More than 200 climate activists brought the annual Yale-Harvard football game to a halt Saturday to protest both universities’ investment in fossil fuels.

Carrying a banner reading “Nobody wins: Yale & Harvard are complicit in climate injustice,” students rushed to the 50-yard line and stalled play until police arrived and began arresting them.

INCREDIBLE to see this video of fans STORMING the field from the stands to join @FossilFreeYale and @DivestHarvard. Our movement is big. We stand united. #NobodyWins so long as our universities stay invested in injustice. https://t.co/kgZ7e7uifp — Divest Harvard (@DivestHarvard) November 23, 2019

At $39.2 billion, Harvard’s endowment is the largest academic fund in the world. It grew 10 percent last year. In 2018, it paid out $1.8 billion in dividends, more than one-third of the university’s operating budget. Yale isn’t far behind, with an endowment of $29.4 billion. Right now, both schools are invested in businesses that contribute to climate change but are unwilling to disclose just how much.

The activists want their universities to fess up to what they’re investing in. And if it’s fossil fuels, they want the fund managers to withdraw those investments. Campaigners have been pushing these Ivy League schools to purge their endowments of fossil fuels for years, but this latest effort may be the largest and strongest yet.

The renewed calls for fossil fuel divestment at Harvard and Yale are part of a worldwide movement to confront the fossil fuel industry’s finances, slowly chipping away at the pool of investors willing to bet on coal, oil, and natural gas. Earlier this year, Sen. Jeff Merkley (D-OR) introduced a bill to allow federal employees to divest their retirement accounts from fossil fuels.

Divestment is just one front in a recent global surge in climate change activism, much of it led by youth. Children have launched a series of school strikes to demand action on climate change. Young people in the United States are suing the federal government for profiting off of the fossil fuels that cause climate change. The Extinction Rebellion protest that shut down parts of London for weeks this year succeeded in getting the UK Parliament to declare a climate change emergency. Advocates are pushing lawmakers and presidential candidates to endorse ambitious proposals like the Green New Deal or offer their own alternatives.

The divestment movement stands out just for the sheer number of points activists have put on the board. To date, activists say they have secured more than $11 trillion in divestment commitments from more than 1,000 philanthropies, schools, pension funds, and other institutions. In September, the University of California system announced that it would divest from fossil fuels.

But not every institution has been persuaded. Harvard and Yale thus far have been resistant, arguing that divesting is a political action they want to avoid, that fossil fuels will remain an important part of the global economy for years, and that endowments do a better job of changing corporate behavior as investors.

Campaigners insist it’s not just about the melting ice caps or rising sea levels; it’s about solving the fundamental inequity that the people who contributed least to climate change stand to suffer the most — the young, the poor, the marginalized.

“Divestment is a tactic,” said Ilana Cohen, a student in Harvard’s class of 2022 and lead coordinator of the Fossil Free Divest Harvard campaign at Harvard Undergrads for Environmental Justice. “Justice is our goal. That requires a larger conversation.”

And the fact that Yale and Harvard — schools that pride themselves on training the next generation of elite society, that backs world-leading climate and clean energy research — pays for this work by betting on companies that profit off the destruction of the planet is unconscionable.

“It is immoral for Harvard to be profiting from investments that cause irreversible harm,” said Caren Solomon, an associate professor at Harvard Medical School who also attended Harvard as an undergrad.

The question now is how long until divestment’s big dollar numbers start pushing carbon dioxide emissions down. Money talks. So how much does it really say when it walks away?

There’s still money to be made in fossil fuels

Scientists warned last year that the window to limit warming this century to 1.5 degrees Celsius is rapidly closing. Yet greenhouse gas emissions from burning coal, oil, and natural gas are on the rise. Even the United States, which experienced declining emissions for years, saw an uptick in 2018.

Clearly, there remains a large and growing market for fossil fuels. They remain vital for the global economy and a critical raw material for products like plastics. Much of the technological progress humanity has made to date can be traced to cheap, abundant resources like coal, oil, and natural gas. Our current trajectory has us consuming even more.

“The day after, if we were to divest, we’re still going to turn on the lights,” said Harvard President Lawrence Bacow at a forum on fossil fuel divestment. “We would still be dependent on fossil fuels.”

But Harvard and similar institutions have argued that it’s not about the money. Rather, they argue that divesting from fossil fuels would politicize their portfolios, and they have better ways to fight climate change.

“The University’s position, as it has stated previously, is that it should not use the endowment to achieve political ends, or particular policy ends,” wrote a Harvard spokesman in an email. “Harvard is committed to influencing public policy on climate change through scholarship and research.”

Retaining stakes in fossil fuel companies also gives the school leverage to shape corporate actions, but so far these efforts have been tepid. In the latest report from its Corporation Committee on Shareholder Responsibility, the Harvard Management Corporation highlighted how they are pressuring Chevron, one of the world’s largest oil companies. They considered a proposal that asked Chevron to report on how it could “could adapt its business model to align with a decarbonizing economy.”

The advisory committee, a 12-member group made up of faculty, students, and alumni, voted uniformly to abstain from the proposal.

“They pointed to the example of tobacco companies that have greatly diversified their businesses, and noted that Chevron might be wise to plan a similar strategy in the coming years,” according to the report. “Nevertheless, in recommending abstention for the proposal, committee members affirmed that such a shift in strategy is properly a business decision for the company rather than a matter for shareholder input.”

Chevron, not surprisingly, has also made the case that retaining investments in the company is the best way to push them to pursue cleaner energy.

“Chevron is committed to fostering long-term relationships with shareholders and being responsive to their input on important environmental, social, and governance issues like climate change,” a Chevron spokesperson said in an email. “These conversations have reaffirmed our commitment to be the low cost, most efficient producer of ever-cleaner energy to meet the world’s growing energy demand.”

Yale University didn’t respond to a request for comment. However, David Swensen, the school’s chief investment officer, said last year he doesn’t support fully divesting from fossil fuels on moral grounds.

“If we stopped producing fossil fuels today we would all die. We wouldn’t have food. We wouldn’t have transportation. We wouldn’t have heat. We wouldn’t have air conditioning. We wouldn’t have clothes,” he said. “It’s very nice to protest the fact that we have fossil fuel producers in the portfolio, but the real problem is the consumption, and every one of us in the room is a consumer. I guess it’s a little bit harder to look in the mirror and say ‘I’m part of the problem’ as opposed to pointing the finger.”

Divestment campaigners counter that not being political is, in fact, political. It’s a statement that not only is the status quo acceptable, it’s beneficial. An investment is an active bet on future growth and by leaving such holdings in place, investors like Yale and Harvard are affirming how they want to the world to be. And a massive global problem like climate change can’t be solved with just research and development — it demands a drastic change in business and finance, guided by a pursuit of justice.

Divestment lets climate activists punch above their weight

Most of the world’s carbon dioxide emissions can be traced to a handful of groups. According to the Carbon Majors Database, 71 percent of global greenhouse gas emissions since 1988 can be traced back to just 100 fossil fuel companies.

And much of the world’s wealth is concentrated in a few hands — 26 billionaires control as much wealth as the bottom half of the world’s population

So divestment serves as a mechanism that lets activists go toe-to-toe with the giants propagating the status quo.

Enormous enormous divestment win. That's a lot of euros! https://t.co/qVkKx7ZXK6 — Bill McKibben (@billmckibben) March 26, 2019

The logic behind divestment is simple: follow the money and cut it off at its source. Apply pressure at the right points, and you can make outsized gains. That’s why institutional investors like investment banks, pension funds, and endowments that hold some the largest slices of fossil fuel companies make the ripest targets.

While a handful of people are gatekeepers of these vast reserves of money, they are accountable to their constituencies. In the case of a sovereign wealth fund like Norway’s $1 trillion oil fund, it’s voters. For a pension fund, it’s the employees that pay into it. And for a university’s endowment, it’s students, donors, and alumni.

Climate change divestment campaigners are slowly shifting the business case for fossil fuels

Perhaps the most famous application of divestment was the campaign to name and shame companies with financial ties to the apartheid government of South Africa. The campaign started in the 1960s and gradually spread around the world. In the 1980s, the campaign to divest from South Africa surged across college campuses. Former President Obama said the movement was his first brush with political activism.

The apartheid regime eventually fell in 1994. Some economists have questioned whether divestment actually had an impact on the South African economy. But there’s no question that it drew global attention to the cause and attached a stigma to working for and investing in South Africa, pressuring and isolating its government.

Anti-apartheid campaigner Desmond Tutu has drawn a direct lineage between divesting in apartheid and divesting in fossil fuels.

“People of conscience need to break their ties with corporations financing the injustice of climate change,” he wrote in a 2014 column. “We cannot necessarily bankrupt the fossil fuel industry. But we can take steps to reduce its political clout, and hold those who rake in the profits accountable for cleaning up the mess.”

In the context of climate change, campaigners want big investors to stop buying new stock in fossil fuel companies and phase out their existing equities, stocks, and bonds in these businesses.

The first institutional divestment from fossil fuels likely came in 2012 when Unity College, a 700-student school in rural Maine, announced its trustees were selling off their shares in coal, oil, and gas companies.

Since then, activists have secured trillions of dollars in fossil fuel divestment commitments, making the campaign one of the fastest-growing movements ever.

Bill McKibben, a pioneering fossil fuel divestment campaigner, founder of 350.org, and a Harvard alum, said that there’s a two-pronged argument here. In addition to the immorality of profiting off the destruction of the planet, the tide is turning against fossil fuels in the market, making them a poor investment.

Several countries have already committed to ending their use of fossil fuels altogether. Cleaner sources of energy are already outcompeting coal, oil, and natural gas in some markets. Renewable energy technology is only getting better and costs are continuing to fall.

All that points to a future with fewer fossil fuels and implies that the current valuations of giants like Exxon Mobil, which has a market capitalization of more than $320 billion, may be overstated.

“We’ve succeeded in getting across the point we started out to show in 2012: the fossil fuel industry has far more reserves than it can ever hope to burn,” McKibben wrote in an email. That means that many of the vast oil and gas fields that have yet to be tapped may never be tapped. As regulations on climate change come into effect and cleaner energy becomes cheaper, these reserves may become stranded assets as the market makes it unprofitable to harness them.

With these factors at play, fossil fuels become less lucrative investments. “Since fossil fuel faces a daunting challenge from superior technology it has underperformed the rest of the market badly,” McKibben said. “So, for instance, New York State pensioners are $19,000 apiece poorer than they would be had the state divested.”

Fossil fuel companies themselves are also becoming alarmed about the success of the divestment movement. In a 2017 annual report, Royal Dutch Shell warned that the campaign could have “a material adverse effect on the price of our securities and our ability to access equity capital markets.”

And with a smaller pool of investors, it’s likely that fossil fuel companies would struggle to finance new drilling rigs, refineries, or pipelines.

It’s not just about solving an environmental problem. Divestment is about correcting a catastrophic injustice.

For investors, whether or not fossil fuels will remain profitable may end up being the biggest factor a decision to divest. Within the financial sector, there’s a growing push for environmental, social, and governance (ESG) criteria to be included in evaluating investments. The idea is that ethical concerns, especially around the environment, do present a material investment risk. That could come in the form of exacerbated extreme weather harms to business operations or a damaged reputation for relying on dirty energy.

However, it’s the moral case that’s motivating activists, particularly students.

And at some of the most elite institutions in the world, students see a yawning gap between the world they want to see and the world that universities are betting on.

Activists say that to truly fight climate change, schools need to detach their fortunes from the success and growth of dirty energy. But they also have to take active steps to address the fundamental inequities of climate change, that the people who contributed least to the problem stand to suffer the most.

That could mean seeking out investments in communities vulnerable to problems like sea level rise. Or it could mean targeting development in historically marginalized areas. Or making sure that solar panels are not just luxury accoutrements but a meaningful way to help people with low incomes pay their power bills.

At both Harvard and Yale, campaigners have tied their fossil fuel divestment push to debt relief for Puerto Rico. The island was devastated by Hurricane Maria in 2017 and much of the destruction was worsened by rising ocean and air temperatures. But Yale holds debt bonds in the island’s economy.

“Puerto Rico’s debt crisis is a major climate justice issue,” said Nora Heaphy, a Yale student in the class of 2021 and a divestment activist. “[Yale] is actually suing Puerto Rico to be repaid before any rebuilding can take place.”

So divestment is not simply about the future impacts of climate change; it’s about the inequities already here.

Divestment isn’t moving the needle — yet — but it’s changing the conversation

Despite gains in divestment, global greenhouse gas emissions continue to rise. Some fossil fuel companies are indeed struggling, particularly coal mining firms. But others are still making tons of money. Exxon Mobil generated $279 billion in revenue in 2018. Shell made $388.4 billion. BP made $303.7 billion. Aramco made $355.9 billion.

Analysts agree that the $8 trillion that’s been divested or pledged to withdraw to date from fossil fuels is still a small slice of the overall share of the $100 trillion-plus global capital market. “At present, [divestment] has had a pretty minimal impact on the industry,” said Richard Taylor, an oil and gas industry analyst at Fitch Solutions.

However, environmental, social, and governance criteria demanded by investors are forcing fossil fuel companies to confront the impact of their contributions to climate change. That in turn is changing how they talk about the environment and making them more proactive about the regulatory risks and the need to come up with solutions.

Still, the overall market impacts are minimal because the amount of money floating around right now is so vast and the inertia is immense. “They aren’t changing their behavior, that’s for sure,” said John Thieroff at Moody’s Investors Service. “Like it or not, we’re going to continue to consume oil and gas for while. There’s no switch that’s going to get flipped in the next year or two that’s going to let us walk away from oil.”

However, divestment is definitely affecting the reputations of fossil fuel companies and their investors. Public opinion is already slanted against fossil fuels and in favor of cleaner energy. Companies like Exxon and Shell have responded by publicly backing proposals to tax carbon dioxide emissions.

There’s now a nascent movement within some major companies for divestment. More than 7,000 Amazon employees signed a letter this year to adopt a company-wide plan to deal with climate change and to sever its ties with oil and gas companies.

This is a BIG WIN for the 7,300 Amazon employees asking the company to adopt our climate plan shareholder resolution!



The two largest proxy advisors to institutional investors are siding with us!



It's time for Amazon to stand with employees... and now its investors! https://t.co/6C8t5v1Nn0 — Emily Cunningham (@emahlee) May 10, 2019

“These things are slow-moving,” said Taylor. “These are generation-long movements and dynamics.”

But the world does not have the luxury of waiting. Scientists have warned that the world would have to cut greenhouse gas emissions in half by as soon as 2030 if the aim is to limit warming to just 1.5 degrees Celsius this century. So one of our defining actions on climate change where we invest: a future that continues on our current trajectory or one that’s cleaner, greener, and more just.

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