Cambridge University Rejects Fossil Fuel Divestment

Published August 7, 2018

A new report from Cambridge University in the United Kingdom reaffirms the institution’s decision to reject activists’ calls to divest fossil fuel securities from its £5.9 billion endowment.

The university rejected divestment in June 2016 and requested a report from its working group on investment responsibility.

After the release of the report, the University Council at Cambridge issued a statement in June of this year saying the financial sustainability of the university depends on strong returns from its investments and the ability to assess investment strategies based primarily on returns to the Cambridge University Endowment Fund (CUEF). The University Council reported CUEF significantly outperformed its market benchmarks over the 10 years of its existence and has greatly enhanced the university’s ability to pursue its mission.

“[CUEF] returns are a critical component of the financial resources that underpin research and education activities across the University, including the provision of some financial support for students and the enhancement of education and research facilities,” the Council reported. “Divestment from any funds that have even small fossil fuel components, or that would require CUEF to step back from investments in alternative energy initiatives by global companies currently regarded as fossil fuel companies, would result in significant limitations on the CUEF’s ability to invest as successfully as in the past, with consequent reductions in the fundamental support provided by the endowment to the University’s core academic activities.”

Most Reject Divestment

Most universities have rejected the activists’ demands because divestment ultimately hurts students while doing nothing to fight climate change, says Matt Dempsey, a spokesman for Divestment Facts, a project of the Independent Petroleum Association of America.

“No matter how much a university divests, no amount will do anything to address climate change as climate activists allege,” Dempsey said. “Your endowment is penalized, ultimately hitting students hard as funds to support them decline.

“Divestment across the globe comes at a high cost for students, with no environmental gain, which is why the overwhelming majority of universities to consider divestment have rejected it,” said Dempsey. “Harvard and most of the major Ivy League schools have rejected divestment because they see it as a bad policy.”

Dempsey says some colleges have undertaken fake divestment, in which they will announce they are divesting from fossil fuels when they didn’t have any fossil fuel holdings to begin with, or when their endowment includes mutual funds, over which the university has no direct control, that have coal, oil, and gas stocks.

“They’ll put out a press release saying they’re not going to invest any of their endowment into fossil fuels, but of course it’s meaningless since they own little or no fossil fuel stocks to begin with,” Dempsey said.

Astroturf Activism

The divestment movement was largely started by climate activist Bill McKibben with support from anti-fossil-fuel nonprofit groups, says Dempsey.

“McKibben goes around to these schools recruiting students to make some noise over climate change and divestment,” said Dempsey. “It started about five years ago at Swarthmore College, which has rejected divestment about three or four times.

“Usually the handful of students on campus who are part of a divestment campaign will stage protests and approach their board of regents or governing body requesting the university divest from fossil-fuel-related businesses,” Dempsey said. “The news media covers students marching or attending meetings to demand divestment, making the movement appear larger than it is.”

When rejecting divestment, most schools try to placate the activists by adopting other policies purported to fight climate change, Dempsey says.

“Most schools considering divestment go through a lengthy process before ultimately rejecting it,” Dempsey said. “They instead devote a great deal of money, time, and resources to other programs and commitments to fight climate change.”

‘They Harm Themselves Financially’

Activists calling for universities to divest from fossil fuels are trying to turn university endowments into billboards for political causes, says Rachelle Peterson, director of research projects at the National Association of Scholars.

“Endowments are not meant, nor should they be used, for political purposes,” said Peterson. “Their purpose is to support the endeavors of the universities and not to make political statements. Attempts to push divestment are virtue-signaling in furtherance of political causes and go against the fiduciary responsibilities of the trustees of universities, who are entrusted to protect and enable the academic endeavors of the university.

“When colleges and universities divest from coal, oil, and gas companies, they harm themselves financially,” Peterson said. “They cut themselves off from a productive and prosperous sector of the economy, harming their students, professors, staff, and ultimately the future well-being of the university as a whole.” 

Temporary Popularity

Adrian Moore, vice president of policy at the Reason Foundation in California, a state where many divestment efforts have been tried, says divestment becomes unpopular when it starts costing people money.

“Divestment is very popular until a pension plan loses money, and suddenly it’s all about returns and everyone forgets about divestment until things are good again,” Moore said. “Divestment is politically expedient for scoring rhetorical points, and it’s politically expedient to undo it when you actually need those investment returns.

“When people relying on retirement funds don’t get their expected investment returns, they call for a change in focus of management, which has happened over and over again in California,” said Moore.

Kenneth Artz ([email protected]) writes from Dallas, Texas.


Daniel R. Fischel et al., “Fossil Fuel Divestment and Public Pension Funds,” Compass Lexicon, June 7, 2017:

Rachelle Peterson, “Inside Divestment: The Illiberal Movement to Turn a Generation Against Fossil Fuels,” National Association of Scholars, November 10, 2015:–against-fossil-fuels