There was a fury of divestment activity on the NYU campus this past week, but at the end of the day, the school’s policy remains the same. First, students began occupying the administrative elevator in the Elmer Holmes Bobst Library on Friday to protest the school’s investments in fossil fuels. But students then called off the protest after university officials informed the them that they had already met one of their demands by selling direct investments in two independent oil and natural gas companies.
Of course, students, and activist Bill McKibben were quick to declare a victory for their movement. But the university administration made clear that this was not a case of divestment, and that the endowment still has investments remaining in the two companies via comingled funds. It simply so happened that the endowment had sold its direct holdings in the two stocks sometime in the past two years. University spokesman John Beckman explained what transpired in a statement.
“The endowment’s specific investments are continuously subject to change based on best judgment about NYU’s investing objectives. The investments NYU currently has in Anadarko and Noble are strictly indirect investments made by fund managers or as part of an index fund. In neither case does NYU directly select the stocks that are in the funds.” (emphasis added)
He then reaffirmed NYU’s divestment rejection from 2016 as standing university policy, writing:
“In 2015–16, the Board considered the issue of fossil fuel divestment deliberately, carefully, and respectfully; its review of the subject included several meetings of senior university officials and Board members with NYU Divest, and the review of extensive materials prepared by NYU Divest. In the end, the Board’s decision to not divest from fossil fuels and its reasons were made clear in a public and transparent way. We appreciate that NYU Divest wished — and still wishes — for a different outcome. However, there has been no material change to the facts, so there are no plans for the Board to revisit the decision the Board made public in June 2016.” (emphasis added)
It’s hard to even call this move fake divestment, since the university characterized the selling of these specific stocks as nothing more than a re calibration of the portfolio and not a grand political gesture.
NYU has mostly likely remained resolute in its anti-divestment policy due to the immense costs associated with completely ridding a portfolio of fossil fuel holdings. In fact, Professor Bradford Cornell of Caltech calculated that NYU would lose more than $4 million a year if it were to divest, amounting to a six percent loss over 50 years. These losses mean fewer resources for students and faculty, and according to a separate study by Arizona State University’s Prof. Hendrik Bessembinder, could mean bigger class sizes, less money for scholarships or increases in tuition.
No doubt, this isn’t the last protest we’ll see from NYU Divest. But for the sake of NYU’s endowment and the students that rely on its funds, let’s hope the administration stays firm against divestment.