Universities

Students from top universities demand divestment

They organized rallies and demonstrations. They implored their institutions on social media to give up their lucrative fossil fuel holdings. They held press conferences, staged walkouts and accused directors of complicity with Big Oil. They held signs, distributed petitions and broke up college football games. But now, students at top universities across the United States have decided to take a different approach to demanding divestment from their universities — and it just might work.

Efforts to demand divestment from fossil fuels have been emerging in higher education for more than a decade now. The international fossil fuel divestment movement has historically been based on the argument that colleges and universities have a moral obligation to adopt an appropriate standard of behavior – and that means to divest investments from fossil fuel assets. and reinvest them in climate-friendly solutions. This “social license to operate” standard has fundamentally challenged the legitimacy of the fossil fuel industry due to its major impact on climate change.

Until recently, student efforts to demand divestment have been only partially successful. Endowments, portfolios and pension funds worth just under $40 trillion have pledged full or partial forbearance from coal, gas and oil stocks. These amounts sound good, but they are not enough, according to many students and others.

What’s Different About This Divestment Effort? Students at America’s top 5 universities have filed legal complaints accusing their institutions of breaking the law with their investments in the fossil fuel industry. They accused their institutions of violating the Uniform Prudent Management of Institutional Funds Act (UPMIFA), which is in effect in all states except Pennsylvania, the District of Columbia and the US Virgin Islands.

How the institutions broke the law, according to the complaint? Complaints allege that in addition to flouting UPMIFA’s requirement that non-profit organizations such as the targeted universities invest in consideration of their “charitable purposes”, the schools also violated their duty of care by investing in “financially risky fossil fuel stocks, which have underperformed for years and are currently at risk of a general collapse in value.

What is the outcome of investing in fossil fuels, according to the students? Institutions that invest in fossil fuel companies cause environmental and health damage. The complaints filed point to environmental disasters directly attributable to the climate crisis, such as floods and forest fires. Additionally, the plaintiffs argue that because coal, oil and gas investments have an uncertain future, they are not financially responsible, as required by law. These are known as “stranded assets”.

What is the purpose of this approach to demanding divestment? The students hope the coordinated action will not only pressure their own schools to divest, but potentially set a new legal precedent for all institutional investors.

What are some examples of behaviors that students question? In their complaints, students point out how the destruction caused by fossil fuels conflicts with the charitable purpose or educational goals of their schools. For example, Yale’s complaint alleges that fossil fuel investments run counter to the school’s mission to “improve the world today and for future generations through research and study.” exceptional properties, education, preservation and practice”.

Where did they complain? Students from the Massachusetts Institute of Technology (MIT), Princeton, Stanford, Vanderbilt and Yale have filed complaints with their state attorneys general: Massachusetts, New Jersey, California, Tennessee and Connecticut.

How much money is at stake? The 5 schools’ endowments collectively represent over $155 billion in assets under management.

Why are colleges and universities investing in fossil fuels, anyway? Many university leaders have long resisted calls for divestment, stressing the imperative to invest their endowments wisely and reminding students of the long-established strength of the fossil fuel industry. They also argue that funds should not be used as political instruments.

Do higher education administrators and power brokers have a stake in investing in fossil fuels? In some cases, the complaints indicate potential conflicts of interest between university leaders.

What organization helped students take action? The Climate Defense Project (CDP) offered advice and mentorship to student activists. CDP provides training to empower individuals and communities to take action on climate change, support individuals in climate-related legal actions throughout the trial process, and ensure that activists have the best and latest evidence on their side.

Did the students benefit from institutional support? You bet. The students were supported by alumni, campus groups, climatologists, community members, elected officials, environmental organizations and professors.

Do these deposits have a precedent? Yes. The new filings follow a framework previously used by divestment campaigns at Boston College, Cornell, Harvard, Johns Hopkins, Marquette and the University of New Mexico.

What groups outside of higher education have already disengaged from fossil fuels? Huge pension funds serving New York City and their state employees announced in 2021 that they would sell stocks. The Maine Legislative Assembly ordered the divestment of the state pension fund, as did Quebec’s large pension fund. Whole faith groups – Episcopalians, Unitarian Universalists, American Lutherans – joined the call. The pope became a strong proponent of divestment, and many prominent Catholic institutions agreed to divest. Major city mayors have pledged their support, including Los Angeles, New York, Berlin and London. The whole country of Ireland has said it will divest itself of public funds.

How do students feel when they ask for a divestment? Several students said it was difficult to observe the deliberation and caution of university leaders in the face of the urgency of the climate crisis for their generation. For Miriam Wallstrom, a senior from New Mexico who is an organizer with Fossil Free Stanford, her first year began with classes canceled due to smoke from wildfires, a symbol for her of the urgency to fight climate change. . But despite student petitions and referendums calling on the university to divest over the years, “there is a lot of frustration and disappointment and a sense that we are not being heard,” she said. “It’s an institution we all love, and we think the board is not acting in a way that respects the values ​​we believe in.

Sources for this article include Common Dreams, Grist, The Washington Post, and The Guardian.


 

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