Update: Three years after writing this post, with the climate crisis deepening, I’ve changed my view and think anything people can do to fight the fossil status quo, however symbolic (like divestment), is worth doing.

Today I went to a convocation ceremony at Williams College in Massachusetts, where the featured speaker encouraged students to do everything they could to fight global warming, including supporting the global movement to divest from fossil fuel companies.

I hadn’t heard much about this movement, but instinctively dismissed it as ineffective advocacy that makes people feel good while really accomplishing little. A friend suggested I do some research, however, so I did. What I found reinforced my perception that it’s mostly a symbolic gesture. But in a few targeted cases, like the coal industry, it may have value.

Here’s why I think trying to get institutions to divest from fossil fuel is ineffective:

1) It has little financial impact, and thus applies no real pressure.

– The biggest fossil fuel companies in the world are state owned, so you can’t divest from them.

– Most stocks are held in broad portfolio funds rather than directly, so you’d have to sell the whole market (or large segments of it) to divest from all of fossil fuel.

– The globe is awash in capital, so these companies can easily replace whatever small amount is withdrawn from them. Other investors will step in to replace your investment, so nothing changes.

– Distressed energy companies may be an exception; for example those who took on too much debt and can’t service it because oil prices are in an all-time low.

2) It doesn’t seem to be working, unlike prior divestiture campaigns (e.g. South Africa).

– People don’t agree on how to do it. Divest from all energy companies, or just coal companies? Or just companies that cause egregious environmental damage, as the Bill and Melinda Gates foundation did by divesting from Shell?

– It’s not getting broad attention, perhaps because we all buy from these fossil fuel companies, and are addicted and unwilling to give up their products. Like cars, air conditioning, plane trips and the juice that powers our laptops and smart phones. By contrast, most of us were happy to go without goods related to South Africa in the 1980s, or big tobacco, in order to send a message.

3) It’s not targeting the tangible beating heart of the problem in my view.

The best thing college students could do, I believe, is to invest their careers in building solutions to the problem of climate change and global sustainability. Whether that means going to work on new energy grid technology or organic farming or more efficient transportation, or one of hundreds of ways to invent positive world-changing solutions.

There’s definitely value in focusing public attention to create change. But there are stronger opportunities to catalyze public outrage. Why not attack the weak US government CAFE standards that allow car companies to keep cranking out giant fuel guzzling trucks and SUVs? Or focus on the demand/consumption side of the equation, shining a spotlight on how businesses, and the 1%, or even the 20%, egregiously and needlessly waste energy because they can afford to do so?

The divestiture movement has picked up some momentum in the past couple of years as campuses have signed on. And it’s trying to broaden from university endowments to larger pension funds. But so far it’s mostly smaller institutions participating, with the exception of Stanford and CALPERS divesting from coal companies.

Attract attention on campus is good, because global warming will literally be a matter of life or death for today’s students. But let’s not kid ourselves… what matters for climate change is what actually happens in the real world, at scale, right now or very soon. We’ve satisfied ourselves with indirect, symbolic, lets–protest–and-feel-better efforts for too many decades.

What’s needed now is something more raw, and direct, than a divestiture campaign. In my view, that’s what should be getting talked about by speakers at convocation ceremonies.

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