The movement to get college endowments, religious institutions, foundations, and pension funds to sell off their stock in fossil fuels is outgrowing its environmentalist roots and busting into the mainstream.
Starting on a couple of campuses in the United States, the divestment movement has exploded out of the universities across the globe and shows no signs of flagging. But what exactly can the movement hope to achieve and how realistic are its aims when faced against the Goliath of today’s economy: the fossil fuel industry.
This divestment campaign calls upon institutions to wind down investments in firms that have large reserves of oil, coal, and natural gas. It argues that since climate change is caused by human activity—and particularly the consumption of fossil fuels—the world needs to limit the influence of coal, oil, and natural gas companies.
80% of existing fossil fuel reserves must remain unburned to avoid the worst effects of climate change, yet the fossil fuel industry continues to exploit the planet for more. Globally, the industry spends $1.8 billion a day searching for more reserves of oil, gas and coal. This has been dubbed as ‘an extremely expensive suicide mission’.
To invest in the fossil fuel industry is to fund climate change, perpetuating the devastating impacts upon people and planet that come along with it, argue supporters of divestment.
The role of students
With universities historically being hotbeds of student activism and political engagement, and it is unsurprising that they have led the way with this campaign. Young people will be most affected by the impacts of climate change, of course, but beyond this, universities provide unique spaces where alternative perspectives can be formulated. This is reflected in the number of academic institutions that have divested: Universities like Stanford, Glasgow, and Canberra, for example.
Meanwhile, other high-profile battles at the university level are being fought out in the open. Harvard University, for example, is currently embroiled in a lawsuit against seven students over its endowment.
In tradition with the student movements of the 1960s, student activism has inspired those outside of campus gates. High-profile Harvard alumni, for example, recently wrote an open letter to the university calling for divestment. The World Council of Churches, which represents half a billion Christians, pulled fossil fuel investments last year. The Rockefeller Brothers Fund—the very one that that made its fortune in oil— has also divested.
The largest financial divestment and a huge success for the campaign has been Norwegian Sovereign Wealth Fund’s divestment from 22 companies which totals to billions of dollars in assets. In total, 200 intuitions representing approximately $50 billion in assets have divested. These staggering figures cannot be ignored.
Bill McKibben, founder of 350.org, famously said “Here’s my bet: the kids are going to win, and when they do, it’s going to matter.” But what does McKibben mean by ‘win’? What does the outcome look like it will be?
The history of divestment
To understand the potential consequences of this social movement, we must look back at the history of divestment.
Undoubtedly, the best-known example was during the 1970s and 1980s in response to the apartheid regime of South Africa. Retirement funds, mutual funds and other investment institutions sold off stocks of the companies that did business in South Africa.
It is commonly perceived that this divestment campaign was a resounding success but it has to be acknowledged that financial implications of it are unclear. In fact, it is more likely that there was relatively little impact of divestment and that the companies experienced no financial pressure at all. Simply put: some investments may have been dropped but other investors stepped in. The same is true with fossil fuel divestment.
The example of South Africa is important in relation to the current divestment campaign and comparisons must be drawn. Yes, there were relatively few financial implications for the South African companies but what is more significant is that they were ethically and politically delegitimised. The evidence of this is that global moral outrage surrounding the injustices of the apartheid government remains. Today’s divestment campaign should hope to do the same: to name-and-shame the fossil fuel industry and irreversibly tarnish its reputation.
By revoking moral authority from the fossil fuel industry, the movement has had to provide alternatives. Since the financial crash of 2008, climate change has slipped down the political agenda. Global economic devastation has meant that public perception of climate change has understandably been displaced by worries about the economy and job growth. However, the divestment campaign has argued that selling off fossil fuel investments is financially beneficial to institutions.
Despited claims that divestment can help funds avoid stranded assets carbon risk, the movement is meeting a lot of resistance. A typical example is at Harvard, where 72% of the student population voted to demand divestment.
The university response was seen by many as deeply patronizing: “We always appreciate hearing from students about their viewpoints, but Harvard is not considering divesting from companies related to fossil fuels.”
This communiqué was received poorly by divestment organizers, who vowed to redouble their efforts. “The president is going to have to change her mind, because we’re not changing ours,” sophomore divestment organizer Alli Welton responded. “Climate change is a matter of life or death for millions and millions of people.”
Where to now?
The threat of climate change is vast, abject and for those who are not directly affected by the impacts already, a group that includes many in the developed world. Many would argue that this is why insufficient action has happened thus far: it is simply too big to contend with as an individual. The divestment movement sidesteps this issue. It is a way for a group of individuals to focus on local institutions to which they are already connected.
Professor Frances Fox Piven, a specialist in social movements argues that:
We usually think people’s heads have to change. They have to become rebellious, to develop another way of understanding things. And then, maybe they are potential recruits for a movement. I don’t think it happens that way. People may become a little bit discontented and then join a movement, but it’s participation in the movement that changes people’s minds.
In line with Pivan’s argument, being involved in this movement might help to keep the ball of climate activism rolling.
Divestment’s target is ruthless economic practices that enable individuals to profit from wrecking the environment. The campaign is unlikely to thrust the whole fossil fuel industry into financial collapse. However, that was never the driving factor in the divestment movement.
Rather, divestment serves a powerful symbolic function: it politically and ethically delegitimises the notion that continuing with our unceasing investment in the fossil fuel trade is environmentally sound. Perhaps most importantly though, it inspires and collectively unifies individuals around the globe—students, church congregations, professors, and more—to take much-needed climate action.