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I asked my campus to divest from fossil fuels and they said they can't. What now?
Not all campuses—or retirement funds, pension funds, and mutual funds, for that matter—are going to be receptive at first. Here are some responses to their top objections:
Objection: “We maintain a wall between our investment policy and our educational mission, because we don’t want to have our portfolio politicized by every issue that comes along.”
Response: Refer to the mission statement of the college, which usually says something about how its purpose is to educate young people for leadership, courage, and moral judgment. Stress the inconsistency between that mission statement and the willingness to invest in apparently anything, no matter how harmful.
Objection: “We can’t divest, because we don’t even know where the money is invested.”
Response: Most endowment portfolios are actively managed, which means that an endowment manager is being paid a lot of money to actively select and exclude stocks based on what s/he thinks will make money and what may not. So if the university’s financial managers are not using their judgment in selecting stocks, what are they doing? If the university really wanted to divest from fossil fuels, all they would have to do is tell the money managers to do so!
Objection: “We’ll lose money if we limit our portfolios.”
Response: While it’s true that fossil fuel companies are extremely profitable, they’re also very risky investments. Coal, oil, and gas companies’ business models rest on emitting five times more carbon into the atmosphere than civilization can handle. In addition, disasters like Exxon Valdez, the BP oil spill, along with massive fluctuations in supply and demand of coal, oil and gas, make energy markets particularly volatile, and therefore risky.
Report after report has shown that investing in clean energy, efficiency, and other sustainable technologies can be even more profitable than fossil fuels. It’s a growing market, with over $260 billion invested globally in 2011, and a safe place for your institution to invest.