Universities around the country and the world are making headlines for investing in a greener future for their students and communities. Harvard University joined several other U.S. colleges and universities on September 10 in divesting its nearly $42 billion endowment, the largest of any university in the United States, from the fossil fuel industry. This eye-popping divestment is part of a larger trend among numerous higher education institutions and systems that has gained steam over the past few years.
Some universities, like Rutgers University, George Washington University, and the University of California system, have fully divested their endowments from fossil fuels. Other universities are enacting gradual divestments from fossil fuels. Stanford University, for example, has only divested from coal companies.
Harvard is also not the only university in the Greater Boston metro area to divest its endowment from fossil fuels. The University of Massachusetts Foundation, Boston University, and Tufts University have also approved measures to divest their endowments from coal, tar sands, and/or all fossil fuels. Boston University’s announcement came only a few days after Harvard’s announcement, illustrating the powerful message sent by a university’s decision to divest.
The divestment trend is not unique to the higher education sector, and the broader push for divestment is making waves across the economy. Cities, faith-based organizations, NGOs, and other institutions are divesting funds, all chipping in towards a valuation of just under $15 trillion of worldwide institutional divestment in fossil fuels according to Fossil Free—a fossil fuel divestment data tracking project of the environmental advocacy group 350.org. As more individuals and institutions pull money from direct and fossil fuel-adjacent investments, banks and financial institutions are taking notice. A 2021 study published in the Journal of Economic Geography found that, after analyzing trends in 33 nations, countries with the strongest fossil fuel divestment movements in a given year also saw their oil and gas industries raise less money in that same year compared to historical averages. Given this current economic backdrop, it comes as no surprise that equity funds investing in fossil fuels were among the worst performing funds in 2020.
The power of divesting university endowments is clear, and it has the potential to reshape our economy in the near future. Environmental equity and climate change mitigation will take more than concrete government policies and scientific models to be successful—it will require a conscious shift in our institutions and economy. Universities are leading the way in taking action to benefit students and their communities alike by investing in a clean energy future.
