on Climate Impact Research,
Carbon Tracker and Yale University suggests that unless the current global emission level of 39
gigatonnes of CO2 per year begins to ambitiously decline by 2020, any chance of keeping global
warming within 1.5’C and 2’C agreed at Paris, will be “all but unachievable”. Needless to say, the
Sustainable Development Goals will be wishful thinking under a scenario of breached limits.

By December 31st 2015 your investment endowment stood close to R6 billion. You direct the profits
from this investment into the running of the university, and it is your mandate to make certain that a
profit is generated. A proportion of this investment is constituted by fossil fuel companies, which has
been standard investment practice to date, to ensure a mixed basket of eggs. The proof, however, is
in the pudding: over $5 trillion would not have been divested so far, should it have been financially
dubious.

By climate-proofing your students futures, you serve your first duty – to prepare us for a prosperous
and safe future. Should you decide on a policy of divestment, we applaud you for embracing the
expanded definition of being future-focused in your mandate.

In addition, by being the first university on the continent to commit to divestment, you seize a
unique opportunity to position this institution as both morally upstanding and intellectually
progressive (the latter by accepting the requirements as laid down by science). As climate change
establishes in the public arena as an increasingly urgent focus, the university possesses the title of
Africa’s first to divest, a platform from which to offer up climate solutions for society. It is no
exaggeration to say that to support fossil fuels now means to support current and future climate
genocide. While it is not genocide in the conventional sense of the word, with the scientific
understanding we have there can be no refuting its equivalence, a point spectators are increasingly
noting. We would be so proud to be students and alumni of a university on the forefront of
sweeping change, that acts as a shining example to other institutional investors in South Africa and
more broadly. Indeed, it would be a close race, with UCT already having established an ethical
investment task team to consider divestment from fossil fuels and a number of other ethical
questions.

This country has benefited from a previous divestment campaign, that to end apartheid. We stand to
benefit once again, to learn from our past mistakes, and to do the right thing this time around. There
are those who resisted then, as there will be those that resist now – with all manner of arguments
prevailing except that for compassion and humanity. Forward-thinking, moral leadership is
desperately required, and we trust you to make the courageous choice – one we look forward to
reporting to the rest of our student body and the world.

Sincerely,
Fossil Free Stellenbosch

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