Greg Dennis: Lasting, local steps toward divestment
It’s one thing to launch a national political movement. It’s another and much larger challenge to see it gain momentum.
Remember Beyond War? Remember the Million Man March? Me neither.
So the growing success of the national movement for fossil fuel divestment is all the more impressive. Launched just a couple years ago by 350.org (which itself originated on the Middlebury College campus), the divestment campaign has proven it has staying power.
The divestment movement is pressuring universities, pension funds, governments and other entities to politically delegitimize fossil fuel industries, by withdrawing investments from those companies.
It has potential to achieve the reach of the successful South Africa divestment movement, which helped undermine that nation’s racist system of apartheid.
Two recent developments demonstrate the movement’s burgeoning power. In a move that attracted national attention, Middlebury College announced it has invested $25 million of its portfolio in so-called ESG (environmental, social and corporate governance) entities. “This includes investments focused on sustainable businesses such as clean energy, water, climate science, and green building projects,” said college President Ron Liebowitz.
Although the college said last August that it would not fully divest its portfolio out of fossil fuels “at this time,” it has also committed to placing another $25 million into ESG investments. It’s empowered the student group on socially responsible investing to manage $150,000 in college money.
To put those numbers in context, the college portfolio is about $1 billion. That a “B” as in BIG.
But Rome wasn’t built in a day. It took many years — and a student sit-in — to embarrass the college into finally divesting out of apartheid South Africa.
“This, combined with other news from around the country this week, feels like a different kind of momentum than last year,” said Greta Neubauer, a Middlebury student and divestment organizer. “It is a rolling movement forward, like falling dominoes.”
As student activist Virginia Wiltshire-Gordon said about the college’s admirable new ESG investments: “I do not believe this would have happened without the Middlebury fossil fuel divestment campaign.”
Another sign of the strength of the divestment movement is the recent decision by the prestigious Pitzer College to divest out of fossil fuels. Pitzer became 11th college to announce it will divest, a step that more than 20 cities have also taken.
Why divest? The gofossilfree.org website puts it nicely:
“Divestment isn’t primarily an economic strategy, but a moral and political one. Just like in the struggle for civil rights here in America or the fight to end Apartheid in South Africa, the more we can make climate change a deeply moral issue, the more we will push society toward action. We need to make it clear that if it’s wrong to wreck the planet, than it’s also wrong to profit from that wreckage. At the same time, divestment builds political power by forcing our nation’s most prominent institutions and individuals (many of whom sit on university boards) to choose which side of the issue they are on.”
Skeptics raise a couple of arguments against divestment.
The first is that it will inevitably hurt investor returns — not true, as Pax, Trillium, Calvert and many others have already proven through environmentally wise investing.
Another is that shareholder activism is better. ExxonMobil memorably gave the lie to that claim last week, announcing that it was “highly unlikely” to stop selling climate-busting oil and gas for decades to come.
This was not only a blunt “get lost” response to activist shareholders. It came at the same time as the new warnings from the UN’s Nobel Prize-winning Intergovernmental Panel on Climate Change. The New York Times said the panel cautioned that “the window is rapidly narrowing to forge new policies that will protect the globe from a future of serious food and water shortages, a drastic sea level rise, increased poverty and disease and other profound risks.”
Another objection to divestment is that it’s complicated and expensive. We heard the same argument from many institutions, including Middlebury College, which opposed South Africa apartheid. Yet the portfolios of the college and other institutions that divested out of South Africa grew to be enormously more profitable after they divested.
Skepticism about fossil fuels isn’t some crazy left-wing idea. President Obama himself has urged Americans to “invest and divest” to take action against global warming.
The Divest-Invest Philanthropy coalition of large foundations announced that its members — representing investment portfolios totaling $1.8 billion — will take their money out of fossil fuels and invest in clean energy.
The president of the pro-development World Bank has said governments and businesses should consider shifting out of fossil fuels, because these investments may be stranded losers as the world moves away from burning coal, oil and natural gas.
So where is the state of Vermont in all this?
UVM leadership has so far refused to act. And a groundbreaking bill to divest the $3.8 billion state pension fund out of fossil fuels failed in a Senate committee this year.
Regrettably, Addison County State Sen. Claire Ayer was part of the 3-2 committee majority that killed the bill. Divestment supporters will be back lobbying for it next year.
State Treasurer Beth Pearce, who so far opposes divestment, heard an earful from divestment supporters at last week’s panel organized by ACORN, the Addison County Relocalization Network.
Pearce is better versed on environmental issues than most of her counterparts in other states. She’s also created a fossil-free fund in which state employees can invest.
But so far, she still buys the discredited argument that it’s risky not to invest in fossil fuel polluters.
As the divestment movement continues to grow, Pearce and other public leaders around the country will be hearing about divestment from many more constituents.
In the face of the increasing planetary peril from climate change, divestment points the way to a safer future for humanity. It’s an idea whose time has come.
Gregory Dennis’s column appears here every other Thursday and is archived on his blog at www.gregdennis.wordpress.com. Email: [email protected]. Twitter: @greengregdennis.
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