The Divest UH coalition is asking for divestment from the 200 companies with the world’s largest carbon reserves.
First published in Civil Beat, January 14, 2015
By Brodie Lockard And Joe Mobley
Right at the top of the home page of its website, the University of Hawaii proudly declares it is “Like No Place Else On Earth.” And, judging by what the Regents said at the meeting of the Budget and Finance Committee on Jan. 8, it appears as if they would like to keep it that way. After all, No Place Else On Earth will feel global warming’s effects in so many ways.
The Committee – and several other Regents who joined the meeting — were very receptive to testimony from the Divest UH coalition and other members of the public who want the UH Board of Regents and the Foundation to divest their endowments from fossil fuel companies. Their positive reaction to 18 speakers and 477 pieces of written testimony supporting divestment left all present feeling a sense of optimism and excitement about the will and momentum to act.
And there are many reasons to act. Divestment stigmatizes companies, weakening their political power and eventually leading to laws limiting the carbon pollution that causes global warming.
The Divest UH coalition is asking for divestment from the 200 companies with the world’s largest carbon reserves. They want UH to immediately cease new investment in these stocks and bonds, including commingled funds, and to begin divestment from current holdings, to be completed within five years.
The divestment campaign is growing: 16 colleges and universities have committed thus far. It’s a moral response to a runaway global warming crisis. It makes fiduciary sense as it will keep endowments from losing value when the carbon bubble bursts. It sets an example, and comparatively, it’s a simple, but deeply symbolic step in the direction of addressing the devastating effects of climate change.
Reasons Not to Divest Are Unsound
Let’s look at some of the most often cited reasons NOT to divest:
It is our fiduciary responsibility to maximize return on our endowment. Climate scientists tell us that to avoid catastrophic runaway climate change, 80 percent of known fossil fuel must be left in the ground. So fossil fuel stocks are overvalued by 80 percent. As green technology continues to grow, fossil fuel companies will become less viable and stock prices will fall drastically.
The bubble may have already begun to burst in the last weeks of 2014. Chevron put its plans to drill for oil in the Arctic “on hold indefinitely,” citing “the level of economic uncertainty in the industry.”
Divestment is too complicated. An investment manager’s job is to deal with complicated funds. A manager for whom divestment is too much trouble is not working in an institution’s best interest. FTSE and other major investment providers offer fossil-free options. Even Cambridge Associates, the consulting firm retained by the UH Foundation, now provides them.
Exxon won’t stop drilling because we divest. The energy market is too huge for our money to change stock prices. This is not the point. Politicians won’t all become honest because you vote for a good one. One vote will not decide any election. Yet that does not mean one shouldn’t vote. UH should divest as an example to every other school, and when enough institutions divest, Exxon’s stock price will fall. When legislation eventually passes to restrict carbon pollution, they will stop drilling.
Endowments should not be used to make political statements. Divestment has nothing to do with politics. Academia has a duty to educate both students and society at large on issues of great consequence. Divestment is an educational, financial and moral statement, not a political one. It invigorates and informs the public conversation about the future of energy.
It is hypocritical to boycott an industry that we depend on every day. We don’t depend on fossil fuels willingly. All else being equal, who would run their car on gasoline if they could use electricity from solar panels? Few of us have that choice because the industry has spent billions to make it so. The true hypocrisy is our institutions agreeing that we must transition to a low-carbon world, yet betting against that world with fossil fuel investments.
Institutions should maintain fossil fuel stock so they can engage with corporations and influence their policies. An investor needs only $2,000 of a stock to present a shareholder initiative, the principal method of engagement. The Rockefeller family has met privately with Exxon Mobil for years, trying to influence its environmental and climate change policies, with little effect.
No Valid Reason Not to Divest
Humans are very inventive in justifying their behavior. But this issue is too important to explain away with weak, unfounded rationalizing. There will always be some reason not to divest. But none of them are valid reasons.
All of us who attended the meeting of the UH Regents’ Budget and Finance Committee came away with a strong sense that the Regents are well aware of the commitment they made through the adoption of the Sustainability Policy last year.
It was clear from their plans to appoint a Task Group comprising various stakeholders, that they mean to give the policy teeth, not just through divestment, but through a comprehensive approach to addressing all the ways in which UH can practice what it preaches and teaches. We are encouraged by their vision and commitment, and look forward to Hawaii remaining Like No Place Else On Earth.
About the Authors
Brodie Lockard started the local chapter of 350.org. He is the Hawaii Climate Lead for Organizing for Action and is in the DivestUH leadership group.
Joe Mobley Ph.D. is a professor in the School of Nursing at UH Manoa and former vice chancellor of academic affairs at UH West Oahu. His research area is the behavior of marine mammals, particularly humpback whales, which he has studied primarily in the Hawaiian Islands since 1980.