On June 26th, Pitt’s board of trustees announced that it will form a committee to study whether the University should divest its $4.3 billion dollar endowment from fossil fuel investments. The move comes after years of pressure from student groups like Fossil Free Pitt Coalition which held a week-long sit-in in the Cathedral of Learning last February.
The group said in a statement that it is eager to hear more specifics and would like trustees with ties to the fossil fuel industry to abstain from any vote involving fossil fuel investments.
Pitt’s announcement comes on the heels of a slew of other universities – Harvard, Brown, Cornell, Oxford – announcing that they will pull their investments from the fossil fuel industry. But is all of this too little, too late?
Bill McKibben is the author of “The End of Nature” and co-founder of 350.org. He recently spoke with Living on Earth host Steve Curwood about what the divestment movement has achieved so far and how it all began.
LISTEN TO THE CONVERSATION:
Steve Curwood: So let’s go back to 2012, when 350.org really launches “Go Fossil Free.“
Bill McKibben: Yeah, I mean, at the time when it started, it was very small affair. I can remember the day that the very first institution, a college in rural Maine called Unity College with an endowment of $8 million, announced that it was divesting from fossil fuel and we were over the moon. We didn’t know that it would grow into $14 trillion worth of endowments and portfolios that have divested in part or in whole, or that it would reach the point where, as that stock guy, Jim Cramer said on TV in January, ‘no one should invest in Big Oil anymore. Divestment campaigns have just gotten too big. You can’t make money anymore out of oil.
SC: Should I say congratulations?
BM: Well, I gotta say, that made me happy to hear. Because really, it’s been the political power of the fossil fuel industry that’s kept us locked into our current status quo. Their business model literally depends on us not taking climate change seriously. For years, really, for decades, they got away with it. They knew everything there was to know about climate change back in the 1980s and just straight up lied about it. That disinformation campaign has cost us what may turn out to be the crucial 30 years. But, at least now, people are managing to fight back.
“Not only has it been a question of money, it’s also been a question of many of the most important institutions on earth being forced by activists to break ties with this industry.”
SC: So what do you think enabled the fossil fuel divestment movement to grow despite the uphill battle that it’s faced?
BM: Well, I think there were a couple of things. One was that the kind of math around this became very clear. The divestment movement launched with an analysis, some data, showing that the fossil fuel industry had five times as much carbon in its reserves as any scientists thought we could safely burn. Once we had that data in hand, everybody could see that if the fossil fuel industry’s business plan carried out as they wanted it to, there was no drama, no mystery to this story, the final chapter was written.
I think the other thing though, and maybe most important, was that it let everybody get in the fight. Now, most people don’t have a pipeline going through their backyard and they don’t live next to a coal mine. But everybody is in proximity to a pile of money someplace — a university endowment to city pension fund, a church retirement fund — and those were precisely where people mobilized.
You know, as I say, it started at one small college in Maine, but by last year, [we had] the University of California system divesting $126 billion pension and endowment funds or the Republic of Ireland divesting all its public accounts or the city of New York divesting its $200 billion pension fund.
So not only has it been a question of money, it’s also been a question of many of the most important institutions on earth being forced by activists to break ties with this industry, to say ‘we no longer want to participate with an industry that’s wrecking the planet.’
BM: Well, an awful lot of it was young people. That’s who’s been at the forefront of the climate movement all along. They were in college, a lot of them working hard on fossil fuel divestment. And really, Steve, one of the best outcomes of this whole thing is that those exact same people, when they graduated from college and wanted to keep working, went on to found the Sunrise Movement, and they’re the ones who brought us the Green New Deal.
“The institutions that divested from fossil fuel really did well financially because the fossil fuel industry has been the worst performing part of our economy.”
So for instance, Varshini Prakash, who is the executive director of the Sunrise Movement, and really the lead spokesperson, I think, for the Green New Deal, she was the same young woman who divested the University of Massachusetts during her undergraduate years. One of its many uses was as a terrific training ground for some of the best activists in the country.
SC: Now, Bill, tell us what exactly does divestment look like? What exactly does a university or a pension fund or a foundation need to do to cleanse itself from investments in the fossil fuel industry?
BM: Well, you know, at first it was a little bit hard for places to do it because investment advisors didn’t know how to do it. They said, ‘oh, it’s impossible, all our funds are mingled, you’re in index funds, it’s so hard to get out.’
But relatively quickly, all kinds of funds sprung up that made it easy for people to get out of fossil fuel. So really, I mean, all it takes is your investment advisors making a committed decision to sell those stocks over the course of a few years.
One of the things that made it much easier was that, pretty soon, there was not only a strong moral case, there was also a strong financial case. The institutions that divested from fossil fuel really did well financially because the fossil fuel industry has been the worst performing part of our economy. For good reason. I mean, A: their product is destroying the planet. So that attracts regulatory pressure. And B: the sun and wind people have figured out how to provide the same service, energy, just cleaner and cheaper.
So it’s a terrible business to be in. Even if you didn’t care about destroying the planet, you’d want to get out of it because it just loses money.
SC: So how has the divestment movement played out for the fossil fuel industry?
BM: Well, they’ve hated it from the beginning. And it turns out, it wasn’t just, what we kind of thought at the start, that we were taking away their social license. That’s been very effective. There’s nothing that’s been more effective in spreading the news that their business model equals disaster for the Earth. But it has reached a size and scale where it’s begun to cause them real financial problems.
I told you before that Jim Cramer had said on his stock picking program that this was the reason that big oil was no longer a good investment. Shell said in their annual report last year, that [divestment] did become a material risk to their business, which is good since Shell’s business is a material risk to the planet.
When the coal industry went begging to Congress for a bailout at the beginning of the COVID crisis, they listed divestment as one of the reasons they couldn’t raise money on their own.
SC: How interesting did you find it during these discussions in universities, that that economic argument that these endowments were at risk because of what was happening with fossil fuels for many years, seem to fall on deaf ears?
BM: Well, here’s the interesting thing about universities in particular. You know, their boards of trustees, if you go back 40 or 50 years, they were mostly made up of kind of eminent people with the occasional rich guy there, you know, in order to write some checks.
“Harvard has long since forfeited the idea that they’re going to be a leader on any of this stuff, and now they’re not even willing to be a follower.”
But now, they’re mostly made up of just rich people. If you look at where the money is in our strange twisted economy, that mostly means people out of Wall Street. So it was hard for them to deal with the fact that people were calling to account the notion that investment could be a real force for evil on this planet.
It took them a while to wrap their heads around that. In fact, it took their students shouting at them over and over and over again before it finally began to get through. It hasn’t gotten through everywhere. I mean, there are universities, and Harvard’s probably the best example, that just obstinately refused to do this. I think basically, because they’re worried that some ancient old alum sitting in his overstuffed leather chair is going to read a nasty article about it in the Wall Street Journal and, you know, give one less squash court in his will or something.
SC: Why is Harvard’s recent carbon neutrality by 2050 announcement controversial for many activists? And how do you personally feel about their decision? And of course, I should mention that in full disclosure, it’s kind of personal for both of us as we spent our undergrad years there.
BM: I don’t think that Harvard’s announcement’s controversial for activists. I don’t know anybody who’s anything but disgusted by it. I mean, look, Harvard has long since forfeited the idea that they’re going to be a leader on any of this stuff. And now they’re not even willing to be a follower.
Announcing that you’re going to do something in 2050 at this point, Steve, you know the science of all of this well enough to know that’s not very helpful. The game will be decided long before then. We need people stepping up and acting now. I gotta say Harvard has been a tremendous disappointment, but whatever. The rest of the world is going on around them.
The other Ivy’s are, many of them, busily divesting. The biggest universities on the planet are divesting like the [University of California] system. The same day that Harvard made its announcement that it was going to wait until 2050, the only institution with more prestige and status, Oxford, said ‘we’re all in with fossil fuel divestment.’ So I’ll take that.
SC: So what are the rationales that universities have given for their decisions once they do decide to divest from fossil fuels?
BM: Well, once they make the decision, they’ve been able to join with students and saying, ‘we very much want to take a stand about climate change. I mean, we’re in the business of preparing students for the future.’ That’s a wonderful business to be in. But that implies not only that you prepare the students well, but that there’s a future for them to exist in.
It doesn’t make sense to be training people to go off and do a thousand interesting, wonderful careers, and at the same time, building a world where all those students are going to be doing in 40 years is some kind of, you know, emergency response because that’s all we’re going to be doing as a society.
So I think it’s really liberating for institutions to say, ‘you know what, we’re on the same side as our students on this. We’ve understood that they have moral authority here, because they’re going to be dealing with this long after we trustees are in the grave.’
SC: So what’s next for the fossil fuel divestment movement, do you think?
BM: Well, what’s happening is that not only is it continuing to grow in this sort of selling stock from the fossil fuel industry, but it’s kind of morphed in the last year or two into a big assault on the financial institutions — banks, asset managers, insurance companies — that are their financial lifeline.
We’re calling this, “Stop the Money Pipeline.” That’s a big coalition of environmental groups from the Sierra Club and 350 to many, many, many groups. A lot of this work pioneered by Indigenous groups, especially in the wake of the Dakota Access Pipeline fight. It’s still early days in a way, but it’s been successful much more rapidly even than the divestment work, because it builds on it.
In the course of the winter, BlackRock, the biggest asset manager on Earth, really the biggest box of money on planet Earth, their CEO, after a big pressure campaign, came out and said, ‘this is going to be the issue that drives all our financial thinking going forward.’
Indeed, in this spring’s shareholder season, BlackRock at least began to take some votes to force companies of which they own large percentages to start wising up about climate. So this is the next part of that work.
This interview was produced by Kori Suzuki. You can find the Living on Earth podcast on your favorite podcast app.