Keith Srakocic/AP Photo
Students and activists take positions in the Cathedral of Learning at the University of Pittsburgh to urge the school’s board of trustees to divest from fossil fuels, February 21, 2020, in Pittsburgh.
In early February, the University of Southern California (USC) joined a growing number of colleges and universities divesting their holdings in oil, coal, and gas companies. The decision marks one of the latest developments in the student-led divestment movement that has forced institutions of higher learning to give up climate-damaging investments and to be more transparent about those pledges. USC and the University of Illinois committed to full divestment, as did the nine-campus University of California system, which holds over $126 billion in investments.
Not all schools completely cut these ties. There are at least 58 universities across the country that have committed to some form of divestment, from full divestment to more targeted strategies that allow some ties to remain in place. In January, Columbia updated its investment criteria to lay out a limited approach. It’s these decisions that can obscure the complex investment portfolio choices that raise more questions about how far colleges are willing to go to sever ties with these companies.
Divestment lowers investor confidence, drives away dollars, and stigmatizes the industry. Bill McKibben, founder of the climate action group 350.org, told the Prospect that the divestment movement has shaken the sector to its core, drastically altering public perceptions of the industry and limiting access to capital. “We’re north of $15 trillion in endowments and portfolios divested around the world, including the most famous colleges on earth (Oxford and Cambridge) and the biggest (the UC system),” says McKibben. “I was tickled when Shell called [divestment] a material risk to its business, because their business is a material risk to the earth.”
Divestment lowers investor confidence, drives away dollars, and stigmatizes the fossil fuel industry.
Schools have invested in the fossil fuel sector for decades, providing firms with the capital to continue oil and gas production, to persuade members of Congress to provide industry-specific tax breaks and other favors, and to thwart carbon taxes and new public-transportation projects and other policies—actions that ultimately delay the transition from the greenhouse gas–emitting fuels. About 100 fossil fuel companies, including ExxonMobil, Shell, BP, and Chevron, account for 71 percent of all greenhouse gas emissions. The world’s 50 largest oil companies continue to increase oil and gas production, even though they must drastically cut output to meet global climate targets.
At Columbia, students have been calling for full divestment for over eight years, making proposals to the school’s Advisory Committee on Socially Responsible Investing, conducting sit-ins, hunger strikes, and one of the country’s largest ongoing tuition strikes. The school shed direct investments in publicly traded oil and gas companies. But Columbia also pledged not to make new investments in private funds that primarily invest in oil and gas companies. Columbia also says it “may make an exception to its non-investment policy when a credible plan exists” for an oil or gas company to transition to net-zero emissions by 2050. However, the school did not specify what constitutes a “credible plan.”
“These companies have systematically misinformed the public to make money at the expense of climate, contributing to the suffering and death of millions of people,” says Savannah Pearson, a recent Columbia graduate who participated in the hunger strike. She worries that the university has carved out some “wiggle room” if these firms make progress toward net-zero goals. “Columbia should not be open to further collaboration with them,” she says. “There are plenty of more ethical companies to invest in.”
“There are indirect investments through funds that the university does not control and doesn’t really know at any given time where the investments are—these are managed by external managers in funds that may have very large numbers of investors,” says Michael Gerrard, a professor of environmental and energy law at Columbia Law.
Georgetown University committed to limited divestment in early 2020, but last August, the student newspaper, The Georgetown Voice, reported that its Securities and Exchange Commission (SEC) disclosure forms revealed the school had previously undisclosed investments in three controversial oil and gas companies, and the most recent SEC report published earlier this month shows the university has yet to divest from these holdings.
A university spokesperson said in a statement that the school “divest[ed] from some fossil fuel companies,” intended to make no new investments in them (or any other fossil fuel firms), and would dispose of the few fossil fuel investments it had left in a “prudent manner.” (To Gerrard’s point about external investment management, Georgetown also cut its ties to an outside manager who favored natural-resource companies.) But the spokesperson did not specify why the university was still invested in the controversial firms.
Oil and gas companies fund many academic programs, including disciplines related to the fossil fuel economy.
Meanwhile, Harvard University continues to resist student pressure. The school commands a nearly $41 billion endowment, the country’s largest for a single institution. Beginning in 2012, a student-led divestment movement sprang to life with campus blockades, student-led lawsuits, and protests. In November 2019, organizers from Fossil Fuel Divest Harvard, Yale’s Endowment Justice Coalition, and Fossil Free Yale joined with athletes and cheerleaders to storm the field before Harvard and Yale’s annual football matchup, college sports’ second-oldest rivalry and a huge draw for students, alumni, and college football fans. Hundreds of spectators soon joined them, delaying the game for nearly an hour. Ilana Cohen, a Harvard junior and Divest Harvard organizer, said the protest reflected students’ interest in “endowment justice,” which demands that universities forgo investments not only in fossil fuels but other sectors, such as the prison industrial complex, that foster social injustice.
Five months after the Harvard-Yale game, university officials rejected divestment. “[D]ivestment paints with too broad a brush,” Harvard President Lawrence Bacow said in a statement, and Harvard “cannot risk alienating and demonizing possible partners, some of which have committed to transitioning to carbon neutrality and to funding research on alternative fuels and on strategies to decarbonize the economy.” Bacow also announced a plan for Harvard campuses to achieve net-zero greenhouse gas emissions by 2050. Cohen, the Harvard student organizer, called the university’s moves “radically insufficient.”
Harvard is not alone in its concerns about jeopardizing outreach to “possible partners.” Oil and gas companies also fund many academic programs, including disciplines related to the fossil fuel economy. Harvard’s Structural Geology and Earth Resources Program’s sponsors include Aramco, Chevron, ExxonMobil, and Shell; and Columbia’s new Center on Global Energy Policy relies on funding from those four companies, alongside BP and ConocoPhillips—which means that students and alumni will have to continue to pressure their schools to reconsider these sponsorships and comb through pledges for inconsistencies, to speed up a green transition. Says Pearson, the Columbia graduate, “To not divest is to bet against all of this change that has to happen, which is what scares me so much about Harvard and other institutions staying wrapped up in the industry.”
