This week, Stanford undergraduates will vote on a referendum calling on the University to divest its endowment from the fossil fuel industry. Representatives of the undergraduate student body on the ASSU Senate have already voted by a wide margin to support divestment, but this is a chance for all students to make their voices heard.
Stanford students are not alone in supporting divestment. Harvard passed a similar referendum with 72 percent support, Berkeley with 73 percent and Yale with 83 percent. Dozens of other schools have done the same. Nine schools, mostly small liberal arts colleges, have already committed to divest.
Colleges and universities have a critical role to play in creating investing norms, but there are many other institutions considering or enacting divestment. More than 20 cities, including Seattle, have committed to divest their pension funds from fossil fuel companies. For many religious institutions, divestment has served as a strong moral statement, and many foundations have too recognized the value of divesting. In fact, this January, 17 philanthropic foundations holding $1.8 billion in assets joined together to pull their investments out of the fossil fuel industry.
Divestment is also being considered and promoted on a much larger scale. Several large banks, including Deutsche Bank and Rabobank, have already begun eliminating their most carbon-intensive investments, and the U.K. Parliament recently warned the Bank of England that fossil fuel companies may be massively overvalued. Investment leaders such as Stanford trustee Tom Steyer, who until recently led one of the world’s most successful hedge funds, and Mindy Lubber, director of the $11 trillion Investor Network on Climate Risk, have touted both the moral and financial benefits of divesting.
Even those who have historically benefited greatly from fossil fuel extraction are recognizing that fossil fuels may no longer be the right investment. Norway is currently studying the possibility of divesting its $840 billion sovereign wealth fund, the world’s largest sovereign fund, and has already created requirements for investment in renewable energy.
Despite all of this momentum toward divestment from fossil fuels, no major U.S. university has yet committed to divest. An important reason for this lack of institutional courage is simply that it is difficult to be the first. While a growing body of research shows that a strong fossil-free portfolio is possible, the logistics may be a challenge for the first major university to divest, and administrators are hesitant to break with their peer institutions.
Stanford must not be hindered by the inertia of doing things the way they have always been done, nor by the fear of being different from other top universities. Stanford prides itself on being a leader and an innovator, and now is a time to lead. The fact that other universities have yet to divest gives Stanford an opportunity, not only to be first, but to spark a transformation. If Stanford commits to divesting from fossil fuels, it will clear the way for dozens or hundreds of other universities to do the same.
According to researchers at Oxford, every previous divestment movement, including those against Apartheid South Africa, tobacco companies and companies supporting genocide in Darfur, has been successful in motivating restrictive legislation. If Stanford can lead a movement that drives the U.S. to implement strong climate policies, we will have taken a significant and unprecedented step toward addressing the challenge of our time.
Graham Provost ’13, M.S. ’14
Administration Coordinator, Fossil Free Stanford
Contact Graham Provost at email@example.com.