Divestment has a long history at Stanford University. In the late 1970s, hundreds of students were arrested in one of the first major campus protests to force the school to stop investing in companies connected to the apartheid regime in South Africa. In 2005, the university sold stocks in four companies connected to the Sudan. Last week, Stanford continued that tradition: Its Board of Trustees voted to free its $18.7 billion endowment from investments in 100 publicly traded coal companies, citing concern about climate change and the need to move to alternative energy sources.
The decision marks the largest victory yet for the nationwide fossil fuel divestment movement, now active at 400 college and universities around the country. To date, nine smaller colleges, 22 municipalities and many other religious groups and foundations have signed on. While it was not a full win–Stanford will still invest in oil and gas companies, Fossil Free Stanford, the student group the Board credited with catalyzing the decision, called the victory a “groundbreaking” one for the climate movement.
Students running similar campaigns at other campuses agreed. “It’s extremely exciting and encouraging,” says Chloe Maxmin, a Harvard University junior who has been leading an increasingly contentious campaign at her school. “It really shows us that this is possible, it won’t harm the university financially and that we can use our investments to better the world, instead of continuing to invest in fossil fuels. To have Stanford say our investments have an impact and we need to be responsible for them is really powerful.”
Students at Harvard, the school with the largest endowment in the country and arguably the largest influence, have been encountering stiff resistance from the administration. Though the students have had off-the-record meetings with the administration and held a university-wide student referendum that passed with 72% support, the school won’t agree to hold a public meeting to debate the divestment issue–even with dozens of faculty members signed onto a parallel campaign supporting the cause. At the end of April, in hopes of winning an open meeting, six students blockaded a door to an academic building. On the second day, Harvard Police arrested one of them.
Maxmin was surprised by the arrest, but said the university’s response has drummed up more support. “So far, our campaign has gone through all of the normal channels to engage with the administration and the student body. This has been our first radical action and it has done more to galvanize support than anything before,” she says.
In writing about the issue in a letter last October, Harvard University president Drew Faust questioned the effectiveness of any university, regardless of its endowment size, impacting the financial health of a large energy corporation. She called the tactic “unwarranted and unwise,” especially when such a political decision could hurt Harvard’s own returns.
It’s true that the financial case for divestment can be shaky. When socially responsible investors sell their holdings, others are often more than willing to buy them, and the result may be only a negligible effect on the target company’s value. But proponents of divestment argue that it’s about more than just the bottom line. High-profile divestments–because they involve not just words, but money–can dramatically raise the profile of a cause and add to public pressure, as was the case in the South Africa divestment campaigns.
Stanford’s board, of course, may have made the decision to divest from coal mining companies for its own financial reasons, as well as moral ones. In part due to environmental regulations and a shift to other forms of energy, coal company stocks have not performed particularly well recently. In a future of climate change, experts believe their long-term value is even less certain.
Whatever the motivation, like the students at Stanford, Maxmin recognizes the power of Harvard’s brand as a symbol. “We’re using divestment as a tool to create dialogue where there was no dialogue before,” she says.