To the Editor:
A Feb. 16th letter to the editor in this section claimed that “[d]ivestment would harm Cornell, reduce its influence and, most significantly, do absolutely nothing to fight climate change.” However, the analysis was incomplete and misleading. Divestment is a moral imperative for the University and a meaningful sanction for the fossil fuel industry.
It’s hard to believe that Cornell’s endowment would suffer by removing assets which effectively did not grow over 10 years. Selling fossil fuel stocks, coupled with the shrinking investor market, makes them less valuable. While higher risk investments “ought to” have a higher return, they don’t consistently — that’s why the risk is higher.
Critics of divestment love to cite that shareholders can advocate for changes to the practices of businesses they own equity in. Cornell has publically reported that it does not do this. Furthermore, shareholders cannot effectively advocate for oil companies to stop expanding their drilling, because the way oil companies establish and maintain their value is through the expansion of proven reserves of gas — basically, a company will be devalued if it doesn’t consistently expand its reserves. (Naomi Klein’s This Changes Everything explains this concept in more depth in the chapter “Banning and Planning”). If Cornell isn’t doing shareholder advocacy, and it wouldn’t work anyway, it seems like a silly thing to worry about preserving.
Oil companies are uniquely culpable for climate change because they have known for decades that their business results in dramatic, disruptive changes to how our climate works. Because they are a “rational actor,” as economists often call actors who seek to maximize profit without concern for the other things that may indicate human success or fulfillment, they realized that they could maximize profit by covering up their scientific findings, sowing doubt about the changes they knew were coming and aggressively resisting policies which might help the greater good.
Let’s assume that we can use companies’ supposed “rationality” for good for a second — divestment is a sanction which challenges the ability of fossil fuel companies to operate in the ways that they do. Divestment has had a large enough impact that Shell Oil has called it a “material risk,” which they anticipate making it more difficult for them to raise capital. It also calls into question the social right to continue their current practices, asserting that companies cannot seek profit at the expense of human livelihoods and our personal, ecological and social prosperity. The fossil fuel industry cannot operate as usual if we want to prevent further suffering and damage caused by climate change and pollution, and divestment communicates our refusal to support it.
Katie Sims ’20
Cecilia Martindale ’20
Nick Sutera ’22