July 24, 2020

Even Its Most Ardent Supporters Admit, Divestment A “Symbolic” Gesture

Over the course of the years-long campaign, supporters of the divestment movement have changed their story several times about why it’s the preferable policy. From stigmatization of the industry, to siphoning capital from fossil fuel companies, to producing higher returns, it seems proponents put forward different reasoning depending on audience or whims of the stock market. But some of the movement’s most high-profile supporters are now saying the quiet part out loud: divestment is a symbolic move whose sole purpose is to generate headlines.

Since the rise of the movement, the fossil fuel divestment campaign has ricocheted from the college campus to Wall Street to pension boardrooms and back. Climate activists have become the ideological driving force behind the sweeping pressure to promote “sustainable investing” by imposing the responsibility to prevent and address global warming on corporations, Universities, asset managers, and more – under the guise of fiduciary duty, financial transparency and risk management.

Contrast that with comments made recently by Stephen Heintz, President of the Rockefeller Brothers Fund, who took part in a panel hosted by Divest Princeton recently.  For all the talk around increased student pressure on campuses, financial reports arguing that divestment is financially beneficial, and grand statements about $14 trillion of assets being divested—all efforts of which, by the way, are paid for by the Rockefeller Brothers Fund—Heintz admitted that the groups initial announcement back in 2014 was all pomp and circumstance.

“I really think that was the value of what we did.  It had really very little to do with the size of our financial assets and withdrawing them from the fossil fuel industry.  It was really about the symbolism of marrying the Rockefeller name with a statement that we can no longer be associated with fossil fuels. And I have to say, we really know it was a symbolic act but it really exceeded our expectations when all of a sudden the next day we had front page stories in newspapers all around the world.”

Back in 2014, the Rockefeller Brothers Fund worth $860 million in assets at the time, announced that it would divest roughly 7% of its funds from fossil fuels. Since changing its investment strategy, the Fund has pivoted to investing in sustainable technology, maintaining less than 1% of their holdings in fossil fuel presently. Five years later, Heintz doubles-down on the moral crusade, saying –

“Yes, but don’t underestimate the value of symbols to motivate people, inspire change and tell a story that can be very compelling.”

We’ve seen the same theme emerge recently with the U.S. Conference of Mayors.  Last month, the network adopted a rushed pro-divestment, not-binding resolution, put forward by a coalition led by New York City Mayor Bill de Blasio. The overall process was pretty ad hoc, and mayors didn’t even discuss the financial and political implications that the divestment implies.

Jonathan Mitchell, New Bedford Mayor and Chair of the Energy Committee, though willing to approve the resolution, essentially called the resolution toothless.

“I’m willing to support this as a symbolic gesture to support real, what I think would be a real boost to our efforts to combat climate change.  It does not bind cities in any way, the language is pretty clear that the conference strongly urges cities to think about divesting, to explore divesting… so it’s not binding in that way. And so to that sense it’s—not that it would be as a resolution anyway—but the language is fairly soft.”

Why go through so much trouble to vote and pass a “soft” and “not binding” resolution? For the same reason others divest. Divestment is not about actually solving climate change, which requires tangible action and sacrifice. Its goal is to “influence change” – to virtue signal, wag a finger at others, and demand they do something symbolic and politically in line with the times.

Activists know this just as well as those who bow to pressure from them – in fact, they’ve always admitted it.