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ERIC Number: EJ1053623
Record Type: Journal
Publication Date: 2015-Feb-16
Pages: N/A
Abstractor: ERIC
Reference Count: N/A
ISBN: N/A
ISSN: ISSN-1938-5978
Divesting from Fossil Fuels Makes Sense Morally… and Financially
Cleveland, Cutler J.; Reibstein, Richard
New England Journal of Higher Education, Feb 2015
Should university endowments divest from fossil fuels? A public discussion of this question has seen some university presidents issuing statements that they would not divest--that investments should not be used for "political action." Many universities hold large endowments that have significant positions in fossil fuel companies or funds that hold fossil fuel assets. Universities consume fossil fuels in most aspects of campus operations. But universities also support most of the research that has identified the existence, nature, and consequences of climate change, and the principal purpose of the university is to educate, particularly the young adults who will live and work in the climate of the future. Arguments for universities to divest from fossil fuels are frequently based on moral grounds. Ignoring the moral issue at the core of the climate challenge presents real peril to the reputation of universities and their standing in society. The costs of climate change stretch across generations due to the long atmospheric lifetimes of greenhouse gases and the inertia in the Earth's climate system, posing the question of what the impacts of today's societies are on the well-being of their children and grandchildren. The poor bear the brunt of the economic and health impacts of climate, a relationship that holds within every nation, and between rich and poor nations. Climate change requires development of the capacity to manage our collective impact on our environment, and universities have a duty to help foster this development. Universities cannot pretend they have no such responsibility without forsaking the role they have historically engendered as trustees of humanity's capacities, values and understanding. But the case for divestment is not limited to moral imperatives. Holding assets in fossil fuel companies, and in companies that are fossil fuel-intensive, poses a significant array of risks for universities that appear on multiple, simultaneous fronts. Taken as a whole, the financial, moral and reputational risks associated with holding assets in fossil fuel companies create a compelling case for divestment, even without considering the rising opportunity costs of not transferring investments to cleaner alternatives. Careful examination of the stated reasons for not divesting shows that they do not hold water. Instead of viewing the choice as "business as usual" or "disinvest," universities should engage with other universal owners-asset owners who recognize that their portfolios are diversified across multiple industries and asset classes--and learn how to invest responsibly.
New England Board of Higher Education. 45 Temple Place, Boston, MA 02111. Tel: 617-357-9620; Fax: 617-338-1577; e-mail: info@nebhe.org; Web site: http://www.nebhe.org
Publication Type: Journal Articles; Reports - Evaluative
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A