In a recent article in New York’s Times-Union, the argument for fossil fuel divestment was made in connection to weather-changing events that have – and allegedly will – affect New York. This call for divestment action is misplaced. Fossil fuel divestment does not affect the environment and it does not reduce carbon emissions.
Instead of proactively making an impact to address environmental concerns, divestiture measures are merely a feel good strategy that does not directly help protect the environment. As a result, pension funds and university endowments are therefore harmed with a lower return of investments for no reason at all. Cities, like San Francisco, and prominent universities have recognized this impasse and have chosen to take other steps to impact the environment without running a risk to funds or endowments.
In April 2016, Stanford University rejected a measure to divest its endowment from fossil fuels arguing that “Stanford’s endowment exists to support the university and its students in perpetuity.” However the Board pointed out that the university is taking significant steps to address climate change through alternative measures rather than divestment, including a new, greenhouse gas-reducing energy system, the use of clean energy, research into climate solutions, energy efficiency in campus buildings, green transportation and more. These proactive measures were all in an effort to reduce carbon emissions, rather than make a symbolic gesture.
Stanford University’s Board of Directors is a good example of understanding the balance of recognizing the responsibility the Board has to grow its endowment by not divesting from strong and secure stocks, while also finding alternatives to reduce the carbon footprint of the university. New York, a state feeling pressure to divest its pension fund from fossil fuels, should take note from cities and universities who recognize the balancing act. As The Times-Union says, New York has an opportunity to “chart a new path forward for our communities,” but should do this in a way that benefits all New Yorkers, not just the social whims of a few.