In a string of recent defeats to activists’ fossil fuel campaign in California, Stanford has become the latest institution in the state to officially reject divestment.
In a University statement issued on Monday, Stanford’s Board of Trustees announced that “Stanford’s endowment will not divest”, following an investigation by the Advisory Panel on Investment Responsibility and Licensing (APIRL) and consideration of the university’s Statement on Investment Responsibility. The groundbreaking decision highlights the university’s decision to engage in practical climate change solutions, programs and research initiatives, instead of opting for an empty gesture politics. The announcement follows CalPERS recent pushback against lawmakers’ calls to further divest the $300 billion pension fund and the University of California’s vocal rejection of divestment as a strategy for addressing climate change.
The Critical Role of Fossil Fuels in the Global Economy
According to its statement, the APIRL rejected divestment largely due to the irreplaceable role fossil fuels play in every aspect of our daily lives. In recognition, the Board of Trustees state,
“…at the present moment oil and gas remain integral components of the global economy, essential to the daily lives of billions of people in both developed and emerging economies.”
Indeed, fossil fuels have not only helped lift millions around the world out of poverty by providing cheap and easy access to energy, but energy companies have also been widely recognized for the critical role they play in reducing the U.S. carbon footprint through innovation, production and research. Stanford echoed this point, noting:
“…some oil and gas companies are themselves working to advance alternative energy sources and develop other solutions to climate change…given how integral oil and gas are to the global economy, the trustees do not believe that a credible case can be made for divesting from the fossil fuel industry…” [emphasis added]
Engagement over Divestment
In addition to acknowledging the practical importance of fossil fuels, the school also highlights its commitment to environmental initiatives that have had a tangible effect on climate change and the university’s carbon footprint. Stanford boasts a greenhouse gas-reducing energy system, an off-campus solar plant and a cutting edge climate research center that addresses a range of environmental and sustainability challenges.
Stanford’s decision demonstrates that it believes that divestment is not an appropriate strategy to addressing climate change, a position re-iterated by a student in a Stanford Review op-ed today:
“…divestment as a political strategy has no economic consequence for companies using fossil fuels, and is a symbolic gesture at best… Following the Board’s decision, FFS can develop a more complete view of the world’s economic and political institutions and evaluate other, perhaps more fruitful, avenues to fight climate change.” [emphasis added]
Additionally, a study by CalTech professor Bradford Cornell has shown that divestment comes at a high cost for university endowments and has negligible influence on fossil fuel companies’ actual behavior. Fortunately, Stanford has avoided a costly but meaningless gesture by rejecting divestment and working towards real climate change solutions. Hopefully Columbia and New York University will follow suite.
Despite end-of-the-year last-ditch student protest activity, the larger picture still remains the same: with Tom Steyer and Bill McKibben’s own alma maters and home states refusing to divest, the future of the fossil fuel divestment campaign looks bleak.