Alyssa Chan, a sophomore at Harvard University, had never been involved in activism before coming to college. Now she’s heading up a group of students who are asking the world’s richest university to use its financial clout for tackling one of the world’s most pressing problems.
Divest Harvard is asking the university to stop investing its $32 billion endowment in the 200 publicly traded companies that own the majority of the world’s fossil fuels reserves, the primary cause of climate change.
“What I realized is that no matter how many composting bins you set up and no matter how many kindergarten kids you teach about recycling, those things aren’t going to change the fundamental problem. I saw divestment as a tactic that has real potential to change this equation,” says Chan.
She is among a growing number of students at more than 300 universities across the country who have taken up the call, led by longtime activist Bill McKibben, to launch divestment campaigns at their campuses. They are taking a cue from successful divestment tactics in the past, such as when many universities sold their South Africa-related investments to protest apartheid in the 1980s and their holdings in tobacco companies in the 1990s.
The group at Harvard has made progress engaging students, alumni, and university officials over the last year since its launch. Activities have included a student referendum in which the divestment resolution received the support of more than 70% of students, a rally for alumni, and a teach-in, according to Chan. The students also had two closed-door meetings with the university’s endowment managers.
But divestment is a thorny issue for nearly all universities, even those like Harvard, that have their own strong emissions reduction goals as well as research and education programs focused on climate change solutions. The fossil fuel industry is profitable, and fund managers’ main mission is to grow the endowment (the top five oil companies made $137 billion in profit last year, according to the worldwide Go Fossil Free campaign). Even though a school might be a large, single investor–Harvard University has direct holdings of about $34 million is fossil fuel stocks–it can’t hurt the share value of a massively profitable firm all by itself. So far in the broader campaign, six smaller colleges have agreed to divest, along with a dozen or so religious institutions, and a larger number of city governments.
Students involved in the movement don’t focus on the economic argument, but rather a moral one. “By divesting, [we’d be] sending a message,” says Chan. “We’re basically saying that it is no longer socially acceptable to be investing in fossil fuel companies.” Harvard, of course, would send a stronger message than most other schools, and would have an influence on other schools’ actions, which collectively could have more of an impact: Together, the top 500 universities hold $400 billion in fossil fuel companies.
Divestment is only one tactic in a broader range of options for using investing strategies to have an impact on the world’s energy portfolio, says Mindy Lubber, director of the Investor Network on Climate Risk and president of the sustainable business nonprofit Ceres. Large institutional investors like Harvard can also vote on shareholder resolutions to influence decisions from within–and a growing number of investors are choosing to do so.
Fossil fuel companies are unlikely to stop drilling for oil, Lubber says, but there’s also a larger push from investors to ask these firms to disclose the risks that climate change poses to their future profitability. The idea is to get these companies to disclose their risk of “stranded assets,” such as oil assets in the ground that may never make it out, due to future climate regulations or even long-term impacts, like sea level rise.
“Fossil fuel companies have huge financial risks that need to be address,” says Lubber. “The science will say they can never burn all their fossil fuels in the ground,” she notes. It’s possible that more disclosure or risk could hurt the share value of an ExxonMobil far more than small divestments ever could.
For now, the Harvard students are simply trying to gain a foothold to have a broader discussion. Chan says the students asked university president Drew Faust to be present for an open, public forum about the school’s role in tackling the global problem of greenhouse gas emissions–including divestment as one tactic.
“I am happy that we’re meeting with the administration, and at least in some form, there’s a dialogue going on. But there’s a general sense among students that we’re not being heard seriously,” says Chan. The students bristled when one administrator encouraged them to “thank BP” for the work the company is doing with renewables, she says.
Within the broader divestment campaign, there have been small victories. The First Parish Church, right across the street from Harvard Yard, has made the decision to divest its own resources from fossil fuel companies. It has hung a banner in its front yard challenging Harvard to do the same.