Dive Brief:
- Studies of the financial consequences of divesting from fossil fuels fall on both sides of the spectrum, with some saying endowments are sure to take a hit and others reporting such stocks actually cause losses.
- Inside Higher Ed reports that the latest study showing negative consequences to divestment was funded by oil industry advocates, and confusion over the true results of divestment are still causing many institutions to question the best path forward.
- Syracuse University is among several that have fully divested from fossil fuels, while Harvard, Tufts, and the University of Michigan have maintained their investments — even in the face of strong pressure from students and other stakeholders.
Dive Insight:
While investing has become a moral question for many, investment fund managers and many boards of trustees still consider their jobs to be making the best decisions on purely financial grounds. If divestment is going to lose money, it doesn’t make sense. If it would have no effect or would actually improve investment performance, it does.
The problem is, studies are tied up in political realities as much as economic ones. One analyst suggests divesting from fossil fuels but maintaining investments in other energy sector holdings could solve the diversification issue as well as the moral one.