February 20, 2020

Here’s What People Are Saying in Opposition to Divestment This Week

Despite an uptick in divestment activity at select college campuses this week, new voices have emerged in opposition to this costly empty gesture. Here’s a recap of what folks are saying in opposition to divestment this week.

First we travel across the pond. After students in the UK tore up the front lawn of Trinity College Cambridge in support of divestment and activists in Geneva held sit-ins at oil trading companies to disrupt their operations, Izabella Kaminska, Editor of the Financial Times Alphaville blog, dug into the flawed logic behind these activists’ efforts. In her piece, Kaminska iterates that simply selling assets in oil companies doesn’t solve the issue of climate change—it merely just makes these assets more accessible for other investors:

“In many cases it just makes the asset more affordable to a new group of opportunistically-minded investors, who may be less concerned about the environment than the old lot.”

In many ways, the logic behind the divestment movement is similar to the arguments made by activists hoping to keep the UK in the European Union, Kaminska writes:

“You don’t change the European Union for the better by leaving it. To make real progress, you have to use your voting power and membership to influence the body from the inside.”

If you want to facilitate real change and have your voice heard, you have to put your money where your mouth is, Kaminska argues, alluding to how buying more fossil fuel stock can have more power to change the industry:

“Putting your money where your mouth is is sometimes what really counts. Buying more fossil fuel investments rather than fewer can ironically be more effective. After all, only then can you buy the companies out and put them under new management inclined to favour clean energy over the fossil sort.”

Back in the U.S., a lecturer in economics at Pomona College pushed back on the on-going divestment campaigns across college campuses to state the act of divestment by a university’s administration is merely a political statement. John Jurewitz states in the Associated Press:

“It may be a worthwhile statement if you believe it will help get the ball rolling toward getting some realistic, meaningful policy like a carbon tax or cap and trade, something that will put a price on the carbon in some practical way.”

And let’s not forget the great from a class of 2020 student. From his remarks:

“Divestment would harm Cornell, reduce its influence and, most significantly, do absolutely nothing to fight climate change…If you actually care about the environment, don’t moan and groan about some share of stock that some pool of someone else’s money owns. Plant a tree, donate to a charity, support a serious advocacy campaign or get involved in renewable energy research.  These concrete actions do far more for the environment than demanding that Cornell sell any energy company equity it holds. Even if those calling for divestment prevailed, the only meaningful consequences would be the university missing out on any excess return it could have earned and losing any influence it could have exercised.”

Reporters, professors, students – three different voices all with one common point: divestment is simply a wrong move.