A response to Harry Saunders’ “Divestment will not keep carbon in the ground”

– Originally posted on the Sussex Energy Group blog, January 29th 2015. Co-authored with Emily Cox

This blog post is a response to a recent article on the divestment of shares in fossil fuels by Harry Saunders.

Jack and Emily are part of the ‘Fossil Free Sussex’ campaign, which aims to encourage the University to move its investments away from the oil, gas and coal industries.  In his well-written and thought-provoking article, Harry argues that ‘divestment will not keep carbon in the ground’, by pointing out that shares in a company represent a stake in the ownership of that company, but do not affect the fundamental production economics, even if widespread divestment does occur.

These kinds of arguments against divestment seem to be based upon the view that the campaign is trying to bankrupt the industry. Whilst campaigning at Sussex, we have said from the beginning that the damage we are attempting to do is not financial; UK universities have a combined endowment wealth of around £10bn (People & Planet estimation, 2013), of which around 5% can reasonably be thought to be represented by fossil fuel stocks.  We are aware that £500m is never going to financially harm the industry (and after reading the article, it is apparent that were this figure to be much larger, it still wouldn’t).

What we are instead trying to do is inflict reputational impact. The oft-made analogy between divestment in fossil fuels and Apartheid South Africa highlights where this has been successful in the past (though there are of course distinct differences between the two – this analogy is slightly challenging but the basic principles are the same). Our universities do not invest in tobacco, arms manufacture, pornography or gambling industries. The arguments Harry has made apply equally to these companies, yet they have a reputational tarnish and thus have seen their shares sold by certain institutions. We believe this industry should be added to that list, because of issues like unburnable carbon; we are not saying that we should divest to stop carbon emissions (directly), but that because of carbon emissions we should divest.

The divestment campaign is not attempting to halt – or even particularly to slow – fossil fuel extraction. In fact, it is precisely this absence of grand ambition which is appealing, since it thereby avoids the problems of intractability which tend to plague public attempts to tackle climate change. Instead, the campaign seeks to redefine what we mean by an ‘ethical investment’. Most universities (and churches, and other institutions who are considering divesting) already have an ethical investment portfolio, which avoids arms, tobacco etc. What is needed is a redefinition of ‘ethical’ to include concern for the climate. An investment in fossil fuels should not be considered an ethical investment, assuming that protecting the environment and mitigating climate change is an ethic we hold dear.

In this sense, perhaps better parallels can be drawn with other types of ethical investment, such as switching to an ethical bank account or buying fair trade. No-one claims that ethical bank accounts such as Triodos are going to put a stop to the arms trade; it is more a case of feeling that our own money should not be used in ways we feel uncomfortable about. It should not always have to be a choice between changing the world or doing nothing at all; sometimes small actions are correct for moral, rather than pragmatic, reasons.

This campaign is empowering people – in Sussex and worldwide – who otherwise feel they can do nothing about climate change, save ride their bike more and listen whilst policymakers squabble. Even if Sussex doesn’t divest but we cause a few more people to become interested in climate, then we will feel that the campaign has been a success.


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