McGill University's board of governors rejected on Wednesday a petition to rid its $1.3-billion endowment fund of fossil-fuel investments – another Canadian setback for the divestment movement that has gained some traction in the United States and Europe.

In an attempted compromise, the board endorsed a plan put forward by a subcommittee to set up a separate "socially responsible investment fund" for donors who want to avoid coal, oil or natural gas companies, and directed its fund managers to be more aggressive in looking for opportunities to invest in renewable energy and clean-technology firms.

"In the view of the committee, the action against climate change that can be taken by McGill will be much more effective if McGill does the things McGill does best – research [and] putting very smart minds to work on finding alternate sources of energy," board president Stuart Cobbett said in an interview. "We thought that was a much better route to take than to divest."

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Several Canadian universities, including the University of British Columbia, Concordia University, Dalhousie University and the University of Calgary, have already rejected the divestment option despite pressure from an international movement.

University of Toronto president Meric Gertler is expected to respond shortly to a committee report that recommended partial divestment of its $5.9-billion fund. The committee said U of T should sell investments in fossil-fuel companies that "blatantly disregard" the threat of climate change and it pointed to coal producers and oil companies such as Exxon Mobil Corp. and ConocoPhillips Co.

The divestment movement was launched by international environmental group 350.org, and has had some success in the United States and Europe, particularly among church groups, foundations, postsecondary institutions and even some U.S. state treasuries. More than 500 institutions representing more than $3.4-trillion (U.S.) in assets have made some form of divestment commitment, 350.org says.

The Rockefeller Family Fund announced its plan to divest from coal and companies last year and signalled Wednesday that it will move as quickly as possible. It will "eliminate holdings" of Exxon, saying the oil company associated with the family fortune has misled the public about climate-change risks. Though the endowment has a modest $130-million (U.S.) in total assets, the move is notable because a century ago John D. Rockefeller Sr. made his fortune running Standard Oil, a precursor to Exxon.

The McGill board of governors concluded that there is no evidence that divestment would have any real-world impact, and said the endowment fund should not engage in symbolic political actions. In the past, however, the university did divest from tobacco companies, from Myanmar and from South Africa over apartheid.

In its report to the full board, the social-responsibility committee concluded that fossil fuels remain a critical source of energy for much of the world, and argued that there is currently no viable replacement.

"If McGill and other universities were to divest our holdings at this moment, it is likely these assets would find other willing buyers with little or no economic effect on the companies," it said. "At the same time, divestment would reduce or remove the influence we may be able to exert on fossil-fuel companies by remaining invested."

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Divest McGill organizer Chloé Laflamme criticized the board's decision, saying fossil-fuel producers are clearly contributing to the climate crisis. "By remaining invested in these companies, it's not a neutral statement," Ms. Laflamme said. "By investing in these companies, you are investing in the climate crisis and you are complicit in the status quo."

With a report from Reuters