Columbia University announced it was “divesting” from coal companies in a statement published this week by President Lee Bollinger. Some prominent activists praised the decision, but students on campus were quick to speak out against the move, saying it did not go far enough. Meanwhile, a closer look shows there’s not much substance behind Columbia’s action.
The report itself calls for divestment from coal producers whose primary business is “thermal coal” production. The committee refused to divest from “metallurgic coal,” because in their words, “there are no adequate substitutes in steel production.” The weak announcement also said the University should recommend to third party managers to “avoid” investments in such companies. So the takeaway is that this extremely limited divestment announcement only impacts direct holdings in some coal producers.
Unsurprisingly, the report did not mention the value of Columbia’s thermal coal holdings, nor even confirm their existence. This is a trend we’ve observed in other fake divestment announcements from schools like Barnard, Boston University and the University of Massachusetts, each of which “divested” from coal, but in some cases didn’t even have any holdings to begin with.
The narrow scope of this divestment decision was not an accident. The Advisory Committee on Socially Responsible Investing has actually rejected blanket divestment not once, but twice; first in 2014 and later in 2015.
A main reason why is illustrated in their most recent report, which puts natural gas in the same category as solar and wind when it comes to curbing emissions. The report states, “…there are lower-CO2-emitting substitutes for coal in electricity generation, specifically, natural gas but also, increasingly, solar and wind.” Divesting from the Carbon 200, as was proposed previously, would have considered coal and clean burning natural gas one in the same.
The pointless nature of Columbia’s latest move was on full display when the ACSRI blatantly acknowledged that divestment is not an effective strategy for initiating change. From the report:
“The Committee is aware that divestment from coal producers would be a form of symbolic speech. Other buyers will step in, stock prices will not directly be affected, and coal producers will not stop producing coal.”
We agree. Which makes us wonder, what’s the point in making the announcement in the first place?
If the intention was to appease students and activists, it seems Columbia lost that battle before it even began. Once the details of the recommendation started to emerge, activists were quick to criticize the plan. In a statement, Columbia Divest for Climate Justice said the decision did not go far enough:
“And yet, we cannot support this proposal because coal divestment is not an adequate institutional response to the threat of climate change.”
Though students on campus continue to push for full divestment, the University has consistently resisted. That’s because divesting is expensive and can cost an endowment millions of dollars. Prof. Brad Cornell recently analyzed Columbia’s portfolio and found that if the school were to have divested, they would have lost more than $14 million dollars a year, translating into an 8 percent decrease in the endowment’s value over 50 years. That loss is felt directly by students who can no longer receive financial aid or faculty who miss out on tenure.
For now, it seems Columbia has opted for a limited and “symbolic” move of fake divestment. Their words, not ours.