Since the Student Government climate change referendum passed last spring, Stop Funding Climate Change (SFCC) hasn’t been in the media much, but we’re back—in the public eye, that is—and we’ve got big plans for the remainder of the school year.
That referendum, for which 70 percent of the student body voted yes, asked students, “Should the University shift its investment strategy to account for the environmental impact of oil, gas, and coal used by the companies it invests in?”
Only a week later, on May 7, 2013, University President Robert Zimmer told students at a question and answer session that he wanted to hear a more concrete argument in favor of divestment before considering the issue further.
Well, that time has come. On Thursday, February 27, we will be releasing our Divestment Report that lays out arguments for fossil fuel divestment in four categories: scientific, financial, institutional, and moral. The report will also suggest potential reinvestments that are environmentally friendly.
As a branch of the 350.org national divestment movement, SFCC’s divestment campaign hopes to persuade the University to do two things: first, freeze any new investments in the 200 companies that Carbon Tracker ranks as having the largest oil and gas reserves. And second, divest from direct ownership and any comingled funds that include fossil fuel private equities and corporate bonds within five years.
We’re pushing the University to take such action because climate change is an urgent problem. It’s 2014, and many scientists agree that humans have contributed to global warming. They’ve also agreed that an increase in the earth’s overall temperature of just two degrees Celsius will make the planet unlivable. The average temperature has already increased by about 0.8 degrees, and if humans burn just one fifth of the known coal, oil, and gas reserves, we’ll reach the two-degree mark. Something must be done to limit such harmful CO2 emissions and temperature rise.
The numbers don’t lie; they motivate. We argue that divesting would spark other institutions with endowments over $1 billion (ours is $6.67 billion) to follow suit, causing a snowball effect. Thus far, no academic institution that has divested—out of nine—has had an endowment over $1 billion.
Companies such as Exxon Mobil (41.03 gigatons CO2) and BP (34.6 gt CO2) are some of the worst offenders. These companies allow everyone access to coal, oil, and gas, facilitating the destruction of our planet, while continuing to look for more reserves. Although our society currently relies on burning fossil fuels, we should transition as quickly as possible to renewable energy options, and that requires massive investments in the right kind of energy.
For those students worried that divestment will diminish their institution’s ability to fund research, pay professors, or build lavish new dorms, don’t fret. Aperio Group LLC published a report last year stating that divesting from fossil fuel companies would have negligible effects on portfolios. Divesting from the “Filthy 15”—a list similar to the top 15 of the Carbon 200—would increase a portfolio’s absolute risk by 0.0006 percent, and divestment from a more comprehensive list of companies would only increase absolute portfolio risk by 0.01 percent. Based on that research, fossil fuel divestment would have a minimal effect on the University’s investment returns (three to four percent of which are in fossil fuel companies), if any.
On the institutional side of the argument, yes, a university exists to educate—and divestment won’t hamper the institution’s financial ability to do so. The University of Chicago especially doesn’t like to deal with social, political, or environmental issues: The 1967 Kalven Report states that the University will not take any stance whatsoever on political issues in order to most effectively foster the harvesting of all ranges of ideas. However, making a decision to either divest or keep all fossil fuel investments is taking a stance, one way or the other, so it’s impossible to remain neutral.
All these arguments are expounded upon in the SFCC Divestment Report that will be released on February 27. Additionally, we are holding an event with free food, copies of the report, and student speakers at 4 p.m. that day in the Reynolds Club South Lounge. This event will culminate with the delivery of the report to President Zimmer’s office. Lastly, look out for a panel event on institutional fossil fuel divestment, planned for early May.
Imagine a world in which universities divest (without losing any money), and oil and gas companies are socially stigmatized and influenced to shift their focus to renewable energy, or legislation caused by institutional stances forces them to do so. This is the fast track to renewable energy that our planet needs.
In time, the administration will be forced to declare a position. Will it take the shortsighted one with the easier, normative political statement, or the environmentally—and socially—intelligent one?
Sam Zacher is a second-year in the College majoring in environmental studies and economics.
Editor's Note: Sam Zacher is a Maroon Associate Sports Editor.