In 2018, the ‘Divestment Movement’ dwindled into the ‘Divestment Suggestion’ as a number of academic institutions rejected activist calls demanding divestment. Once again, after conducting their own independent research and assessing the situation for themselves, many institutions found that divestment isn’t actionable at all and is instead an empty, symbolic gesture – a sentiment echoed by universities, pensions and organizations alike.
Choosing to resist activist pressure and focus on solutions, institutions like Harvard University and Swarthmore College have instead detailed their sustainability efforts outside of divestment. Gonzaga University has also doubled down on new investment opportunities. These universities are looking for their own ways to support the environment, something divestment fails to achieve. Taking divestment off the table, institutions around the country have outlined their approach to pragmatic, sustainable solutions.
Here’s a look at this semester in review:
This week, Gonzaga University made news by rejecting divestment, opting instead to create an additional investment of “$10 million into companies researching how to reduce carbon emissions and combat climate change.”
The decision highlights the growing trend of universities opting for tangible investment opportunities over costly divestment and protecting the university’s endowment from unnecessary risks. According to Associate Vice President for Finance Joe Smith in November 2016, the endowment, while smaller than many of its peer colleges, has been praised for its growth in recent years and is key to the school’s “ability to provide an exemplary educational experience at tuition rates below many of our regional peers, now and into the future.”
This year, despite numerous rejections, calls for divestment continue at Harvard University once again. The Undergraduate Council, mobilized by Harvard Divestment, inspired a ‘fossil fuel referendum’ to gauge student opinion on the issue. Despite this effort, Harvard chose not to wait for the results and made the University’s stance clear:
“While we agree on the urgency of this global challenge, we respectfully disagree with divestment activists on the means by which a university should confront it,” she wrote. “Harvard is fully committed to leadership in this area through research, education, community engagement, dramatically reducing its own carbon footprint, and using our campus as a test bed for piloting and proving solutions.”
University spokesperson Melodie Jackson makes clear that the University has chosen to pursue more active forms of engagement to combat climate concerns. Rather than endorsing what would effectively be an empty gesture to silence student concerns, the University is far more interested in pursuing sustainability efforts as an institution that engage student participation and encourage actual change. Visiting the school’s microsite will reveal student-led projects and leadership efforts that focus on quantifiable results instead of self-satisfying symbols. Given student investment in real sustainable solutions, it’s no surprise that less than one percent of the Harvard community signed the subsequent petition for divestment.
Massachusetts-based Brandeis University has spent the last few years assessing divestment and proactive investment opportunities. With pressure mounting from a set of Brandeis faculty in support of divestment this year, University leadership released a statement conceding to a limited, partial divestment strategy that looks to remove investments from “public or private companies or partnerships whose principal business is the mining of coal for use in energy generation” and in fossil fuel private limited partnerships for the next three years.
Despite the limited divestment movement, the university also took an opportunity to highlight its tangible effort to support sustainability on campus. According to the announcement:
“The board affirms its support of the university’s commitment to achieving the goal of a 15 percent reduction in emissions by 2020, as recommended in the 2016 Climate Action Plan. Since 2015, we have already been able to reduce our emissions by 12.6 percent. As I have recommended, I will convene a new task force in the next academic year to establish additional goals for further reductions in emissions beyond the 2020 target, plus other ways in which the institution can reduce its carbon footprint. We must acknowledge that achieving these additional goals will require changes in our collective and personal behaviors. At least in part, these goals will be aided by our improvement of the campus infrastructure in the medium to long term through improvements with an eye toward energy efficiency and conservation.”
Clearly, the school made some concessions to appease students and faculty who wanted full-scale divestment, but at least Brandeis leadership also knows what real solutions look like. While divestment may appease activists, sustainability commitments provide a real solution.
Despite being the birthplace of the college divestment movement, Swarthmore has almost annually rejected divestment. In June 2018, prompted by a new student referendum, the school once again reiterated its anti-divestment stance and confirmed its $2 billion endowment would not bar fossil fuels. The following is the school’s official statement, as reported in Chief Investment Officer:
“Any policy change that shifts the focus from attaining the best long-term financial results would then require fundamental changes in both the asset allocation and the investment managers who serve the College, and would place that performance at risk,” said Salem Shuchman, chair of the Swarthmore’s board of managers, in a letter to students and faculty. “As with other policies of the board, it may be revisited from time to time, but there is no current plan to do so.”
Swarthmore has a longstanding investment policy that commits managers to “yield the best long-term financial results, rather than to pursue other social objectives,” first adopted in 1991. To Swarthmore, divestment is a baseless gesture that risks those financial results – and it’s done it bad faith, at that.
According to their board:
“Divestment’s potential success as a moral response is limited-if not completely negated-so long as its advocates continue to turn on the lights, drive cars, and purchase manufactured goods, for it is these activities that constitute the true drivers of fossil fuel companies’ economic viability-their profits.”
For three years, the Cambridge Zero Carbon Society at Cambridge University prolonged a futile campaign to pressure the school into divestment. Time and time again, the school rejected this effort – once with a statement offering a more productive solution in 2016:
“Indeed, a tokenistic approach may be counterproductive, as there is no guarantee that a desired outcome could be achieved merely by selling a particular share or other investment. Instead, the University intends where possible to pursue a constructive process of engagement and, given the Office’s intermediated investment model, reliance will be placed on working with its selected investment managers.”
Two years later, the school resisted the misguided policy again when a draft of the University’s own “Divestment Working Group” was leaked. Uproar ensued as Cambridge’s Zero Carbon Society protested despite the memo simply reiterating the university’s policy of avoiding investments in oil sands as well as a commitment to operate with greater transparency and to allocate 10% of the endowment fund to what it considers environmental, social, and governance (ESG) funds. There was nothing new in this document – but the false outrage continued nonetheless.
Ultimately, it was all for naught. In June of this year, Cambridge University officially rejected fossil fuel divestment because the investment yields were necessary to fund the very academic prestige that students, including student protestors, attended Cambridge for. According to the announcement,
“The financial sustainability of the University depends on strong returns from its investment strategies and the ability to benchmark these strategies against other investors. The CUEF has significantly outperformed its market benchmarks over the 10 years of its existence and so has significantly enhanced the University’s ability to pursue its mission. Those returns are a critical component of the financial resources that underpin research and education activities across the University, including the provision of some financial support for students and the enhancement of education and research facilities.”
Divestment is expensive, ineffective and unnecessary. Based on these principles alone, Cambridge University’s denouncement of the policy was imminent because divestment has always been expensive, ineffective and unnecessary. This is nothing new.
University of Massachusetts
The University of Massachusetts (UMass) is a pillar of irony when it comes to divestment. Two years ago, UMass held itself up as “the first major public university to divest its endowment of fossil fuels.” Their announcement was a self-congratulatory pat on the back and the media joined in lauding their decision. But two years later, their own Political Economy Research Institute (PERI) released a report concluding that divestment is all but useless.
This shouldn’t come as a surprise either, but the simple fact that the divestment campaign has not moved the needle in reducing CO2 emissions or reducing the consumption of fossil fuels globally is frequently lost on the environmental activists pushing for it. From the report:
“The basic question we ask here is simple: how effective are campaigns to force various entities to sell their fossil fuel stock holdings likely to be in driving down CO2 emissions? Our answer is also straightforward. We conclude that divestment campaigns, considered on their own, have not been especially effective as a means of significantly reducing CO2 emissions, and they are not likely to become more effective over time. We reach this conclusion on the basis of what we believe is the most careful examination to date of the evidence on global fossil fuel divestment activity. Our examination includes both an analysis of the available descriptive data on global divestment patterns as well as an econometric modeling exercise that evaluates the impact of divestment events on the stock market prices of fossil fuel companies.”
PERI’s economic report concludes what UMass failed to do two years prior – divestment has no impact on the environment and is virtue-signaling at best.
This semester of disappointments for the divestment effort comes after a similarly unsuccessful Spring of 2018, during which Grinnell College, Middlebury College, and New York University strongly rejected divestment, all citing the financial risk and the pragmatic futility. More and more universities are refusing to adopt a policy that is not in line with their fiduciary or environmental duties, instead focusing on real solutions for their campus. The issue that divestment protestors have here isn’t that they believe their universities don’t care about the environment – clearly, they do. 2018 is proof of that, as almost every divestment rejection came with an affirmed commitment to actionable climate policies.
The problem for divestment protestors is simply that schools are rejecting their radical ideas as ineffective, in favor of pragmatic action and balance. Student-led research projects, emissions-reduction commitments, sustainability programs – these are tangible solutions and there’s evidence to prove it. These academic institutions are proving that actionable climate solutions do not require the complete and total isolation of fossil fuels – and this is a truth that the divestment movement is in denial of.
As their movement dwindles, the truth about divestment will become even more impossible to deny.