Boycott and divestment actions don’t work — until they do.
A year later, they succeeding in swaying public opinion. That led to important concessions on pay, working conditions, education, and legal protections.
The anti-apartheid divestment movement dates from the late 1970s. Protests on American college campuses called attention to South Africa’s system that ensured the political, economic and social dominance of the white minority.
Students demanded that universities rid their portfolios of South African investments. By 1985, 55 universities had partially or totally cleaned their endowments of apartheid businesses. Nelson Mandela became the first Black president in 1994.
Divestment action is finally achieving results in the ultimate cause of our time: climate disruption.
Back in 2012 the climate action group 350.org called for divestment in fossil fuels. Co-founder Bill McKibbon reasoned that “publicizing the increasing levels of carbon dioxide would pressure world leaders to address climate change.” They would then proceed with the political, social, and economic actions necessary to reduce CO2 levels.
Unity Environmental University in Maine was the first to take up the challenge. The school’s Board of Trustees voted unanimously in 2012 to divest fully from fossil fuels.
Two years later, Stanford University divested to the tune of $18.7 billion, selling holdings in coal extraction.
Author Naomi Klein named the win, “the most significant victory in the youth climate movement to date.” Students and faculty continue to work for full divestment.
By the end of 2022, more than 100 college campuses including Harvard, Princeton, and Cornell had divested in full or in part from fossil fuel investments.
The faith community’s investments were another early goal for fossil fuel divestment campaigns. McKinnon approached a financial executive with the Anglican Church in London in 2013.
“We were encouraging the Anglicans to join in, on the grounds that Exxon et al were helping to run Genesis in reverse.” The church’s investment branch elected instead to, “‘engage’ with the oil companies to get them to change their practices.”
In the ensuing decade, the Anglican Church found that didn’t work. Other than media campaigns, the oil companies mostly practiced business as usual.
Last month the Anglicans announced they would sell all their oil and gas investments because the companies had done “not nearly enough” to address climate disruption.
Meanwhile, many mainstream American churches have joined the movement. The United Church of Christ divested in 2013. The United Methodist Church and Episcopal Church followed suit in 2015. In the 2020s the United Methodists, Presbyterians, and a growing number of evangelical churches have favored boycott.
With progress in the faith community, 350.org and others concerned about climate change have turned their focus to other energy-rich investments: public pension funds.
CalPERS and CalSTRS, California’s public employee retirement funds, initially attempted engagement, striving to influence best practices at fossil fuel companies. The funds’ efforts have been no more successful than the Anglicans’.
Environmental groups have now upped the ante with a bill, California Senate Bill 252. This proposed legislation requires CalPERS and CalSTRS to divest absolutely from the largest fossil fuel companies by 2031.
If the two-year bill passes, it would also prohibit renewal or additional investments in non-renewable energy.
The environmental costs of burning fossil fuels are increasingly well known. What’s less obvious are the economic costs of holding fossil fuel investments within portfolios.
Reuters called the 2010s “a lost decade for shares of U.S. energy companies overall.” Even when dividends are counted, energy stocks rose only 39% through 2019, versus 250% for the S&P in general.
Another financial issue looming in the face of climate disruption is “stranded assets.” As environmental protections expand, the reserves of fossil fuel companies can become unusable and thus lose value. When this is reflected accurately, energy stock prices can erode further.
Will fossil fuel divestment campaigns work?
To date, more than 1,500 institutions with assets over $40 trillion have committed to divest from fossil fuels, according to Lipman. Success will be easier to recognize in the rear-view mirror. But time – and the effects of climate disruption – favor the boycotts.