Fossil fuel divestment – The role of universities in combating climate change

by Ellie Crone

Flash floods have become just one example of the countless catastrophes exacerbated by climate change. These floods, caused by record-breaking rains, have led to widespread destruction and loss of lives. Such was the case with the floods that swept across Kentucky1 in July 2022, killing at least 38 people, and those that hit Tennessee2 in August 2021, killing about 20 people.

This flooding is just an indication of what’s to come as the earth’s climate continues to destabilize and communities across the globe endure extreme weather, higher temperatures, and rising sea levels. Despite the unwinding of disaster after disaster, a powerful tool to address the climate crisis remains underutilized: universities divesting fossil fuel stocks from their investment portfolios.

Fossil fuel divestment is the process of selling stocks, bonds, funds, and other investments in the fossil fuel industry, including oil, coal, and gas companies. While fossil fuel divestment has been a growing movement in recent years, divestment itself is not a new concept. Demanding divestment has been an effective tool used by activists for decades. For instance, in the 1970s and 1980s, organizers fought against apartheid by pressuring colleges to stop investing in the South African government and companies with ties to South Africa.3

The main premise of fossil fuel divestment is that if universities remove the portion of their endowment that is invested in fossil fuel companies, those companies will be financially and socially damaged, especially if divestment occurs on a large scale.4 According to Forbes magazine, “Divestment seeks to stigmatize fossil fuels and raise uncertainty around their continued use, to reduce the financial desirability of fossil assets.”5 Furthermore, if universities reinvest their money in clean energy sources, the renewable energy industry will gradually gain financial and political power. The environmental advocacy non-profit describes the fossil fuel divestment campaign as “. . . leveling the playing field for the growth of renewable energy that can transform our economy and provide real climate solutions.”6

To an environmentalist, the decision to divest is most likely an easy one. It is an established fact that burning fossil fuels releases planet-warming greenhouse gas emissions that directly contribute to climate change. Therefore, the clear environmentally-friendly choice for universities is divestment. So why do divestment activists often receive immense push-back from universities?

There are a few major arguments both for and against fossil fuel divestment, with experts weighing in on both sides of the issue. Some economists and university leaders argue that endowments must remain diversified and should be invested in the trillion-dollar fossil fuel industry, as a university’s investments help fund higher education for countless students.7

However, the financial returns of divestment can often be higher than the losses, as renewable energy is a more sustainable investment than fossil fuels in the long run and energy sources are becoming economically competitive with fossil fuels, leading to stranded assets. From 2016 to 2021, “. . . the market has gone up at an annual rate of 16 percent, but the oil and gas sector has fallen at an annual rate of 3 percent,” according to climate activist Bill McKibben.8 He continues, “Now many investors are putting their money into clean energy, where returns have risen by an annual rate of 22 percent over the same period.”

Opponents of divestment also argue that other methods will lead to more sustainable universities, including decarbonization efforts and shareholder engagement with fossil fuel companies, yet proponents claim that these actions, especially shareholder engagement, do not “. . . lead to change on the scale and in the timeframe necessary” for the climate crisis.9 Another strong case against divestment is that it does not directly affect greenhouse gas emissions; instead, it simply transfers stock ownership.10

Nonetheless, it can be argued that divestment on a large scale will negatively impact the fossil fuel industry, and even if divestment is merely a symbolic act for the university, educational institutions must take the moral high ground and become leaders for sustainable change. Finally, there is disagreement over the proper extent that universities can stigmatize companies and pursue political decisions regarding the endowment on behalf of the university.

The fossil fuel divestment movement has seen successes in universities across the United States. In the fall of 2012, Unity College in Unity, Maine, was the first institution of higher learning in the U.S. to fully divest from fossil fuel-related companies.11 Nine years later, student organizers at Harvard University experienced a huge victory when they succeeded in convincing the university to divest fossil fuels from its endowment, the largest in the world.

Throughout the past decade, multiple other top universities in the U.S. have committed to phasing out fossil fuel holdings, including Columbia University, Brown University, Georgetown University, the University of Michigan, and the University of California. Student groups at these institutions advocated for divestment and pressured their administrations, ultimately leading to success for those divestment campaigns.

As a rising sophomore at Vanderbilt University, I recognize that the university’s community is already suffering from the burdens of climate change. Although Vanderbilt University’s hometown of Nashville, Tennessee was directly harmed by the flooding in 2021, the school’s $10.9 billion endowment remains invested in fossil fuels.12 In response, I have become an avid proponent of fossil fuel divestment. As a leader in the academic world, I believe that Vanderbilt has the responsibility to seek ethical investments and fully commit to maintaining a sustainable institution.

I currently serve as Advocacy Chair for DivestVU, a student-led fossil fuel divestment organization at Vanderbilt. DivestVU, along with Dores Divest, another divestment group on campus, aim to convince Vanderbilt’s administration to fully divest the university’s endowment from fossil fuel holdings. The work and cooperation of both organizations are extremely critical to the divestment movement. Dores Divest’s protests and disruptive tactics, including a legal complaint the group filed with the state Attorney General, mobilize an impassioned student body and apply pressure on Vanderbilt administration. DivestVU’s research efforts maintain good relations with the administration and allow us to formally meet with the chancellor to present our campaign’s argument, in addition to planning environmental justice events to educate the Vanderbilt community.

We have made significant progress in the Vanderbilt divestment campaign, including the creation of an online petition with thousands of signatures that demands Vanderbilt divest from fossil fuels and the passage of two bills in the Vanderbilt Student Government Senate calling for divestment. Still, our work is far from finished. I am inspired to continue the fight in the coming years and achieve full fossil fuel divestment at Vanderbilt University.

Fossil fuel divestment is a daunting task. If you are a young activist inspired to begin a fossil fuel divestment campaign at your college, here is some guidance on how to get started:

  1. Form an organization. Connect with like-minded individuals who are also passionate about divestment.
  2. Find out who has the deciding power to divest at your university. This may be a Board of Trust or a university president/chancellor. Meet with the administration and present your argument.
  3. Create an online petition that demands your university divests from the fossil fuel industry. Ask students, faculty, alumni, and community members to sign.
  4. Gain support from your student and faculty governments and persuade them to pass a bill supporting divestment. This puts internal pressure on the administration.
  5. Plan peaceful protests and demonstrations to mobilize the school community. You can also organize speaker events and panels to educate the student body.

There are also some changes you can make in your life to minimize your individual contribution to the fossil fuel industry. Here are some steps you can take if you are passionate about divestment and want to do your part in the growing movement:

  1. Divest your retirement account from fossil fuels. offers information about the fossil fuel exposure your funds have.13
  2. If you have a retirement account at work, demand that more fossil fuel free funds are added to your retirement plan. Green Century Funds has created a guide for advocating for a fossil-free retirement plan.14
  3. Volunteer with organizations that focus on climate action or start a fossil fuel divestment campaign yourself. Resources are available for organizing your own campaign.15

Above all else, remember that you are not alone in combating the climate crisis. Environmentalists of all ages are working every day to help create a greener Earth, and your contributions to the environmental movement are supported by millions across the globe. Divestment is only one piece of solving the puzzle that is the climate emergency, but it does get us that much closer to reaching our vision of a sustainable, fossil-free future.

Ellie Crone is a contributing member of the Grassroots Network Climate Emergency Mobilization team. If you have a suggestion for a future topic or are interested in joining the team, please reach out to us at climateemergency[at]sfbaysc[dot]org.

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