Strategy is modeled after the anti-apartheid campaigns on many campuses in the 1980s
By Joann Loviglio and Kevin Begos
Associated Press
SWARTHMORE, Pa. (AP) — In an effort to slow the pace of climate change, students at more than 200 colleges are asking their schools to stop investing in fossil fuel companies.
The Fossil Free campaign argues that if it’s wrong to pour pollution into the air and contribute to climate change, it’s also wrong to profit from it. The strategy, modeled after anti-apartheid campaigns of the 1980s, aims to limit the flow of capital to fossil fuel companies by making their stocks morally and financially unattractive. In theory, that could lead to a slowdown in how much fossil fuel is burned and indirectly speed investments in renewable energy.
The students say it’s hard for colleges and universities to ignore the arguments when scientists are teaching classes about the threats of climate change, and when the core mission of such institutions is to prepare young people for the future.
“We know this is something that’s going to really matter in our lifetimes,” said Sophie Harrison, an 18-year-old freshman at Stanford University. “The world that we’re going to be raising our kids in is going to be very different from the one we were born into.”
The campaign targets companies that own most of the world’s coal, oil and natural gas reserves. While many schools argue divestment would harm their endowments, an analysis conducted for The Associated Press casts doubt on that. The research firm S&P Capital IQ found that by one measure, endowments would have been better off had they divested 10 years ago.
The firm calculated the total returns of the broad U.S. market as tracked by the S&P 500 index, with and without the companies singled out by Fossil Free. An endowment of $1 billion that excluded fossil fuel companies would have grown to $2.26 billion over the past 10 years, but an endowment that included investments in fossil fuel companies would have grown to $2.14 billion. That extra $119 million could pay for 850 four-year scholarships, assuming tuition of $35,000 per year.
The stakes are even bigger for some schools. Fossil Free is targeting Stanford’s $17 billion endowment, and last year 72 percent of Harvard University’s student body voted for divesting its $30 billion endowment. Harvard officials responded by saying they have “a strong presumption against divestment.”
It is far from certain that the campaign will help change the behavior of fossil fuel companies or public attitudes about climate change. But Fossil Free is growing, and it’s backed by some powerful interests.
Major foundations — including the Rockefeller Family Fund — have donated more than $8 million to 350.org, Fossil Free’s parent group, and a network of influential advisers and volunteers are building a global network to support the campaign.
The campaign started in 2010 at Swarthmore College, a liberal arts school outside Philadelphia. It has spread to private and public schools across the nation, including Harvard and Stanford, as well as Yale, Cornell, Ohio State and the University of Colorado. Five schools — Unity College and College of the Atlantic in Maine, Hampshire College in Massachusetts, and Sterling and Green Mountain colleges in Vermont — have already voted to divest, and student votes are pushing for action at dozens more.
The original Swarthmore group was motivated by a visit to mining sites in West Virginia, where companies were removing entire mountaintops to get at coal.
“It’s devastating. It’s people’s land, people’s livelihoods being ripped out of the ground, literally,” said Kate Aronoff, a Swarthmore junior from New Jersey and student activist. Aronoff said the student group returned to Swarthmore and quickly “came to divestment as something that lines up with our priorities.”
During the 1980s, more than 225 U.S. companies stopped doing business in South Africa as public and stockholder sentiment turned against maintaining ties because of the country’s institutionalized racism, or apartheid. At least 27 states, 88 cities and many universities adopted policies restricting investments, leading to a loss of billions of dollars of capital in South Africa.
Some of the people who oversee endowments say the issues aren’t so clear-cut this time around. An analysis at Swarthmore found that fossil fuel divestment would cost the endowment $11 million to $14 million a year, said Gil Kemp, a member of the Swarthmore Board of Managers.
“I don’t think that there is a single board member that doesn’t agree with students that climate change is a huge issue for our world. The difference is in choice of tactics,” said Kemp, who donated $20 million to the school in February.
In 1986, after years of pressure from student groups, Swarthmore agreed to eliminate investment links to South Africa. After that divestment, the board changed the school’s policies, and Kemp said it now makes a practice of “not using the endowment for non-financial purposes.”
Industry groups and observers say going fossil-free would involve much more than just divestment. Virtually everyone uses fossil fuels, one environmentalist noted.
“We all bear some of the blame for continued use of fossil fuels — it is not fair to put the blame solely on the oil companies,” Harvard professor Daniel Schrag, director of the school’s Center for the Environment, wrote in an email to the AP.
Reid Porter, a spokesman for the American Petroleum Institute, argued that oil and natural gas fuel the economy “in the most efficient and reliable way possible.”
Jason Hayes, the associate director for the American Coal Council, a lobbying group, said the “idea of students not using coal but using their iPads” doesn’t make sense.
“Pretty much every single one of these students is going to be using a device that is powered by coal-fired electricity,” he said.
Hayes questioned why the divestment campaign isn’t targeting the entire transportation sector, since cars and trucks emit large quantities of greenhouse gases.
Others note that the students turned to divestment partly because politicians failed for decades to take meaningful action on climate change. Some cities and religious groups are also joining the campaign.
“What this this really is, is an attempt to go on the offensive against the fossil fuel industry,” said Bill McKibben, an author and one of the founders of 350.org.
The Fossil Free campaign is attracting older people, including an influential Wall Street veteran whose views have changed over time. Bevis Longstreth’s first public offering as a young Wall Street lawyer was for a coal company.
“I thought coal was magnificent,” he said.
Longstreth is a graduate of Princeton and Harvard Law School, a former commissioner with the U.S. Securities and Exchange Commission, and a former member of the American Stock Exchange Board of Governors. He was appointed to the SEC by President Ronald Reagan. He now argues fossil fuels are damaging the environment and thinks the divestment campaign can help change that.
“I believe the pressure will build” on fossil fuel companies, Longstreth said, adding that two things always get Wall Street’s attention: the possibility of making a lot of money — or losing money.
“There’s going to be a tipping point. And when that happens we’re going to have the mother of all crowds jamming one exit” to sell fossil fuel stocks, he said. “The smart fossil fuel companies will diversify.”
