March 2022 note: This page is currently out of date. Sorry! We’ll update soon.
1. What is fossil fuel divestment?
The fossil fuel divestment movement calls on students and alumni to ask their university administrations to immediately freeze any new investments in the top 200 fossil fuel companies, and to divest their endowment from these companies within 5 years.
Watch this short (2:47) video on What is Divestment?
2. How will fossil fuel divestment address climate change?
Fossil fuel companies are the wealthiest and most powerful companies on the planet, and they’re using their money to block every serious attempt to stop climate change. By convincing our institutions to divest, desponsor and defund fossil fuels, we can turn the tide of public opinion. Currently, the fossil fuel industry has enormous influence on U.S. politics through political campaign contributions and the funding of lobbyists. Even in 2012, the fossil fuel industry spent more than $140 million on lobbyists, making it the fourth largest industry-lobbying group. Also in 2012, fossil fuel companies contributed almost $15 million to Political Action Committees (PACs), and climate change deniers in the Senate took an average of $699,000 from the fossil fuel industry. Divestment holds the fossil fuel industry responsible for its culpability in the climate crisis. By shifting public support and our money away from the fossil fuel industry, we can break the hold that they have on our economy and our governments, while making way for a just transition to renewable energy.
Two companies Carleton is invested in, Anadarko and Noble, have financially supported the election of political candidates who deny climate change and consistently vote against measures that would address the problem. For example, in the 2016 political cycle, Anadarko spent over $1.4 million to help elect members of Congress. The great bulk of these Representatives and Senators had extremely low ratings on climate change issues from the League of Conservation voters. At least eight of them had a zero score. Over the same period, Noble spent almost $100,000 on campaign contributions. In addition, over the last 10 years, Anadarko and Noble have spent over $46 million to lobby Congress in support of legislation that helps fossil fuels, slows the development of clean energy resources, and/or blocks measures to address climate change.
3. Can divestment really build a movement?
The divestment movement began in 2012 and is growing rapidly. At least 21 US colleges and universities have divested or are in the process of divesting, as well as many in other countries. Students have launched divestment campaigns on most campuses across the U.S.—from Berkeley to NYU and from Tulane to the University of Alaska. The movement has expanded beyond U.S. borders to Canada, the United Kingdom, the Netherlands, Australia and Bangladesh.
The divestment movement grew so large by 2013 that then President Barack Obama mentioned it in his address on June 25th, 2013. Obama said, “Push your own communities to adopt smarter practices. Invest. Divest.” He recognized divestment as a tactic with the potential to have a significant impact on national policy.
As of December, 2018, we have marked the 1,000th divestment in what has become by far the largest anti-corporate campaign of its kind. The latest to sell their shares – major French and Australian pension funds, and Brandeis University in Massachusetts – bring the total size of portfolios and endowments in the campaign to just under $8 trillion (£6.4tn).
4. Why divest?
There are many reasons we are calling on Carleton to divest its endowment from fossil fuel companies. Here are two of the them:
1. Investments in fossil fuel companies are unethical. If fossil fuel companies are generating a profit for Carleton, it means that they are burning carbon reserves that scientists agree should not be burned. The only way that Carleton can receive positive returns on its investments in fossil fuel companies is if atmospheric concentrations of CO2 are steadily rising.
2. In the long run, investments in fossil fuel companies are unwise. The Intergovernmental Panel on Climate Change (IPCC) released a special report on the impacts of warming to 1.5oC, still devastating impacts but preferable to 2oC. Even in 2012 we knew this meant that the vast majority of the world’s proven fossil fuel reserves must stay underground. Fossil fuel companies are already losing their value and are not a safe investment (see alumni Nathanael Nerode’s summary here ).
5. Is divestment from fossil fuel companies financially risky?
Nathanael Nerode, Carleton Class of 1998, has strong data suggesting that Fossil Fuel Investments are what is risky – and that divestment is the wisest move.
Note that as of June 2015, only $4,312,998 out of our total direct holdings of $135,602,516 (3.2%) was invested in fossil fuel companies, or roughly 0.54% of our approximately $800 million total endowment.
Many studies have found that environmentally sustainable investment portfolios outperform traditional portfolios that include fossil fuel companies. A study by S& P Capital IQ found that if colleges had divested from fossil fuel companies 10 years ago, they would have earned an additional $119 million per $1 billion invested.
5. Shouldn’t Carleton focus its efforts on putting up more windmills and making its facilities more sustainable?
We applaud the effort of Carleton and other colleges that have launched major sustainability initiatives and have committed to reducing their carbon footprint by signing the President’s Climate Commitment. However, because university campuses comprise a very small fraction of the nation’s buildings, these actions alone will not stop climate change, nor do they have the potential to change the national conversation on climate change in a way that will allow congress to pass policies to address it. A singular focus on reducing institutional carbon footprints does not reflect the reality that national policies are essential for a successful response to climate change. Although personal and institutional responsibility is critical to a functional society, we need to work toward broad, system-wide changes that will incorporate the true cost of carbon emissions into the price of fossil fuels.
7. Where can I learn more about climate change, divestment and helping communities instigate policy change?
350.org – standing up to the fossil fuel industry to stop all new coal, oil and gas projects and build clean energy for all
6. What about shareholder activism? By divesting from fossil fuel companies, aren’t we giving up our say in how they operate?
In 2012, the top 200 fossil fuel companies combined were worth $7.42 trillion. Collectively, U.S. college and university endowments in 2011 were worth $406 billion and accounted for less than 0.1% of direct fossil fuel investments worldwide. Even if colleges and universities could surmount this limitation and put pressure on fossil fuel companies through shareholder activism, a shareholder resolution asking fossil fuel companies to keep their known fossil fuel reserves underground would not be practical because it would be against the personal and financial interest of each shareholder. Fossil fuel companies would be far less profitable if they agreed to keep 80% of the world’s carbon in the ground, so shareholders would be working against their own profits. Divestment removes this conflict of interest and allows for advocacy consistent with what science tells us is necessary to mitigate climate change.