Fossil fuel divestment campaigns shift public opinion, empower young organizers, and generate sociopolitical willpower for climate action.
Study after study has made one simple fact clear: the business plan of the fossil fuel industry is incompatible with a safe, stable climate. If we burn all of the proven reserves of fossil fuels, we would likely put ourselves on a path to more than 5°C of temperature rise by 2100. Yet this industry keeps looking for more carbon to burn – and institutions across the world, from college and university endowments to city and state pension funds, keep investing in it.
Every day that these institutions stay invested in fossil fuels, they lend their implicit support to an industry that has a vested interest in delaying the systemic changes our society must make to avert global warming. Any action taken to address climate change would result in a direct reduction in the profitability of this industry. In the absence of laws restricting such activity, the fossil fuel industryblocks climate action by buying politicians and spreading doubt about the scientific reality of climate change.
Political will, rather than technology, is now the bottleneck to mitigating climate change, and loosening the grip of the fossil fuel industry on our democracy is a prerequisite to effective political action on climate. Divestment strikes at the very root of this issue, removing the social license that the fossil fuel industry depends upon to operate.
Regardless of the success of divestment, the divestment campaign itself also shifts behavior by engaging young leaders in a social movement with international scope. “Greening” our lifestyles, while helpful, is no longer sufficient to stop global warming. Only by fundamentally shifting the sociopolitical landscape can we create the conditions necessary for the techno-economic overhaul of our global society that is necessary to avert catastrophic climate change. College and university divestment campaigns put the tools of social movements in the hands of our youth, priming the next generation to lead the way to a more just and stable future.
Category of the action
Changing public perceptions on climate change
What actions do you propose?
We propose that institutions across the world:
Immediately freeze new investments in fossil fuel companies, and
Divest within five years from direct holdings in these companies and from any commingled funds that include fossil fuel public equities and corporate bonds
The power of divestment to tackle climate change stems not only from the act of divestment itself, but also from the movement calling for divestment. The act of divestment serves to stigmatize the fossil fuel industry, thereby diminishing its political influence and lowering the hurdles to the passage of meaningful climate legislation. Yet even before divestment itself has occurred, the divestment movement can shift behavior by promoting climate consciousness and actions at personal and institutional levels. Critically, it can also inspire a generation of leaders, who boldly demand and actively participate in the formulation of effective climate policies. We propose that student-led college and university divestment campaigns can play a particularly important role. To understand the effectiveness of divestment, it is helpful to consider the reasons for divestment, summed up by the acronym, S.I.M.P.L.E.
To have at least a 66% chance of preventing “dangerous climate change” by “hold[ing] the increase in global temperature below 2 degrees Celsius” - as mandated by the Copenhagen Accord agreed to by 141 nations - more than 65% of proven global fossil fuel reserves cannot be burned prior to 2100. Yet fossil fuel companies today spend around $700 billion a year developing more reserves. No fossil fuel company, which we define here as one of the top 200 publicly-traded gas, oil, and coal companies ranked by estimated carbon reserves, has committed to stopping fossil fuel exploration and limiting fossil fuel extraction to its proportional share of the carbon budget.
The fossil fuel industry’s business model is fundamentally incompatible with the science of climate change mitigation. This incompatibility presents a particularly striking contradiction to universities that simultaneously invest in the fossil fuel industry while pioneering climate science and renewable energy technologies.
At the same time, some fossil fuel companies and their beneficiaries have a proven track record of promoting and orchestrating anti-science disinformation campaigns designed to spread public doubt about the scientific consensus on global warming, oftentimes engaging in personal attacks on individual scientists. The fossil fuel industry additionally spends hundreds of millions of dollars per year on political lobbying and donations in opposition to emissions-limiting climate legislation; an order of magnitude more than those advocating alternative energy sources.
By financing these activities, universities are undermining the integrity of science and, in turn, their very raison d’être: truth and knowledge.
The burning of fossil fuels by industrial society is the major cause of currently observed and predicted climate change, leading to sea level rise, increased frequency and severity of droughts and flooding, increased severity of hurricanes and wildfires, decreased agricultural output, and other deleterious effects on human society. Climate change also disproportionately affects people from developing nations, economically disadvantaged communities, and future generations, who bear the least historical responsibility for its cause.
Instead of providing a moral check on the pursuit of self-interest, universities investing in the fossil fuel industry are instead lending it their social licence and their moral prestige.
The political power of the act of fossil fuel divestment arises from the stigmatization of the fossil fuel industry’s business practices, which contradict the above values of Science, Integrity, and Morality cherished by electorates, academics, and leaders of business and government alike.
With a proven theory of change, divestment therefore seeks not to financially bankrupt the fossil fuel industry, but to politically bankrupt it. By stigmatizing the industry’s scientifically untenable, morally unconscionable and integrity-challenging pursuits, divestment can help to shift the sociopolitical landscape, diminishing the industry’s political influence and thereby creating political breathing room for meaningful climate leadership and legislation.
This political influence can be further diminished through restrictive legislation compelled by divestment; for example, through a roll-back in governmental fossil fuel subsidies, currently amounting to around $1 trillion per year worldwide trillion per year worldwide. Indeed, a study of the fossil fuel divestment campaign conducted at Oxford University concluded that “in almost every divestment campaign we reviewed...divestment campaigns were successful in lobbying for restrictive legislation affecting stigmatised firms.”
These impacts of divestment can be so effective because political and societal will - and not a lack of technological capability or effective policy tools - are now the bottlenecks to mitigating climate change, as is widely recognised in the scientific literature.
Divestment can be particularly potent when applied to university endowments because, as thought leaders and moral leaders in today’s society, universities wield a megaphone to public opinion and an immense capacity to effect political change.
Yet even before divestment has been achieved, the divestment movement can begin to shift public behavior. Stigmatization of fossil fuel companies ignites the moral courage of the public, inspiring an impassioned electorate to call for an end to business-as-usual leadership and for the start of a climate action revolution. This is particularly the case amongst young people, for whom divestment is an accessible tool that can help to galvanize a sense of generational mission.
Enthusiasm for climate change leadership and the high-profile nature of the divestment campaign (featured exhaustively in the international media) can help to raise the level of debate, the urgency of public discourse and the effectiveness of ongoing climate actions. A few examples of progress along the way towards divestment include:
Pitzer College’s divestment campaign not only prompted the university’s divestment from fossil fuels, but the development of a four-point “comprehensive and ambitious climate-action plan”, which included a commitment to meet new emissions reductions targets and the creation of a sustainability fund to ensure environmentally responsible investments.
“Divestment” has twice been endorsed by President Obama as an avenue for climate leadership, suggesting that the divestment campaign has the potential to influence politics at the highest levels.
Ongoing negotiations between MIT’s climate action group, Fossil Free MIT, and the Institute’s leadership has been met by MIT President Reif’s announcement of a “campus-wide conversation on how to tackle climate change” that will “provide recommendations for action”.
Today, the single largest age group in America is 22 years old: the “antidote to cynicism” that President Obama has implored to rise to the climate challenge. To date, the scientific literacy and widespread acceptance of man-made climate change in most university communities have not yet translated into leadership and action. But the seeds are there for both. University-based fossil fuel divestment movements have the potential to light a fire beneath so many young, well-informed and capable citizens.
As discussed below, divestment protects the long-term security of a university’s endowment from a looming carbon bubble, predicted by many of the world’s financial experts.
The Path to Divestment
As we have seen, there are few constituencies whose fundamental values more strongly conflict with the business practices of the fossil fuel industry than universities. Yet energized and unleashed, their student members hold the key to reshaping the climate change debate. We propose that a university-based fossil fuel divestment movement can play an especially crucial role in shifting public perceptions towards climate action.
The cohesive and vibrant atmosphere of academic and scientific communities provide nourishing environments for social movements to grow. We propose actions that could be taken as part of a strategy to build the university divestment movement, based on a ‘Why? How? What?’ communication formula. We provide examples based on Fossil Free MIT’s experiences, which can be extended and tailored to other academic communities.
In order for a divestment movement’s actions to resonate with a community and to overcome social inertia, the actions must have a clear “why”; underlying motivations should be consistent with the community’s values and be brought close to home in space and time. Examples include:
Fossil Free MIT’s Blue Line demonstration: Four miles of custom-printed blue caution tape wrapped buildings throughout the MIT campus, indicating the flood height of a Hurricane-Sandy-strength storm surge in 2050, exacerbated by global warming-induced sea level rise. This provided a visceral visualization of the devastation that the climate crisis threatens, and taps into our value of safety for ourselves, loved ones and community. MIT President Rafael Reif noted that by “marking the ‘Blue Line’ of future flood levels that could stem from global warming, Fossil Free MIT…[is] making the long-term, projected risks of climate change feel tangible and present.”
Public reports, posters and speaker series highlighting the fossil fuel industry’s anti-science disinformation campaigns and lobbying efforts and the opportunity for academics to stand up against it. Divestment campaigns can appeal to academic communities’ value for the integrity of science through ‘empowerment marketing’, calling the audience on a ‘hero’s journey’ to stand up for science by acting against climate change.
Even individuals who recognize the dangers of climate change can feel overwhelmed by the scale of the crisis and struggle to identify what actions to take themselves. The divestment campaign can provide provide paths for individual action at the local level and also emphasize the importance of collective community collaboration. Examples include:
Advocating for divestment alongside other sustainability and climate action campaigns. In March 2014, 398 youths risked arrest in a peaceful act of civil disobedience at the White House in opposition to the Keystone XL pipeline. This action directly resulted from the collaboration of divestment campaigns at several colleges and universities.
Engagement with the student body through solar cell building workshops, kickoff meetings, climate movie screenings and participation in community events such as the Climate CoLab.
Collaboration between students, alumni and faculty: At Harvard University, 157 faculty have publicly called on their President to divest.
With the motivations (‘why’) and approach (‘how) established, a divestment movement must offer an actionable, meaningful solution. Particularly in an academic community, divestment’s theory of change should be clearly communicated, grounded in science and policy, and open to debate. This can be achieved by, for example:
Active negotiation between students and their university’s administration.
Publishing opinion pieces, infographics and reports, hosting public talks and panels, and tabling and canvassing.
Who will take these actions?
We propose that colleges and universities are uniquely positioned to lead the way on fossil fuel divestment. As respected leaders in scientific and political issues, the voices of universities proclaiming their disavowal of financial association with the fossil fuel industry would carry much weight in public and political discourse.
Moreover, college and university divestment campaigns provide an ideal training ground for young activists and organizers. Major pieces of legislation placing the common good over the concerns of powerful special interests - from the Nineteenth Amendment (granting women’s suffrage) and the Civil Rights Act to the creation of the Environmental Protection Agency - have been precipitated by grassroots social movements.
We believe that climate change action will require a similarly strong social movement. Universities act as microcosms of society, placing student organizers and their constituents close to centers of power (in this case, the university’s administrators) and teaching students the organizing skills that will prove critical in strengthening the growing social movement behind climate change action. These student campaigns may draw inspiration from past divestment campaigns and from organizations such as 350.org, and complement each other’s efforts, but these fossil fuel divestment campaigns are all student-led and -organized (and more effective because of it, given the unique environment and culture of each campus).
Over 65,000 people have signed a petition supporting Harvard University’s divestment campaign. Students there have voluntarily risked arrest while demanding fossil fuel divestment. The organizers, recruiters and attendees of this September’s historic People’s Climate March in New York City include members of many of the 450 divestment campaigns at universities across America. An Oxford University study concluded that these campaigns have resulted in the fastest growing divestment movement in history.
Where will these actions be taken?
Like many strategies for action against climate change, divestment is strengthened when more people and institutions participate. Indeed, one advantage of divestment is that it is possible at many scales:
Individuals can divest their own holdings, and many options exist for fossil-fuel-free reinvestment.
Colleges and universities, as trusted and respected leaders in the public eye, can divest their endowments (often amounting to millions or billions of dollars). Thirteen universities have thus far committed to divestment from all, or a subset, of fossil fuel companies.
Religious institutions, philanthropic organizations, asset managers, and any group with an endowment are all capable of taking leadership through divestment. The World Council of Churches, the Unitarian Universalist Association, the United Church of Christ, and many other institutions representing over half a billion members have all committed to fossil fuel divestment.
Cities and states can divest their pension funds. To date, 28 cities (26 of them in the United States) have committed to start the process of divestment.
Even entire nations can divest. Norway has commissioned a panel of experts to consider divestment of the country’s $840 billion sovereign wealth fund.
Divestment would be effective in changing public and political perceptions wherever in the world it is undertaken. However, as the nation most at fault for climate change and as one of the nations most capable (through its wealth and international political leadership) of taking the actions necessary to stop it, the United States is a prime location for the advancement of fossil fuel divestment campaigns.
How much will emissions be reduced or sequestered vs. business as usual levels?
The primary impact of divestment is not in the direct prevention of emissions; we do not expect that divestment will bankrupt the fossil fuel industry or directly hinder its operations, as less scrupulous investors may buy the shares that others have sold. Rather, the value of divestment lies in a diminished public perception of fossil fuel companies and an elevated public engagement with the climate crisis, and in the ensuing shift in the sociopolitical landscape in which legislation is considered. Divestment is a step along the path to a strong price on carbon that accurately reflects its cost to future generations, which has the potential to keep global warming below 2 degrees Celsius by preventing the emission of roughly 500 gigatons of carbon. It is admittedly difficult to assess the exact emissions reduction potential of divestment. It is equally challenging to quantify the impact of Rosa Parks or the “I have a dream” speech, yet even harder to deny that they moved the world.
What are other key benefits?
A widespread fossil fuel divestment movement has many ancillary benefits:
Participation in divestment campaigns can serve as a first step into the realm of activism for those previously unsure about what they could do about climate change. This can lead to greater involvement in other environmental or social movements. Many of this proposal’s authors have found their entrance to climate leadership through their college divestment movement.
Fossil fuel divestment campaigns can promote greater scrutiny of investment portfolios, leading to more socially responsible investing with respect to other issues - e.g, the ongoing divestment campaign at Harvard University has led its endowment managers tosign on to a United Nations-backed code of responsible investment.
The fossil fuel reserves listed on the world’s capital markets already exceed the amount that can be burned to uphold the Copenhagen Accord. Divestment will secure investors against a major risk of devaluation of fossil fuel assets.
What are the proposal’s costs?
The direct cost of divestment is negligible; there is no cost inherent in deciding where to invest one’s money. The indirect costs are, however, more uncertain. First, fossil fuel-free portfolios may underperform. However, this assumption seems to be unfounded: a study of historical performance by Aperio Group, LLC, a financial advisory firm, found that divestment has "negligible impact on risk or profit."; the research firm S&P Capital IQ found that a hypothetical portfolio would have been5% better off had they divested 10 years ago.
Second, potential profits from continued investment in fossil fuel companies may be lost, provided that such companies remain profitable. But as explained above, to stay below 2˚C of warming, fossil fuel companies would have toforego burning two-thirds of their reserves. This risk of a “carbon bubble” has spurred notable figures such as World Bank President Jim Yong Kim and United Nations climate chief Christiana Figueres to urge divestment from carbon-rich holdings.
Most importantly, a grave opportunity cost exists for not divesting. If individuals and institutions continue to endorse businesses whose product causes catastrophic climate change, the momentum of this fossil-consuming train may carry us to wreckage. A recentreport estimated that “damages from storms, flooding, and heat waves are already costing local economies billions of dollars”, and will cost the US hundreds of billions of dollars by 2050 if we continue on our current path. The LA Times called climate change "the fundamental economic challenge of our time."
The projected economic costs of climate change suggest that doing nothing – including not divesting – is far outweighed by what we gain by investing in, and thereby helping to bring about, a fossil fuel-free future.
The timeline for divestment must match the urgency of the climate crisis. In order to hold global warming below the 2 degree Celsius guardrail limit, all actions to mitigate climate change - including divestment - must come into effect within the ‘short term’. We propose that institutions, and universities in particular:
Immediately freeze any new investments in fossil fuel companies
Divest within five years from direct holdings in these companies and from any commingled funds that include fossil fuel public equities and corporate bonds
In addition, a divestment movement’s timeline could include:
Students and administration engage in negotiations while building campus-wide support through events and actions like those described above.
Faculty/politicians/celebrities endorse divestment and student campaign, raising broader societal debate about climate change action.
Since the primary impacts of divestment are social and political rather than economic, the public announcement by institutions of decisions to divest and of progress toward full divestment is of great importance. We would therefore propose that all institutions undertaking divestment:
Publicly and vociferously announce divestment, leveraging their connections and influence with alumni, celebrities, politicians and the media.
Clearly publicise the theory of change of divestment, offer support to other university leaders, and call law and policy makers to bold action.
Release annual reports of their progress toward complete divestment from fossil fuel companies.
Pitzer College is a case in point. It announced divestment at a live press conference featuring the college’s President, Trustees (including actor Robert Redford), and student and faculty divestment campaign leaders, each of whom articulated the importance of divestment as a catalyst for climate leadership. The President has since publicly communicated to other university leaders in an attempt to grow the international divestment movement.