The green divestment movement is facile, but strangely seductive, apparently; students at Harvard University, one of America’s marquee Ivy League schools, are the latest to be suckered in. Keystone XL aside, divesting from brown energy holdings is the environmentalist’s cause du jour on college campuses. Students are agitating for universities to move endowment investments out of companies associated with fossil fuels, and into greener options. A group of reportedly more than 300 Harvard students blockaded the Massachusetts university’s administrative offices on Thursday to encourage brown divestment, the FT reports:
The action, which organisers said was joined by more than 300 students, is the latest round of a growing campaign for US universities and other institutions to divest from oil, gas and coal companies because of concerns about climate change and other pollution.
The campaign, launched in 2011, has already persuaded 11 US colleges to divest wholly or partially from fossil fuels. The size of Harvard’s endowment – the largest of any educational institution worldwide – makes it a more significant battleground than any the campaign has tackled so far.Divestment has been backed by many students and more than 100 faculty members, but opposed by the Massachusetts university’s administration, which has argued that it risks damaging the endowment’s investment returns.
We’d be surprised if there were many economics majors in that crowd, and, if there are any, we’d suggest that they do a bit more studying and a bit less protesting. Like the executive secretary of the UN Framework Convention on Climate Change, Christiana Figueres (a supposedly responsible green leader who should really know better), these protesting students seem to lack a fundamental understanding of how investment works. Harvard didn’t grow its $33 billion endowment—the largest of its kind in the world—by pursuing investments that advanced some social good; rather, the endowment’s managers went after investments with the highest returns. If there were green stock picks with monstrous upsides, I-bankers wouldn’t hesitate to jump in head-first.The impulse to effect positive change in the world shouldn’t be stifled at our universities, but in this case it could be much better directed.