Editor’s Note: The author of this piece wished to remain anonymous.
Although the goal that GUFF sets is certainly a noble one, I fail to see this proposal as anything more but ineffectual, fumbling for anymore than ideological zealotism and even struggling for that.
The stock market does not affect the day-to-day well-being of a company, just its future capability to raise capital. Thus, when Georgetown divests from these companies, others (unbound by ethical scruples) will swoop in and buy our stock—the demand for the stock boosting the stock price and giving millions of dollars to those with major holdings in the long run.
Today, students will go to the polls to decide the fate of the Georgetown University Fossil Fuel (GUFF) movement, a student-led initiative to prevent Georgetown endowment funds from being invested in fossil fuel companies. This follows their 2019 proposal submitted to the the Committee on Investments and Social Responsibility (CISR), a body that makes recommendations to the university Board of Directors about the endowment and socially-responsible investing. This proposal asks that Georgetown “(1) immediately freeze all new direct investments in fossil fuel companies* and (2) completely divest its Endowment Fund from all fossil fuel companies by January 1, 2024.”
We have seen similar movements at Yale, Harvard, and most notably (to GUFF) at Seattle University. GUFF claims that Georgetown must divest from fossil fuels to demonstrate its commitment…to our Jesuit values,” fulfilling its “special obligation to address the unfolding climate change crisis.” They assert that it is not only a moral imperative (based on the “extremely deleterious” environmental and social impacts emerging out of the fossil fuel industry), but a financial imperative that Georgetown fully divests.
First of all, apparently, GUFF is in the business of giving financial advice. I think that we ought to leave financial consulting to the professionals in the endowment investment office who have access to confidential information about its status. Moving away from their claim that divestment would be financially sound, GUFF’s case makes a more substantial (although conceited) case for fossil fuel divestment.
During the 1980’s, there was a movement to divest Georgetown from South Africa in order to put financial pressure on their Apartheid government and force regime change from a oppressive white minority to a more equitable government. Although GUFF (as well as many proponents of fossil fuel divestment) would clearly like to think of their proposal as modeled after Georgetown’s sanctions against the Apartheid government, they fail to consider key differences that problematize this association.
Second of all, GUFF’s definition of a “fossil fuel company” is problematic. GUFF, while failing to mention a definition in their proposal to CISR, does define it on their website—claiming that Georgetown should divest from “any company whose business involves the extraction, and/or processing of fossil fuels, including all forms of coal, petroleum, and natural gas.”
During Apartheid, there was a clear target of sanctions—the white oppressive South African government. Now, however, GUFF’s initiative plans to launch these sanctions on a whole sector of not only the US economy, but of the global economy. Furthermore, processed fossil fuels make up an even larger part of commerce around the world—ranging from plastics to jet fuel. More than that, dozens of countries (some of whom Georgetown works with and receives sizable donations from) rely on fossil fuel for their affluence. Do we divest from these entities as well? Although I think that we must strive to move away from fossil fuels and towards environmental improvement, I don’t think that GUFF’s proposal has been met with enough friction in the student body about its scope and against the best way to approach GUFF’s goal.
During Apartheid, proponents of divesting had a clear goal of what they wanted—to force regime change. However, proponents of fossil fuel divestment now have a more nebulous goal—are they declaring war on the world economy (one that runs on the fossil fuel), or are their grievances aimed towards climate change as a phenomenon? Or is their movement a bifurcated one, striving to hit two birds with one stone? This is unclear to me.
On the one hand, GUFF seeks to condemn these fossil fuel companies on human rights abuses, dedicating a whole section of their proposal to “social impact.” They focus on both how climate change has affected the poor the most, as well as fossil fuel companies’ “demonstrated record of mistreating their workers and the surrounding communities where they work.”
Citing Shell’s actions against the Ogoni people of Nigeria, Exxon’s actions under Indonesia’s Suharto government and BP’s human rights abuses in the Caucuses, they urge Georgetown to divest for the sake of the “protection of human life and dignity.” Although these instances are unacceptable and should be condemned in full, their conclusion that “if a firm is willing to emit harmful chemicals into a community, there are few measures (other than divestment) to prevent further abuse” does not follow.
By this metric, Georgetown might need to think about divesting from all sorts of industries. Take Apple and Foxconn for instance. Even in 2019, we see Foxconn forcing employees in their iPhone factories into “working 100 hours of overtime” and having their workers be “‘punished’ for not meeting targets.” Where is the movement to divest from all companies that have committed human rights abuses?
On the other hand, GUFF seeks to encourage the transition to a more environmentally-friendly economy. They see the fossil fuel industry as “a major driver of Earth’s ecological ruin” and that the industry is complicit in “natural habitat destruction…pollution, and…(the emission of ) greenhouse gases.” Although the goal that GUFF sets is certainly a noble one, I fail to see this proposal as anything more but ineffectual, fumbling for anymore than ideological zealotism and even struggling for that.
If GUFF’s goal is to target those complicit with “natural habitat destruction…pollution, and…(the emission of ) greenhouse gases,” would it not make more sense to target those who are the most egregious consumers of fossil fuels? To withdraw our holdings in the automobile industry, to freeze our assets in electrical utility companies, to remove investments in agricultural and fishing industries that destroy thousands of miles of nature every day? If they are merely “symbolic measures” (as GUFF has asserted), then surely why not?
While it is hard to understate the importance of reducing the amount of carbon dioxide in the atmosphere, GUFF’s proposal lacks even an elementary understanding of how financial markets work. GUFF’s proposal paints a picture of the evil corporations such as Exxon and Shell feeding on Georgetown endowment monies, but GUFF’s depction is far from the truth.
When one buys stock in BP, one does not generally buy it from BP itself but from another person who sells it at a certain market price. The stock market does not affect the day-to-day well-being of a company, just its future capability to raise capital. Thus, when Georgetown divests from these companies, others (unbound by ethical scruples) will swoop in and buy our stock—this uptick in demand boosting the stock price and giving millions of dollars to those with major holdings in the long run. Even if Georgetown could affect the share prices negatively, fossil fuel companies will respond to less captial by extracting more in the short term to boost profitability. This will actually increase greenhouse emissions–a dangerous proposition if GUFF is truly about combating climate change. While Georgetown’s endowment might not be financially worse off in GUFF’s proposal, the environment might be.
Although GUFF might hold up Apartheid-era divestment as an example, this comparison falls flat as well. Without a clearer and more constrained target like South Africa to hone in on, divestment will not work especially given Georgetown’s minority stakes in these energy companies.
But fine. GUFF can insist we pass their proposal on symbolic terms, to show our solidarity with those fighting against climate change.
Except it really does not.
As an institution of higher education, would a better way to show our solidarity be to invest in more renewable energy research? To switch our grid from fossil-fueled to solar/wind-fueled? But then again, most of our energy use comes from the hospital, and I would not trust the hospital’s electricity to a solar-based grid.
Symbolism aside, GUFF could make greater impacts per capita by making it easier to pursue immediate small changes in our lives. This is not to say that Georgetown should not take moral responsibility for climate change. I just think that before we go to the polls today, we should think hard about exactly how this responsibility should be evaluated in practical terms.
Disclaimer: The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official or personal position of the Editorial Board, Contributors, or Business Staff of The Georgetown Review.
