So much for the “huge win” divestment activist declared just last week in California. During the University of California Regents Committee on Investments meeting on September 16, UC board members took time to reiterate the university’s stance opposing fossil fuel divestment.
As Divestment Facts noted earlier this week, the UC Regents Board has been taking careful steps to distinguish their decision to temporarily sell a handful of direct holdings in coal mining and oil sands development companies for purely economic reasons from the amorphous, politically-driven divestment campaign.
During the meeting at UC Irvine, Regent Bonnie Reiss and other members applauded Chief Investment Officer Jagdeep Bachher for approaching sustainable investment in the most fiscally responsible and impactful way possible, which was not divestment but rather dynamically engaging in the selling and trading of stocks as conditions warrant. Reiss, a vocal advocate of environmental sustainability, made the board and her personal intentions clear:
“It was really the belief of everyone on this committee, myself included, who cares about climate that simply divesting from a list of a couple hundred companies that the students were presenting would absolutely do nothing. So we sell a few shares and stocks in an oil company. It won’t change their behavior in any way. It’s just symbolism without real impact and maybe gets a quick headline like we saw with Stanford.”
While Reiss expressed her support for the UC divestment student activists and their enthusiasm, she was quick to clarify that making a value decision to stop investing in fossil fuel companies might be successful in garnering media attention in the short term, but it would accomplish nothing on the front of climate change. Bachher was even more succinct in his warning to not label the Board’s actions as divestment, but rather a simple decision that he stated was “rooted in economics:”
“The better term is ‘dis-invested’ from our holdings and sold our holdings in these types of coal mining and oil sands companies over the course of the year.”
Growing consensus among investors and researchers has also shown that the divestment strategy is ineffective in achieving the change its proponents hope to see. In fact, a recent study released by Caltech professor Bradford Cornell last week not only shows how ineffective divestment can be in stopping climate change, but how the moral campaign strategy can produce disastrous results for individual school endowments for schools like Harvard, Columbia, MIT, NYU and Yale.