June 30, 2020

Despite $1 Million Price Tag, George Washington University Announces Divestment Plan

On Friday, George Washington University’s Board of Trustees announced, in an unscheduled meeting, that they had voted in favor of halting all future fossil fuel investments and divesting all assets from coal, natural gas and oil extractive companies over the next five years. After years of resisting efforts to divest—the school rejected divestment in 2016—it appears that the administration bowed down to the student activists.

We know that divesting has a price, and the cost will be steep for GW. According to Peter Harrison, GW’s Trustee and chair of the Environmental Task Force, divesting from fossil fuels over the next five years will cost the University $1 million. That is a significant amount of money for a simple change in investment strategy.

In fact, Harrison said the five-year timeframe will enable GW to “avoid major costs” as it divests.  As if $1 million couldn’t cover more than a few scholarships at one of the nation’s most expensive colleges.

In fact, $1 million equals the average spending in R&D from academic institutions in the United States, from baccalaureate, master and doctorate granting institutions, according to the latest data available from the US National Science Board’s Science & Engineering Indicators. Thus, instead of using that $1 million to actively foster and facilitate research projects that address climate change through viable and applicable solutions, GW instead will eat that cost for a couple of headlines and no real tangible impact on the environment.

Also worth noting, only three percent of the University’s endowment is connected to fossil fuel investments as it is. The University has reduced the share of its oil and gas investments by 89 percent over the last five years. Which means the $1 million move will occur after the bulk of the divestment effort has already been made.

Divesting its remaining three percent, or $54 million assets invested in the fossil fuel industry, of its total $1.8 billion endowment (FY2019), will be a pricey cost for an empty gesture that has no impact on the environment.