This article explores briefly the morality of divesting, pulling from examples of how we’ve divested before from tainted finances relating to the apartheid, arms, and tobacco. However, the main focus of this article is how it makes financial sense as a portfolio manager to divest now from fossil fuel companies rather than later. This article does a good job exploring the ways that divesting is actually an investment into the financial security of an institution. Author Alan Rusbridger notes that the risks of holding stakes in fossil fuel companies hinge upon the environmental movement’s and world leader’s ability to halt the use of fossil fuels. In other words, there is an impending financial “environmental bubble” that will collapse when companies are forced to keep fossil fuel reserves underground. The author Alan Rusbridger has an extensive and credible background in journalism, which validates the sources cited in the article. The Guardian has been recognized as a reliable news source, though it has slightly left-leaning biases.
This article in the New Yorker written by William MacAskill details the beginning social changes brought on by divestment in South Africa as a response to the apartheid. This social activism campaign was a phenomenal success with around a hundred and fifty educational organizations divesting from foreign companies doing business in Africa and perpetuating a racial system based on discrimination and hate. Although divestment can make investing socially responsible, the article states that it has no effect on the market value of shares meaning that it cannot be used as a tool to reduce a companies’ profitability. Many claims stemming from divestment have misguided individuals and theoretically distract people from the real cause by using valuable time and resources that could be allocated elsewhere. MacAskill uncovers the truth of investing by describing that if “an ethical investor sells a share, a neutral or unethical investor will buy it” for less. These “sin stocks” produce higher returns than their ethical counterparts making divestment a risk as a means of social activism. Even though the truth of divestment can appear misleading, it is a media hook for creating stigma surrounding fossil fuel industries and with time could lead to fewer people supporting and working for these companies. This change in the labor force would in turn affect large corporations which rely on the back-breaking labor of lower- or middle-class individuals. MacAskill ends his article by admitting that there is a risk of confusion in divestment because it does not directly hit “the pocketbook” but can still cause great social change when used strategically and mindfully.
This article is the first of its kind that examines seven arguments for and against divestment and the actual effectiveness of it all. It begins with the movement of divestment. Stating that it is one based off of principles of ethics and doing such can help shape the public’s perception and policymaking on climate change. Then, it gets to the arguments for divestment: the moral high ground (still) at the forefront can push policies and societal change, when the truth about the destruction of the fossil fuel industry is in public conversation and people take a stance against them, the industry's power in politics may diminish, the industry has used up so many resources that advancement is at a serious standstill (so why not focus on green technology?), climate change is affecting global assets as is so, divestment and investment balances that, and that investors must wake up to the emergency of climate change. The arguments against divestment: it is merely symbolic with no connection to economics and reducing emissions, divesting from strictly fossil fuel industries does not actually get to the problem of emissions, not having this “evidence” could portray a bad public image on the climate crisis, focusing on divestment from these industries could take away from “more effective climate action,” advocates must focus on behavior changes instead of the industries, only a “few” people want divestment so, why should we listen?, and lastly, institutions have a responsibility for themselves and to keep their doors open with students learning, not a responsibility to societal changes. Overall, both sides are summarized quite well in this article, being the most complete and comprehensive comparison I’ve found.
This piece talks about the benefits of divestment along with the challenges. However, the author supports divestment as a tool for starting a conversation and putting pressure on investment companies outside of educational institutions. However, he does explain that divestment alone is not effective. It is the conversations it starts and the political pressure from these conversations that makes it so effective. One institution divesting from fossil fuel companies, which hold a significant percentage of the global economy, will not put a dent in the stocks of the company, and there will always be other investors waiting to buy those stocks. Early on, the author also cites the possibility of the divestment campaign to be financially beneficial for the investor. The reason for this is a little unclear. However, Apfel paints this picture as someone who has been a part of this campaign since the beginning and seems to believe that it holds a lot of positive opportunities for the future. In the case of this paper, Daniel Apfel is an executive director at Responsible Endowments Coalition which is a socially and environmentally conscious investment firm targeting colleges and universities.
Divestment from the fossil fuel industries of coal, oil, and gas is a strengthening campaign as climate concerns climb. However, a big argument against divestment is the potential lost for investments that it could cause. This article finds that this is not true. That when looking at fossil fuel stocks, they are neither that competitive nor diverse. Divesting from fossil fuels in a portfolio addresses the stronghold that these institutions have on the global political and financial landscape. This movement demands investors take into major consideration the “ecological impacts” of what they are financing, specifically, the public fossil fuel industries. But still, the moral high ground for divestment is not enough and looking at “Modern Portfolio Theory,” the more diverse portfolio, the more return on investment. By using this theory and looking at a wide range of investments over a longer period of time, this study finds that divestment has not severely impacted the performance of the portfolios. Nonetheless, the overall amount of divestment literature out there is still slim.
This news article includes several responses to a previous article titled “Why Divestment Fails”. The centerpiece to all of the responses were that the purpose of divestment is to send a message, rather than to create financial damage for the companies being divested in. The responses were written by a collection of university seniors and faculty from Stanford, Pitzer College, Harvard, and UC Berkley. This article does more to offer a response to some misinformation in a previous argument than to offer quality material on why divestment matters. The same information found in this article could be found in another that is more focused. Also, the date of publication is in 2014, so a more up-to-date source could be found. However, this article could be a good jumping-off point for further research, specifically for finding out more information on Stanford University’s Advisory Panel on Investment Responsibility and Licensing, for example.
This is a long report on why divestment is a financially wise decision. This article is making the claim that the returns on fossil fuel divestment are not as strong as they used to be, and therefore, are becoming more of a risk to the investor. The authors cite that the stocks on oil barrels were some of the weakest in 2017 even though the price per barrel was increasing steadily for the 2 years prior to that. In addition, the author also claims that the presence of renewables could have a large impact on the market power of fossil fuels. This will be accomplished by taking investments and possibly keeping energy prices low(21). Tom Sanzillo is the Director of Finance at the Institute for Energy Economics and Financial Analysis (IEEFA). Kathy Hipple is a financial analyst along with Sanzillo at the IEEFA. Clark Williams-Derry is the director of energy finance at the Sightline Institute.
https://www.vox.com/2019/9/18/20872112/university-california-divestment-fossil-fuel-climate-change
In this article the author discusses the University of California's decision to divest from fossil fuels, and how it is a leading step for others to follow. He describes how for the University of California System, the choice to divest was actually more for economic reasons rather than environmental, the investments held a long-term risk. The article then goes on to talk about how though it was more of an economic choice, it has led more universities to divest, yet still some are very hesitant to do so. The article ended by discussing how changes like this will continue happening, due to climate change being acknowledged as a massive issue today, and presidential candidates, starting to support it.
https://www.nytimes.com/2018/07/12/climate/ireland-fossil-fuels-divestment.html
This article discusses the passing of the Fossil Fuel Divestment Act 2018 in the Republic of Ireland, and how it is great for the divestment movement. The author discusses how the country is moving roughly $10.4 billion out of fossil fuels to elsewhere, to decrease their mark on climate change, as well as lead others into divesting. She discusses how Ireland is the first country to fully divest, where as Norway has only started discussing full divestment. She also discusses how other large organizations are also starting to or already have divested, such as the Church of England, and others like the Pope are pleading with fossil fuel companies to consider the harm they cause the planet. Overall, this short article explains why Ireland has chosen to divest, as well as how it can impact more groups.
Bill Gates makes the case: divestment from fossil fuels will have little effect in reducing the global climate emissions we need. Instead, we should work to create resilient and adaptive communities. Technically speaking, Gates says thus far, divestment has done zero to reduce emissions. However, the point that Gates makes, is arguably the point that pro divestment advocates make. In that first, the divestment from the apartheid system was an important contributor to taking down that system. So, divestment is just as much an important symbolic gesture as it is financial. And secondly, that just divesting and negating opportunity for financial growth of an institution is not enough. That advocates must follow-up with alternative and sustainable investments as well. But honestly, no duh? If we see a problem, we have to fix it and follow-up.
In this news article the author discusses how students in Nebraska are and have, pushed their universities and colleges to divest from fossil fuel. It discusses how multiple colleges and universities currently have students pushing for divestment, some of which are successful whereas others are not. Universities discussed are Doane, which is the first university in NE to announce full divestment by a set date, Creighton, where students held a referendum, yet the president dismissed the proposal, and Nebraska University-Lincoln, where students and the board of regents are starting to have discussions about if and why they should divest. The author also discusses how divestment campaigns are becoming more frequent and known, such as the Harvard-Yale Game protest, and some of the reasons why some universities are not divesting, because they believe that they can control the fossil fuel companies better by being invested in them. Overall this article gives good reasons as to why the schools should be divesting and the ways in which they are going about it.
This article relies mainly on five reasons why academic institutions such as colleges and universities should divest from fossil fuel industries. The arguments include moral responsibilities, for both the industries and institutions, pragmatic environmental projections, historic divestments, and divestments as responsible portfolio management. This is a lot of information to cover, and the article does a good job of citing its sources throughout. One flaw of this source is that it is from 2013, so a few of the hypotheticals about economic consequences of divestments are currently being seen (in their early stages). The article is also written by Bill McKibben, who has been an outspoken journalist covering the issue of Climate change with a bias that has left-leaning tendencies. Still, McKibben’s credentials as a reliable journalist are proven, and the magazine Rolling Stone is credible. This article does a great job of laying out the basic structure of many of the main arguments in favor of divestment, proving its function as a introduction to the basics of pro-divestment arguments.
This article is about the returns on investment of divestment from fossil fuels. They acknowledge that other studies have found mixed reviews or returns to be unfavorable, that by their study they found that: “low-carbon portfolio typically earns a slightly higher rate of return than the overall market, due to the poor performance of the fossil fuel industry” and they are therefore in favor of divestment. They found that portfolios lacking fossil fuel investment actually did better than the ones with fossil fuels due to fossil fuels performing badly over their study period.
This article is pro university divestment, asking the question “why should universities invest in an industry that has deliberately sought to undermine the knowledge that we have produced?” Rather than posing questions and answers with numbers and facts, this article is asking questions about how ethical and unethical it is to invest in something that will ruin the planet. When reading this article, it had an effect that numbers couldn’t have on me (maybe I’m the target audience- a college student that thinks with her heart more than her brain). Asking questions like “what’s the point” and “what is the logic of working diligently- and spending billions of dollars of taxpayer and philanthropic money- to understand the threat of disruptive climate change, only to invest in an industry whose activities virtually guarantee it?” Meaning- why are we paying money to go to college to learn about how bad fossil fuels are and that we are destroying the environment, if the institution that is teaching us this is just making money off a dying planet. This article is basically saying: if Allegheny College and other universities claim to care about climate change, why are they still investing money in companies that are scientifically proven to be destroying the planet?
This article about the University of California divesting in fossil fuels. It talks about the institution’s decision to divest and also the implications of the decision. An interesting point that is made in the article, which goes against most environmentalist’s reasons for divestment, is that these companies now pose a long term risk in profitability. The UC financial staff said they did not treat this case of divestment any different from other instances in the past. However, the article did highlight the pressure that environmental activists could now leverege on other institutions, such as the massively wealthy Harvard and Yale. The article references the persuasive power a move like this could have on carbon emitting companies as well. Lastly, this article references the political implications divestment will have on 2020 elections, saying that some of the rhetoric around the campaigns will now be changed. Umair Irfan is an environmental writer for Vox and has held positions in the past as a climate and energy journalist at different papers.
This article is pro divestment from fossil fuels claiming that Universities will still get their money back. The college is critical of investment decisions that are made based on the need for money rather than for moral and political support. Hampshire college reported that their “five-year investment returns have performed better (6.4%) than the average return of the more than 800 colleges tracked by both NACUBO Commonfund Study (5.4%) and Bloomberg Endowment Index (4.5%)” meaning they are actually making more money. The article then goes on to make claims of the irony of colleges that teach about morals and their refusal to divest from fossil fuels. If a college claims to be environmentally friendly but is still invested in companies that promote climate change, then something is morally wrong.
This article highlighted the decisions that lead Doane University in Nebraska to divest from carbon by 2030. The main argument that has been used by student groups to persuade this change was money. The fossil fuel free index that was written by a group of economics students turned out to be more profitable than one the the school already had. The way of framing the issue was also at Creighton University in Omaha where students overwhelmingly voted to divest from carbon. An overwhelming number of colleges and universities are divesting and strategy that has actually been effective has been to frame it in terms of economics. Many of these huge companies are just not as profitable as they once were and with the proper work, a divestment strategy can make a lot more money. This paper gives a great framework for the way that divestment has worked at other schools and can help us decide how to frame it at Allegheny.
In this article, Bill Mckiben, one of the most influential names in the environmental movement, makes the case for the impact that carbon divestment has already had on the fossil fuel industry. He shows the correlation between the divestment movement and the fall of the Peabody coal, as well as a drop in Shell’s stock price. The main reason for this is that a strong divestment movement does more than almost anything else to paint the fossil fuel industry in a negative light. As more and more organizations from churches to universities to financial brokers are divesting it makes it so that anyone who still holds onto their shares is seen as supporting the fossil fuel industry and more organizations don’t want to do that. Mckibben argues that while divestment isn’t the end-all solution, it can play a huge role in weakening these companies’ reputations and hopefully push them to change.
When stocks damage both portfolios’ and the planet’s carrying-capacity for all organisms, the need to stop investing in Fossil-Fuel America appears bigger than ever. Popular environmental forum The Conversation gathers and explains data that calls into question the rationale for investing in risky coal, gas and oil industries that take a heavy toll on the environment. Not only are these investments affecting valuable life support systems, but funds continue to lose money on fossil fuels; this fact can no longer be ignored. The article specifically references California’s CalSTRS and CalPERS public pension funds that serve more than 1.9 million people for retirement (teachers, police officials, first-response personnel and municipal and state employees. CalPERS has only around seventy percent of what it needs to pay current and future obligations, similarly, CalSTRS can fulfill a mere sixty-four percent of obligations; both pension systems are underfunded. Research shows that they could have made upwards of $17 billion if they had divested from fossil fuels a decade earlier. Efforts from groups such as Fossil Free California have pressured these funds to eliminate their fossil fuel holdings and over 1,110 institutions have committed to policies of some form of blacklisting for companies in coal, oil and gas investments making divestment a clear and emerging trend. Although Fossil-Fuel America is a shrinking sector, it has a profitable past with a fair amount of people and money. However, the evidence is clear that the industry cannot hope to bounce back, and the challenge now lies in changing the minds of the American people.
This paper focuses on divestment from the perspective of higher education institutions in Canada. They examined the 220 total HEI’s and found 38 active divestment campaigns and 8 that have divested to some degree. Despite a lot of knowledge about divest in the US, there has been little research into divestment by HEI’s in Canada, which this paper provides. The Cons that the paper notes are the lack of impact on the fossil fuel industry that divest really has and the cost risk of the money involved. The pros are that divestment encourages other institutions to do the same and allows for the public to have a greater say as to what fossil fuel companies are doing as a result of media coverage. Studies have shown that investing in sustainable energy sources has comparable returns on their investments. Also it is important for divestment campaigns to work when you know the the “contextual factors of each institution and the actors involved, resources available, and local approach to social justice”
This paper discusses most of the reasons that universities should divest from carbon. The authors highlight the morality of institutions of higher learning have a responsibility to not support industries that they know are doing wrong. They also talk about the more practical reasons. One of the ain ones is that, while fossil fuels are good investments now, they will continue to get worse over time as renewables become more competitive in terms of energy production, fossil fuels become more and more expensive to extract and the true costs of emitting greenhouse gases becomes more externalized. The authors argue that universities that are on the fence about divestment need not choose all or nothing. There are lots of responsible ways to slowly divest, first in the highest polluters and then in other industries. They also push for more collaboration between universities that are thinking of divesting as that makes the process a lot easier. This is an amazing resource for us and I think that it can help us form a lot of our arguments for divestment on campus.
This article looks at divestment as a way to free funds to invest in renewable resources. The continuation of mining for fossil fuels is looked at as an activity that did not receive its “social license.” This meaning that as there is growing support in fixing the crisis that is currently affecting our world (climate change) and these fossil fuel companies need to operate under the terms that are agreed upon from a social perspective. The divestment tactic from the standpoint of this article is that by divesting, share prices in fossil fuel companies will reduce thus increasing the operation cost and the cost to sell fossil fuels, making it less appealing. With fossil fuels being less appealing, people would want to look into other sources of energy. The decline in fossil fuel appeal will help the transition from fossil fuels to renewable energy causing an opposite reaction. Investments in renewable energy will increase so the cost of operating decreases while making renewable energy sources cheaper so that even low-income people can afford it. The movement to divest has accumulated trillions of dollars in divestment promises thus far and will continue to grow.
This article highlights the negative impacts of fossil fuel companies. Many fossil fuel companies operate in unethical ways; for example, placing dumping sites in low-income neighborhoods. It is stated that science has proven that there is no way for us to burn all the world’s fossil fuels without having a catastrophic climate change. Even if someone reads this article and does not believe in climate change, from a charitable perspective, it is only right to divest because choosing to invest only supports a business that has negative effects on health and humanity. It is even pointed out that there are some fossil fuel companies that are fixing their investment models to renewable energy showing that even fossil fuel companies are looking to change. This article was written in the UK and highlights that the continued support for fossil fuel companies is causing a tremendous amount of job losses in the area of renewable energy thus keeping the UK from having the means to make the switch from fossil fuels.