At the Paris Climate Summit, where 195 nations vowed to hold global warming to 1.5 degrees Celsius, an activist group announced something it hoped would signal the end of fossil fuels. 350.org declared that fossil fuel divestment commitments now top $3.4 trillion. That represents a 30 percent increase since September 2015, when the divested figure stood at $2.6 trillion. According to May Boeve, 350.org’s co-founder, more than 500 institutions have pledged to sell off investments in coal, oil, and natural gas companies, up from 400 six weeks earlier.
350.org is pushing Congress to ban drilling in the Arctic, Montana’s Powder River Basin, and all of Wyoming. It also wants to keep the oil export ban in place. The fossil fuel divestment movement, now at more than a thousand institutions, exerts political pressure by projecting an image of broad public support.
That image is exaggerated, as are the financial claims. $3.4 trillion represents the net assets of all institutions that have pledged some type of reduction in fossil fuel investments, not the amount of money actually divested, or even the money pledged to be divested.
How much money has actually been moved from the fossil fuel industry? No one has investigated this. But a recent study I authored for National Association of Scholars offers an instructive example. I scrutinized the divestment decisions and implementation plans of every American college and university, and interviewed college presidents, trustees, and financial officers. I found that “divesting” colleges routinely leave the majority of their fossil fuel investments in place. This suggests that the institutional support for divestment—and more broadly for instantly ending the use of fossil fuels—is much lower than 350.org’s $3.4 trillion figure suggests.
Only 34 percent of collegiate divestment decisions affect all fossil fuel investments. Many—about 41 percent—target only direct investments and select mutual funds. Another 17 percent target only direct investments in coal- and tar sands-extracting companies. Some pledge only to screen out future direct investments.
Closer case studies of 13 universities that pledged to divest show that on average, divesting colleges retained about 50 percent of their fossil fuel investments. Prior to their divestments, these 13 institutions owned $34.2 million in fossil fuel stocks; afterward, they owned just under $16.9 million. These numbers are in sharp contrast with 350.org’s data, which suggest that nearly three-quarters of divesting colleges exclude 100 percent of fossil fuel investments.
Why would a college claim divestment yet retain a majority of its fossil fuel stocks? Trustees often cite the costs of divestment (at Swarthmore, $100 million over the next ten years; at Bryn Mawr, $10 million over five years). There’s also the twisted logic of repudiating fossil fuel companies on which the economy, for now at least, depends.
Some seem to sense a need to placate activists with headlines. Some “divesting” colleges have sold no stocks at all. I call these “DINOs,” or divestments in name only. Syracuse University declared in March 2015 its “commitment to prohibit direct investment of endowment funds in coal mining and other fossil fuel companies,” but a day later admitted it had none to prohibit. Humboldt State University announced in April 2014 that it had not directly invested in fossil fuels for “more than a decade” and then pledged to “continue to abstain.” Oxford University announced it would “avoid any future direct investments in coal and oil sands.” It had no such investments and vowed to “maintain this position.”
The most recent divestments, too, are weak. The University of Massachusetts announced in early December that it would divest only direct investments in coal companies, leaving its mutual funds (the vast majority of the endowment) intact. The State University of New York’s College of Environmental Science and Forestry declared that it “currently has no direct investments in fossil fuels and has pledged to make no such investments in the future.”
No one knows how closely other institutions’ divestments copy the gerrymandered collegiate divestments. Colleges make up about 10 percent of fossil fuel divesters. Among the others, 350.org estimates that 91 percent of divestments are “complete.” But my review of collegiate divestments suggests 350.org’s data is significantly inflated.
The incompleteness of fossil fuel divestment decisions reveals the movement as a political gimmick. The divestment campaign has succeeded in getting colleges to divest a little bit of money from fossil fuels. But 350.org’s data show it’s also interested in getting policymakers to divest from careful scrutiny of facts.
This article originally appeared in The Hill on December 18.
