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January 4, 2018

Divestment in 2018: What Does the New Year Hold?

Nearing the end of a dismal 2017, divestment activists made a last-ditch attempt to change the narrative—promoting a number of empty gestures as “victories” and portraying the divestment movement as growing in momentum.  The scoreboard, however, shows us otherwise.

In reality, 2017 was another year of letdowns for divestment—with new rejections emerging from colleges across the country (such as Mount Holyoke College, Denver University, Washington University, University of Wisconsin-Madison, Kenyon College, and Muhlenberg College to name a few) and only one full divestment pledge from tiny Northland College.  Below is a look at what did – and did not – happen over the past year and what we can expect in 2018.

1) Blue States Reject Divestment

The Divestment movement has been most active in blue states, but that activity has been met with resistance.  From coast to coast, state pensions have rejected divestment proposals by politicians and activists.

New York

New York Governor Andrew Cuomo got some headlines when he proposed divesting the State Pension Fund of fossil fuel stocks.  But shortly after, the Suffolk County Association of Municipal Employees (AME) released a new study that raised serious concerns about such divestment proposals, finding that it would cost the fund $2.8 billion over 20 years.  The report analyzed the portfolio and found that the fund’s energy investments have outperformed other sectors and were responsible for strong returns in 2016.

Luckily for New Yorkers, State Comptroller Tom DiNapoli is the official in charge of the pension’s investment decisions.  He has consistently rejected calls to divest citing his fiduciary duty.  DiNapoli responded to the governor’s call last week by reiterating that the fund had no plans to divest.


Vermont became a battleground state for the issue of divestment after then-Governor Peter Shumlin (D) called for state pension funds to sell off fossil fuel assets in his 2016 State of the State address.  Instead of letting politics dictate such a decision, Democratic Treasurer Beth Pearce and the Treasury Department began a long and comprehensive process that spanned more than a year to analyze the potential benefits or negative impacts of divesting.

As a part of this careful consideration, the Vermont Pension Investment Committee commissioned a non-partisan economic report to understand the financial impact divestment would have on public funds. The study unsurprisingly found what we have known all along: divestment would increases costs, reduce diversification, fail to impact targeted companies, and introduce a “slippery slope of potential for other restrictions” on future investments. Ultimately, the study found that divestment was not in the best interest of retirees.  From the report: “Divestment conflicts with VPIC governing policies: Given the financial and governance costs that come with fossil fuel divestment, in PCA’s opinion, divestment of fossil fuels, thermal coal, or Exxon has not been shown to be in the best interests of VPIC pension beneficiaries, and conflicts with VPIC governance structure.”

The VPIC report ultimately recommended against divestment and the issue was not taken up in the subsequent state legislative session.


This past summer, the Seattle City Employees’ Retirement System voted to reject divestment because they found it to “conflict with the Board’s fiduciary duties and the SCERS ESG Policy.”


In April of this year, the California Public Employees’ Retirement System (CalPERS) unanimously voted to drastically curtail its divestment policy, stating CalPERS “generally prohibits divesting in response to Divestment Initiatives” due to its cost and ineffectiveness in achieving social goals. California State Controller Betty Yee reiterated the decision, stating “We are fiduciaries of this fund.  And our sole focus is and must continue to be how we are going to pay the benefits to our public sector workers and our educators who have earned these benefits during their work life.”

CalPERS recently announced that divestment from other sectors has cost the fund $8.5 billion.

2) Divestment Groups Are Shutting Down Across Campuses

Swarthmore is the birthplace of the divestment movement, marking the first campus to push its endowment to sell off its fossil fuel funds.  So, given the year the movement has had, it’s fitting that the divestment group on campus announced it was shutting down operations after the school rejected divestment for the third time in as many years. The Board found in February that divestment would cost the school $200 million over ten years.  Now, Fossil Free Swarthmore is disbanded and has rebranded itself as the Sunrise Movement, a group that launched earlier this year and has a mission that expands beyond the scope of fossil fuel divestment in an effort to casts a wider net with a broader focus related to climate change.

In April of this year Bowdoin College’s student-led group Bowdoin Climate Action (BCA) announced its decision to end its campus divestment campaign. BCA co-leader Isabella McCann noted that the group would turn its attention toward broader “climate justice” initiatives at the state and local government levels.  Bowdoin officials still denounced the effort and said Bowdoin would not divest its endowment. Just one month before BCA’s announcement, College President Clayton Rose deemed fossil fuel divestment as “merely symbolic.”

Similar action took hold at the University of Colorado Boulder. Fossil Free CU has been one of the most active student divestment groups on one of the most environmentally conscious campuses in the country.  Yet, this year the group announced it was ceasing operations in a Facebook post.  The closure comes after a five-year campaign that proved unsuccessful in convincing the state-wide elected Board of Regents to divest from fossil fuels.  In 2015, the CU Board of Regents voted against divestment in a 7-2 vote, a tally which included “no” votes from two Democrats.

3) Colleges Continue to Reject Divestment

In January 2017, the University of Denver (DU) officially rejected fossil fuel divestment despite heavy involvement in the campaign by 350.org.

According to the DU Board of Trustees:

“Regarding divestment, the Board adopted the task force recommendation that divestment in fossil fuel companies, or any other industry, would not be an effective means of mitigating global warming nor would it be consistent with the endowment’s long-term purpose to provide enduring benefit to present and future students, faculty, staff and other stakeholders. Rather, the University of Denver’s greatest ability to mitigate climate change and foster a sustainable future lies in deploying its core competencies: education, research and the ability to foster informed community discourse and in accelerating its sustainability in its operations.” (emphasis added)

In April, Mount Holyoke’s Board of Trustees voted unanimously to reject fossil fuel divestment. The Board cited its fiduciary responsibilities and the need to protect the school’s endowment.  According to a statement from the board:

“Given the College’s limited financial exposure to fossil fuels, divestment would sacrifice the strength and stability of our endowment without, we believe, having the desired impact on the fossil fuel industry. The move also would likely reduce the investment returns on the endowment and therefore distributions to the College. Putting our endowment at risk means putting our mission at risk. Nearly 80 percent of our students receive direct scholarship assistance, and this is made possible by our endowment.”

And Kenyon College rejected fossil fuel divestment in late April stating divestment is not an effective way to impact the environment, and found divesting would limit the number of people who can attend the College and that fact is not worth the few, if any, benefits divestment would bring.

NYU again rejected divestment this year. The original decision was announced in 2016, but the issue made its rounds on campus again in 2017. As originally stated, NYU “was ‘not persuaded’ by the argument that ‘divestment in and of itself can help to advance the use of renewable energy sources and reduce dependency on fossil fuels.’”

4) Fake Victories

Faced with a string of high profile rejections, activists were forced to promote decisions that could at best be described as empty gestures as “victories” for the movement.


Norway’s $1 trillion sovereign wealth fund announced the possibility of selling oil and natural gas holdings.  As usual, activists like 350.org’s Bill McKibben over-exaggerated the news to prematurely claim it as a victory for the divestment movement.  However, as the fund has stated itself, the unwinding of fossil fuel investments is not related to divesting for symbolic reasons, but rather to diversify its holdings. This is because oil-rich Norway’s economy is already closely linked with the industry. Hardly the divestment “win” it’s been made out to be.

World Bank

Bill McKibben was also quick to herald an announcement from the World Bank that it would “no longer finance upstream oil and gas after 2019.”  But apparently he didn’t read the fine print that clarified, “In exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.”  Even if they did go ahead with this pledge without exception, it would impact about 0.129 percent of the $434 billion spent globally on upstream oil and gas investments in 2016.

Johns Hopkins’ divestment pledge among the weakest we’ve seen  

On December 12, Johns Hopkins University (JHU) announced its “divesting” from thermal coal, but with so many caveats included in the decision, one must wonder if the school will actually end up doing any divesting at all. The endowment will not immediately sell their investments, even though JHU’s president says the industry, “poses a unique threat to public health and to the environment,” but will instead unload these stocks “on a schedule that minimizes financial loss.” And JHU will not be divesting from the Carbon 200.

Catholic institutions make headlines but little changes to investments.

Forty Catholic institutions globally announced in October that they would no longer invest in fossil fuel companies and would instead shift toward green energy. As a caveat, several of the institutions that made the pledge do not have any fossil fuel holdings from which to divest, but said they would avoid future investments.  The announcement is also counter to the church’s values. As a recent column in the Billings Gazette states, “If the Catholic Church actually does divest from fossil fuels, the church itself, and its charities that serve the poor, will have a lot less money to fulfill that mandate. It makes no sense.”


Bottom Line: Will 2018 mark the end of the divestment movement?  The campaign has resigned itself to celebrating symbolic moves that have no substance, while the number of actual rejections keeps growing.  If the shuttering of divestment groups on campuses like Swarthmore and CU Boulder are any indication, 2018 will not be a good year for the movement.