Plastic Pollution – A Quick Look at Leading Organizations
Stanford and MIT transition to green investments ENGLISH
1. 17 July 2015 Tara Dagostino
1
Stanford and MIT transition to green investments
The debate on divestment from fossil fuels is growing among American universities. As of this
month, a total of 28 universities decided to sell off their stocks from natural gas, carbon, and oil
companies. The movement - launched by the organization Go Fossil Free [1] - campaigns for a
greener environment and independency from fossil fuels around the world.
This year, the pressure from academia amplified after 8 subsequent universities decided to join
the movement. The most notable and prestigious, Georgetown University, announced June 4th
that they will sell off their carbon stocks [2].
Divestment in the United States
Divestment can be simply defined as the opposite of investment - In other words, the selling off
of stocks, bonds, and mutual funds. In the fossil fuels, divestment consists of selling of financial
securities from enterprises in carbon, natural gas, and oil sectors. This acts as a means of
pressure to stimulate the public debate about questions concerning climate change, as well as
encouraging investment in renewable sources of energy.
In the US, it is common for universities or cities to hold stocks. Collectively, American
universities hold more than $12 billion in stocks with businesses that extract and mine fossil
fuels [3]. These stocks, from companies such as ExxonMobil or BP Energy, allow universities to
subsidize scholarships and academic services.
Stanford University is the first Ivy League university to have announced their decision to sell
$18.7 million of their endowment of stock in coal mining companies [4]. Stanford was then
followed by a number of other universities, such as the University of Washington, Syracuse
University, and Unity College [5]. In a new report, MIT announced their decision to sell off a
portion of their endowment stock from fossil fuel companies, carbon mines, and tar sand
mines. The most recent figure was named at $12.4 billion [6].
Can divestment carry real impact?
Other universities refuse to sell off their energy stocks. In Cambridge, MA, Harvard and MIT are
head to head in the fossil fuel divestment debate. Particularly influential, the administration of
Harvard is opposed to the movement, claiming that in addition to having minimal, or even
negligible financial effects on fossil fuel companies, voting for divestment could potentially
reduce the voice of universities in the decision process of the fossil fuel corporations, as well as
diminish a large part of their financial resources dedicated to research, scholarships, and
academic services.
2. 17 July 2015 Tara Dagostino
2
The president of Harvard, Drew Faust, who openly expressed her opposition to the movement
in a letter to the Harvard community, suggests that it is necessary to keep university
endowment stock holdings to assure the academic financing of the institution - which
corresponds to a third of their total endowment - while maintaining the capacity to influence
and move companies towards a more economic and sustainable business model [7].
Other American scientists and intellectuals who have expressed worry over the subject say that
divestment would not have as large of an impact as others have hoped, simply due to the fact
that other enterprises and businesses will buy up the stocks that universities sell off. Stephen
Bocking, a professor of environmental science at Trent University in Ontario, explains that the
divestment movement is more symbolic than strategic, and will not have a grand impact on
climate change: “The ultimate consequence could be that oil and gas companies come under
less pressure and less influence to change their actions than they would otherwise if their
stocks were held by socially responsible investors like universities,” says Bocking [8].
More than a question of morals
Moral reasons aside, divesting from fossil fuels and moving their investments towards
renewable energies such as clean carbon and solar energy could be a strategic move for the
portfolios of higher education institutes.
According to a report from Bloomberg New Energy Finance, a few trillion dollars will be
invested in renewable energies within the next 25 years. The price of solar energy will continue
to drop as oil prices continue to soar [9] [10]. The International Energy Agency forecasts that
solar energy could be the principal source of energy around the world by 2050.
Other reports (such as one from the Panel for Climate Change of the UN [11]) show that the
effects from rising global temperatures will cause disastrous and irreversible effects on the
planet as a whole, as well as the entire world population.
Keeping in mind this trend, the transition from investing in fossil fuels to renewable energy
sources could be strategic and have positive outcomes for university endowments. Universities
could doubly continue to gain sources to finance their programs and institutions, all while
promoting renewable energy awareness to students and faculty. With the power that
universities have over these industrial energy giants, universities have been presented an
opportunity to be the base of a vast ideological change by engaging the students of today who
will be the future leaders of tomorrow.
![17 July 2015 Tara Dagostino
1
Stanford and MIT transition to green investments
The debate on divestment from fossil fuels is growing among American universities. As of this
month, a total of 28 universities decided to sell off their stocks from natural gas, carbon, and oil
companies. The movement - launched by the organization Go Fossil Free [1] - campaigns for a
greener environment and independency from fossil fuels around the world.
This year, the pressure from academia amplified after 8 subsequent universities decided to join
the movement. The most notable and prestigious, Georgetown University, announced June 4th
that they will sell off their carbon stocks [2].
Divestment in the United States
Divestment can be simply defined as the opposite of investment - In other words, the selling off
of stocks, bonds, and mutual funds. In the fossil fuels, divestment consists of selling of financial
securities from enterprises in carbon, natural gas, and oil sectors. This acts as a means of
pressure to stimulate the public debate about questions concerning climate change, as well as
encouraging investment in renewable sources of energy.
In the US, it is common for universities or cities to hold stocks. Collectively, American
universities hold more than $12 billion in stocks with businesses that extract and mine fossil
fuels [3]. These stocks, from companies such as ExxonMobil or BP Energy, allow universities to
subsidize scholarships and academic services.
Stanford University is the first Ivy League university to have announced their decision to sell
$18.7 million of their endowment of stock in coal mining companies [4]. Stanford was then
followed by a number of other universities, such as the University of Washington, Syracuse
University, and Unity College [5]. In a new report, MIT announced their decision to sell off a
portion of their endowment stock from fossil fuel companies, carbon mines, and tar sand
mines. The most recent figure was named at $12.4 billion [6].
Can divestment carry real impact?
Other universities refuse to sell off their energy stocks. In Cambridge, MA, Harvard and MIT are
head to head in the fossil fuel divestment debate. Particularly influential, the administration of
Harvard is opposed to the movement, claiming that in addition to having minimal, or even
negligible financial effects on fossil fuel companies, voting for divestment could potentially
reduce the voice of universities in the decision process of the fossil fuel corporations, as well as
diminish a large part of their financial resources dedicated to research, scholarships, and
academic services.](https://image.slidesharecdn.com/25a28172-c9d2-4fca-96b6-995417addcc2-160816203305/85/Stanford-and-MIT-transition-to-green-investments-ENGLISH-1-320.jpg)
![17 July 2015 Tara Dagostino
2
The president of Harvard, Drew Faust, who openly expressed her opposition to the movement
in a letter to the Harvard community, suggests that it is necessary to keep university
endowment stock holdings to assure the academic financing of the institution - which
corresponds to a third of their total endowment - while maintaining the capacity to influence
and move companies towards a more economic and sustainable business model [7].
Other American scientists and intellectuals who have expressed worry over the subject say that
divestment would not have as large of an impact as others have hoped, simply due to the fact
that other enterprises and businesses will buy up the stocks that universities sell off. Stephen
Bocking, a professor of environmental science at Trent University in Ontario, explains that the
divestment movement is more symbolic than strategic, and will not have a grand impact on
climate change: “The ultimate consequence could be that oil and gas companies come under
less pressure and less influence to change their actions than they would otherwise if their
stocks were held by socially responsible investors like universities,” says Bocking [8].
More than a question of morals
Moral reasons aside, divesting from fossil fuels and moving their investments towards
renewable energies such as clean carbon and solar energy could be a strategic move for the
portfolios of higher education institutes.
According to a report from Bloomberg New Energy Finance, a few trillion dollars will be
invested in renewable energies within the next 25 years. The price of solar energy will continue
to drop as oil prices continue to soar [9] [10]. The International Energy Agency forecasts that
solar energy could be the principal source of energy around the world by 2050.
Other reports (such as one from the Panel for Climate Change of the UN [11]) show that the
effects from rising global temperatures will cause disastrous and irreversible effects on the
planet as a whole, as well as the entire world population.
Keeping in mind this trend, the transition from investing in fossil fuels to renewable energy
sources could be strategic and have positive outcomes for university endowments. Universities
could doubly continue to gain sources to finance their programs and institutions, all while
promoting renewable energy awareness to students and faculty. With the power that
universities have over these industrial energy giants, universities have been presented an
opportunity to be the base of a vast ideological change by engaging the students of today who
will be the future leaders of tomorrow.](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)