April 04, 2020

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Fossil Fuel Divestment as a Lever for Change: A Conversation with Bob Massie

"People in finance have a fantasy that the stock price is the sum of everything… The whole planet is at risk. What possible danger could be more urgent than that?"


By Francesca Rheannon

Bob Massie has run out of patience.

He has risked arrest on several recent occasions when activists tried to pressure Harvard University to shear fossil fuel holdings from its massive $33 billion investment portfolio – something the University so far has resisted doing.

The Episcopalian priest, sustainable investment leader, social activist and scholar of the anti-apartheid divestment movement is adamant that universities and other social institutions have a moral imperative to lead by example in countering the privileged position of the fossil fuel industry in the global economy.

In a recent essay published in the Harvard Crimson titled, "Even The Bricks Cry Out: It’s Time for Harvard To Divest," he gave short shrift to arguments that divestment is "ineffective" and therefore not worth risking returns in the University’s portfolio. He wrote:

The debate over divestment has taken on a surreal quality as people dither about whether selling stock is an effective method to avoid planetary catastrophe.

And Massie knows from effectiveness. HisBob Massie prize-winning 1998 study of the South African apartheid divestment movement remains definitive. He spoke with CSRwire about the lessons of that movement for today’s divestment campaign and why those who claim divestment is ineffective are both missing the point—and just plain wrong.

Hypocrisy and Moral Failure

You made a powerful plea in the Harvard Crimson for Harvard University charging that the debate over divestment is a distraction from a “a deeper debate over hypocrisy.” What do you mean by that?

What we've seen is a cataclysmic failure on the part of the people we call leaders in business and government to address this planetary crisis [of global warming]. One of the most striking hypocrisies in the world today is that many organizations say they are deeply concerned about climate are nonetheless accepting cash in large amounts from fossil fuel companies, either in the form of grants or dividends and stock appreciation.

So we have this contradiction where institutions say they want something but then have ownership in companies whose business model exactly opposes what the institutions say they are for.

It is not only a moral problem but a financial one: either companies are going to pump these reserves and destroy the planet or they are going to have a massive loss in value that will damage the owners who continue to hold onto their stock.

Bill McKibben [who initiated the divestment movement] pointed this out and as a result, this question has been brought before hundreds—and soon thousands of institutions that have not wanted to address this uncomfortable contradiction at the heart of their lives.

Countering the “Drop in the Bucket” Argument

There has been a big pushback from many institutions including Harvard with President Drew Faust countering that fossil fuel divestment by the University would be just a drop in the bucket and would mean little. What is your response?

I think that's a shameful argument and violates the principles Harvard is based on. The example I gave in my piece is: let's say Harvard University had held shares in various slave plantations – as many institutions did, including the Anglican Church.

No one today would accept the argument that “if we just sell our share in this plantation, nothing will happen, so we might as well hang on to the money we are receiving from this genocidal behavior.”

The position that President Faust is taking is that we'll only do things if we know in advance that they are going to be effective. There is no philosophy that says that is appropriate for making moral choices.

Lesson of Anti-Apartheid Divestment: Many Drops Make a Wave

In your piece in the Harvard Crimson, you follow up the moral argument with the point that divestment is, in fact, effective.

Yes. There’s an interesting paradox.

People need to act, even if they don't know if their action is going to be effective. That is the nature of moral responsibility. That is the nature of moral courage.

However, the paradox is, if enough people act, their actions aggregate so that over time those individual actions that seemed ineffective turn out to have been effective. That's the lesson from the South African [anti-apartheid divestment]: more and more institutions felt that it was inappropriate to be receiving money from companies that were benefitting from a brutally racist system.

And as they began dumping stock and cutting off relationships, it transformed the political debate in the U.S. – so much so that the Republican Party eventually agreed to pass comprehensive sanctions in 1986, which President Reagan vetoed and which the Republicans in the Senate overturned. It was the only time in Reagan's presidency that a foreign policy veto was overturned.

So the dramatic transformation of the political context in the United States was due to the divestment movement – which started off as small actions by individual institutions and students. It took a long time but they prevailed. The evidence is incontrovertible that these accumulated actions put sufficient pressure on companies to leave South Africa and on the South African government to negotiate and release Nelson Mandela and move to democratic elections.

Of course, South Africans themselves played the leading role. But divestment, as the South Africans have always pointed out, was a critical support to turning Western allies of the racist government into opponents.

Stock Price Is Irrelevant

So the goal is not to expect a direct financial impact but to use the fossil fuel divestment movement as a financial lever to move the political battle forward?

Absolutely. People who oppose divestment keep saying it's not going to have any impact on the stock price. I have been studying this for more than 20 years and I have never stock price ups and downsencountered any advocate for divestment who believes it will affect the stock price.

People in finance have a fantasy that the stock price is the sum of everything and so they go down their own little mental track and say, “Well, if it doesn't affect the stock price, it must not be important.” That's a very narrow view that is irrelevant to the divestment debate but they keep bringing it up so they can knock it down. It's a straw man.

Divestment and Politics

The fossil fuel divestment movement emerged out of frustration with gridlock in the political sphere. Billionaire Tom Steyer and others are working to unfreeze the gridlock by giving money to politicians who recognize the need to stop global warming and against climate deniers. Do you see the two strategies in competition with each other or working together?

They are absolutely compatible. Tom Steyer is doing something very important and absolutely consistent with how American democracy works.

We know that hundreds of millions of dollars have been poured in by the Koch brothers, the U.S. Chamber of Commerce and the fossil fuel companies to elect people who support them and to put out completely false information about climate.

Tom is creating the context where that is being fought at the ballot box.

However, even if you elect all the people you like, you need public support for legislation. And many of my friends who are in public office say when they got into office, they thought they could make a lot of change. But then they realized they can only make changes when it's clear the public wants change.

There needs to be a clear public movement demanding these kinds of steps be taken. The divestment movement is forcing conversations in institutions that will create that context.

We almost passed a climate bill a few years ago, and it failed because there wasn't enough external support and various senators backed away.

Time to Stop Being Polite

I want to point out there's an interesting parallel to what's going on [with the fossil fuel divestment campaign].

Everyone remembers the Letter from Birmingham Jail that Martin Luther King wrote. A lot of people forget to whom the letter was addressed. It was not addressed to Bull Connor and the MLK Jr Memorial carvingracists of Birmingham. It was addressed to white moderates—clergy and other leaders—who were advising Dr. King to tone it down and not be so unreasonable. They told him his push for change and holding demonstrations was counterproductive.

And his rebuttal as to why this polite conversation was leading nowhere is in the letter.

We have a very similar situation among progressive Americans. People say they want to do something about climate change but when we showed up in the Sanders Theater and unfurled a banner, they shouted us down.

I've risked arrest twice in the past month and people have told me it's a very brave thing to do. But I cannot understand why there are not tens of thousands of people presenting themselves in front of their legislatures right now doing the same thing. The whole planet is at risk. What possible danger could be more urgent that that?

And yet we have hundreds of millions of people sleepwalking through their lives hoping that somebody else will fix that. That has to stop. People have got to wake up.

Bob Massie is currently president of the New Economy Coalition, an organization that promotes the development of an “economy that is restorative to people, place and planet, and that operates according to principles of democracy, justice and appropriate scale.” It is convening a gathering June 6-8 in Boston called CommonBound to develop leadership for the New Economy.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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