A debate abouT whether universities should divest their investments in fossil fuels is roiling campuses nationwide. Stanford University’s decision last year to divest from coal companies has turned up the heat. The controversy was elevated by student sit-ins at Harvard, accompanied by a supporting letter from well-known alumni, in response to President Drew Gilpin Faust’s decision not to divest.
There are thoughtful arguments against divestment, but they should not prevail.
Divestment opponents maintain it has no effect on a company’s share price, and that the market will immediately absorb any shares that are shed. They claim divestment damages schools’ investment portfolios — and by extension, their primary educational mission — while removing progressive voices from the governance of fossil fuel companies. They also doubt we can, or should, divest from a product that we need to rely on, and wonder where the divestment line should be drawn — there are other businesses and industries that might make the socially-conscious squeamish.
All points worth considering, but the counterarguments are more compelling.
Share price isn’t the main point of divestment. It’s more about building a movement, creating a dialogue, and aligning values with actions.
Besides, some major investors have already said through their actions that divesting doesn’t damage a portfolio’s performance. Notably, the Rockefeller Brothers Fund — heir to a fortune made in fossil fuels — said several months ago that it would be divesting from those resources. The reality is that the investment decisions made after divestment are what really affect an investor’s wealth.
For many people, the most worrisome issue may be that divestment prevents critics of fossil fuel companies from having a voice in those businesses. But are those voices really heard? Anti-fossil fuel proxy votes may as realistic as asking Starbucks to stop selling coffee.
And even if universities need to use fossil fuels — at least for now — should they be making a profit from them?
Fossil fuel companies don’t just provide energy — they also use their clout to push an agenda to protect profits, such as by sponsoring scientists who argue that humans have no effect on the climate.
Harvard should follow the lead of other schools — including Syracuse and the New School — and divest from all fossil fuel holdings. Given Harvard’s standing, that decision would bring enormous attention to the issue.
In an earlier time, the school’s divestment from certain companies doing business in apartheid South Africa did not destroy the regime, but the move contributed to the moral pressure that ultimately led to its demise. In the face of the threat that climate change poses to the viability of life on the planet, Harvard should use its influence.
That alone, however, won’t be enough. Harvard should also match Stanford’s commitment to reducing greenhouse gas emissions. The California school says its new heating and cooling system reduces such emissions by 68 percent. By contrast, Harvard has pledged to cut greenhouse gas emissions by 30 percent by 2016, and admits that it is not on track to reach that goal. Before concluding that it’s too difficult to slash its emissions, given its New England location, Harvard should consider Germany — in cloudy northern Europe — which has more solar power than any other country in the world.
President Faust has said that Harvard has “a special obligation” and “the opportunity to help create the path to a sustainable future.” Harvard does have a special obligation; divestment is one way to discharge it.
Ann Berwick was Massachusetts’ undersecretary for energy and later headed the Department of Public Utilities in the Patrick administration.
• Bill McKibben: Shake Harvard free of oil stock
• David Goodrich and Rajesh Kasturirangan: Alumni can use a new tool to pressure universities to divest
• Opinion: Harvard must divest from fossil fuels
• Drew Faust: Harvard is committed to confronting climate change
Correction: An earlier version of this column misstated whether Swarthmore College divested. The faculty voted to divest, but the school’s board of managers decided not to drop fossil fuel stocks from its endowment fund.