Q: What is divestment?
A: When a person, group, or organization ends investment in a certain company or industry, they are said to be “divesting.” Over 1,000 public institutions including universities, foundations, and municipal governments have already committed to selling their financial holdings in fossil fuel companies specifically - see Our Peers to see who’s stepping up.
We demand Princeton cancel all current and future investment in the fossil fuel industry. That means all direct holdings in fossil fuel companies and fossil fuel extraction (e.g., Chevron, Shell, ExxonMobil), all indirect holdings in fossil fuel-supportive funds (like those of JPMorgan Chase), and all major supporters and shareholders of the industry.
Q: How is divestment an effective tool?
A: The immediate goal of divestment is not to bankrupt companies of their money, but rather of their reputations. In this way, divestment is primarily a moral and social strategy. Taking a strong position against the industry and “putting our money where our mouth is” will amplify the message that fossil fuels are dangerous, and that investing in them is wrong. Put another way, cutting ties with fossil fuel companies strips them of their social license to operate.
Q: What is the history of divestment at Princeton University?
A: During the 1970s and 80s, student groups like People’s Front for the Liberation of South Africa called on Princeton to divest from companies operating in South Africa during apartheid. In 2006, the Board of Trustees voted to “disassociat[e] from companies that directly or indirectly conduct operations in Darfur that support acts of genocide, and to prevent future investment in such companies.” At the time, the Council of the Princeton University Community noted “considerable, thoughtful and sustained” campus interest in the conflict and a “widespread consensus that action should be taken.”
Between 2013 and 2015, Students United for a Responsible Global Environment (SURGE) worked to build new consensus around divestment from fossil fuels, but their motion to divest was ultimately denied. Divest Princeton was founded in the Fall of 2019 to renew that effort.
Q. What is the formal process for divestment at Princeton?
A. A proposal is put to the Resources Committee of the Council of the Princeton University Community (CPUC). From their website, their mission is to “consider questions of general policy concerning the procurement and management of the University’s financial resources.” The Resources Committee includes faculty, undergraduates, graduate students and staff (see current committee members here). The Resources Committee has laid out guidelines for divestment. The University policy states that the University must also stop receiving funding from fossil fuel companies if they divest. Research Funding Annual Reports show between 2000 and 2020, BP has poured over $43 million into the University while ExxonMobil has given $6.7 million.
The Resources Committee consults a number of different groups - this may include the Princeton University Investment Company (PRINCO) (see current board members here) and the Sustainability Committee. It then makes a recommendation to the Board of Trustees (including the President of Princeton). Though the decision making process is opaque, it is most likely that the final decision will be made by the Board of Trustees and the President of the University.
Q: What will change at Princeton once divestment happens?
A: While day-to-day operations will likely go unchanged, divestment will show that Princeton takes seriously its mission to reduce its greenhouse gas footprint, that it believes in the work of its faculty and scientists, and that it cares about the corporate missions of companies in which it invests. Over the long-term, this will help produce healthier research relationships and reinforce Princeton’s reputation as a forward-thinking university.
Q: Won’t Princeton lose money by divesting from fossil fuels? Won’t that reduce opportunities for learning?
A: Fossil fuels were extremely profitable in the past, but they’re increasingly becoming risky investments: Fossil fuels’ share of the global energy mix has been trending downward since 2010. Reports also show that clean energy investments are now competitive with fossil fuel, and that as a growing market, clean energy is the safer financial option. Backing renewable energy over fossil fuel means building a cleaner, fairer future, not profiteering from pollution.
Q: Princeton is also fighting climate change through its scientific research. Won’t divestment hurt these efforts?
A: Princeton’s world-class scientific research is undermined by the companies that fund it. For example, Princeton’s energy research program, the Andlinger Center, has received $6.7 million in renewable technology research funding from ExxonMobil, a company that pushes misinformation and lobbies the government to thwart the success of these same technologies. Princeton is less of a partner in these relationships than a tool for corporate greenwashing.
Q: Divestment is a political action. Surely the University should stay out of politics?
A: Princeton’s support for the fossil fuel industry is a political act in itself, given the industry’s rampant political lobbying and efforts to warp scientific consensus around the issue. Shell and ExxonMobil predicted the impacts of fossil fuels on climate change as far back as the 1980s, for instance, and in the years since have only extracted more. By investing in these companies, Princeton shields their harmful activities from scrutiny and lends legitimacy to an unsustainable status quo.
Q: Isn’t it hypocritical to divest from the fossils while continuing to use them for our energy needs?
A: The false choice between divestment and a working light switch is a typical rebuttal made by divestment skeptics. We argue Princeton can divest while reducing personal dependence on fossil fuels, and that it can use its endowment to develop alternatives that, if not now, will someday be available in New Jersey. As Environmental Humanities Professor Robert Nixon argues, “we should be doing everything to accelerate decarbonization in advance of it being feasible, and the first step in this is removing funds from the industry.”
Q: How do you know Princeton even has money invested in fossil fuels?
A: With $26 billion invested in all, it's probable the University supports these companies in some way. However, secrecy is a common defense against divestment movements, and Princeton does not disclose the nature of its investments. Whether or not it ever opens its books, we want Princeton to acknowledge that having these investments is reckless and immoral, and that it will not maintain such investments going forward.
Q: Don’t its investments in fossil fuels give Princeton influence in the industry? Can’t Princeton encourage sustainability by being an active shareholder?
A: Scientists say that in order to keep global warming below 2°C, we need to leave most of the world’s known fossil fuel reserves - including 90% of U.S. coal reserves - underground and unburned. This is an achievable goal, but it’s not the type of thing shareholders would vote for willingly. Make no mistake, Exxon would still be a profitable energy company if it transitioned to renewables, but it would only do so if forced by regulation or extreme social pressure. Princeton resists “position-taking” with its endowment funds, and is therefore unlikely to push these companies from within.
Q: Princeton is already fighting climate change with its Sustainability Action Plan. Why do we need divestment, too?
A: Princeton’s SAP doesn’t call for net zero carbon emissions until 2046 (the second-weakest target among all Ivy League universities), which is insufficient given the urgency of the climate crisis and the University’s unquestionable ability to do more. Moreover, Princeton’s “net zero carbon” goal doesn’t include important Scope 3 emissions.
What modest improvements Princeton’s SAP does promise are likely offset by its support of the fossil fuel industry. Princeton can’t fund the problem as well as the solution. If it wants to be sustainable, divestment must be part of the strategy.
Q: Does divestment work?
A: Yes, but it depends on what we mean by “work.” Divestment works as a catalyst for social change: thirty-nine of the world’s top banks, including Morgan Stanley and France’s Crédit Agricole have stated they will no longer do business in coal. Divestment works as a financial lever: Peabody Energy, the U.S.’s largest coal company, cited divestment as a cause of its 2016 bankruptcy. Divestment, and reinvestment in clean energy, works to generate profit: BlackRock, the world’s largest asset manager, recently announced plans to divest from coal, stating its “investment conviction is that sustainability-integrated portfolios can provide better risk-adjusted returns to investors.”
In so many ways, divestment has proven itself a worthy pursuit. Perhaps the better question is: does the status quo work?