Why divest from the Fossil Fuel Industry?
The impacts of climate change and fossil fuel extraction are likely the most pressing environmental and human rights issue facing this planet. Yet, for all the work that has been done on energy conservation and sustainability, governments have failed to pass comprehensive climate change policy to drastically limit carbon emissions.
At the root of this crisis is a powerful force: major corporations, particularly fossil fuel companies and their investors dedicated to preserving the status quo to generate short-term profits. They are perfectly willing to make money off their predicted reserves, even if it means breaching the 2º C limit on warming agreed on by the majority of countries. In order to limit and mitigate the consequences of climate change and resource extraction, and build a more sustainable and just world, it is imperative that we challenge the fossil fuel companies and the model of investing that allows corporate actors to halt progress.
The Fossil Fuel Divestment campaign at colleges and universities aims to challenge this status quo by activating the millions of college students on campuses around the country. Collectively colleges and universities have a minimum of $12 billion worth of stock in fossil fuel companies that extract and mine fossil fuels and another $5+ billion in other related companies: those that burn, help extract, and transport them. Yet, we know that the approximately $40 billion that universities have invested in the energy sector is not enough to have a meaningful economic impact on the fossil fuel industry. Instead, by divesting from fossil fuels, we can raise the issue of the impacts of the fossil fuel industry to the level of a moral issue and use the influence and power of colleges and universities to make a statement with our money.
It’s not just about impacting their bottom line; it’s about:
Helping a generation understand the impacts of the fossil fuel industry and prepare them to confront the industry and its power directly
Creating a national conversation around fossil fuels extraction and burning
Moving endowment dollars towards places where they can have a real impact including energy efficiency, community investment and sustainability, and other impact/sustainable investments
Driving long-term change in the way that endowments and investments are moved towards building a sustainable and socially just economy
Training students and the broader community about the importance of the way that money moves and the role endowments and institutional investors have to play in it
- Helping build a broader and more diverse movement for social and environmental justice
Why divestment? Do you really expect divesting from fossil fuels to financially hurt the industry?
We are trying to stigmatize the fossil fuel industry, not bankrupt it. Divestment campaigns complement other campaigns for environmental justice by putting the spotlight on the urgency of climate change, the culpability of the fossil fuel industry, and the responsibility we have as citizens, universities, governments, and religious institutions to make a statement with our money. Fossil fuel corporations spend incredible amounts of money to prevent political action and to reduce public awareness of the climate crisis. We can fight back against this powerful industry by creating social stigma through divestment tactics. Divestment has seen success in multiple movements, with the most well-known example being the anti-apartheid divestment movement in the 1980’s, which called global attention to South Africa’s oppressive regime. For more information on the efficacy of divestment, see the Oxford Study below.
The fossil fuel divestment movement is rapidly gaining momentum. We are part of a movement of over 400 campus and 200 community campaigns asking for divestment. Over 180 institutions and local governments have committed have already committed to divest, with over $50 billion dollars divested so far.
Why is climate change such a big deal?
Climate change has become a pressing global issue. According to NASA, 97% of scientists agree that climate change is real and caused by human activity. Consequences of climate change are numerous and include temperature changes, ocean acidification, rising sea levels and coastal flooding, increased occurrences of drought and severe storms, and food insecurity. If allowed to continue unabated, climate change will result in a world not habitable for humans These are global consequences, but they tend to disproportionately affect low-income and indigenous people, as well as those living in developing countries, making it a human rights issue. The Pentagon last year issued a report warning that the consequences of climate change could lead to conflict and war because of scarcity of resources such as arable land, food, and water. Action must be taken immediately to stop this crisis from escalating.
Why are you targeting the fossil fuel industry?
As Bill McKibben explains in the Rolling Stone article “Global Warming’s Terrifying New Math,” virtually all countries have agreed that we should not raise the global temperature beyond 2 degrees Celsius in order to avoid a global catastrophe. To stay under the 2 degree limit, we can only add another 565 gigatons of carbon into the atmosphere. The fossil fuel industry owns enough underground resources to add 2795 gigatons of carbon, and they are still seeking to acquire more. This industry has a vested interest in using all these resources, and spends huge amounts of money trying to prevent political action on climate change that may impede their ability to do so. We are targeting these corporations because they are hell-bent on burning more carbon than the atmosphere can safely handle.
Won’t this hurt our endowment?
No. Multiple studies indicate that fossil-free portfolios fare as well or even better than stock portfolios including fossil fuel companies. An example from the Aperio group is included below. Furthermore, there is a compelling argument that investing in fossil fuel companies is risky, and that there is actually a “carbon bubble.” Since all of the fossil fuel industry’s underground resources are considered their assets and thus factor into the price of their stocks, their stocks are wildly overvalued as we cannot afford to use more than a fifth of their resources. This means that fossil free stocks could drop dramatically in value without warning.
Why is this NYU’s business? Can’t this just be left to the politicians?
Fossil fuel companies are spending billions to prevent political action. As NYU is an institution of learning, they should be accepting of the scientific reality of climate change and should not be investing in companies that are threatening their students’ future. NYU currently has $139 million dollars in fossil fuel investments, which is 4% of their endowment. NYU divested during the apartheid divestment movement, as well as during the genocide in Sudan, and given the urgency of climate change, we believe it is appropriate for them to do so again.
How can I help/get involved?
People interested in getting involved can sign our petition, like us on Facebook and follow us on Twitter, ask their professor to sign our faculty letter, and talk to their friends about fossil fuel divestment. People who are passionate about this issue are welcome to attend Divest meetings. NYU Divest is a welcoming organization with lateral leadership that is sustained by participation and input from new members.