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Fossil Fuel Divestment Frequently Asked Questions

In 2010, Swarthmore students founded the world’s first fossil fuel divestment campaign. Since then it the movement has grown into a movement with over 500 campaigns worldwide. Hundreds of institutions have divested funds totalling over $1 trillion, including Oxford University, the University of Hawai’i, Stanford University, the city of Seattle, Norway’s Sovereign Wealth Fund, and even the Rockefeller Brothers Fund — a fund built on the profits of Standard Oil Company.

During the 2014-15 school year, 1,100 alumni and 950 students signed a petition calling for full divestment, and in April 2015, the Faculty Senate passed a resolution formally recommending that the Board divest from separately-managed, a subset of the endowment for which the Board agrees divestment would have no cost.

In May 2014, the Swarthmore Board of Managers rejected both the student/alumni and faculty proposals.Endorsements:

 What is your proposal?

1.    Immediately freeze all new investments in the “Carbon Underground 200,” the 200 fossil fuel companies with the largest global carbon reserves.

2.       Fully divest from the “Carbon Underground 200” by 2020, the year global emissions must peak to avoid a 2°C warming and runaway climate change.

      3.  Reinvest at least 1% of the endowment into renewable energy solutions.

Will divestment hurt the endowment?  (Visit for more information, resources, and studies.)

Markets are notoriously difficult to predict, but the best information suggests divestment would be more likely to increase returns than decrease them. Greg Kats, an Investment Expert paid by the Board to advise on climate action urged the Board to divest, calling divestment the “fiscally rational” option, citing studies by Bloomberg, MSCI, and S&P Capital that found that fossil fuel stocks have substantially underperformed the market average return over the last decade. The Board has claimed that, in order to divest, we would need to move our entire endowment from actively managed to passively-managed funds. This 2-year old claim is outdated given the rapid rise of actively managed and fossil fuel-free funds. The College’s largest investment consultant, Cambridge Associates, has offered to help Swarthmore divest without moving away from our current, high performing funds. Fossil fuels are becoming even less profitable and riskier investments due to rising concerns about the growing ‘carbon bubble.’

What is the carbon bubble?

Fossil fuel companies are spending more to produce less from difficult and dangerous methods like deep water drilling, tar sands extraction, and fracking. As a result of the divestment movement, mainstream financial institutions like Morgan Stanley, Bernstein, Citi, Deutsche Bank, Goldman Sachs and HSBC are publicly questioning the long-term profitability of fossil fuel investments. If we’re going to avoid the worst impacts of climate change, the fossil fuel industry must leave 80% of proven reserves–valued at $20 trillion—in the ground. HSBC reported that if they were to write off that 80% of their reserves, fossil fuel companies would be devalued by 40-60%. Obviously, we don’t want to be invested in the fossil fuel industry when it takes that hit.

But the carbon bubble hasn’t popped yet!

Precisely. Just before the 2008 financial crisis, a Citibank executive famously said about his practice of making risky loans, “As long as the music is playing, you’ve got to get up and dance.” Citibank lost millions in the ensuing crisis.

 Why is climate justice such an urgent issue?

From refineries in communities of color to rising sea levels impacting small island nations, those least responsible for the climate crisis — the poor, people of color, and communities throughout the developing world — are facing the worst impacts as a result of our fossil fuel dependency and climate change. UN scientists tell us that if we are to prevent runaway climate change we need to leave 80% of proven fossil fuel reserves in the ground, and peak global emissions within the next five years. Meanwhile, the fossil fuel industry is using its extreme wealth to acquire more reserves, fund climate denialism, and lobby governments in order to maintain their subsidies and prevent the development of renewables. We cannot stay silent and allow Swarthmore to champion struggles for social justice in its classrooms while supporting the companies that are destroying communities through the endowment.

 Is divestment effective?

Yes! The fossil fuel divestment movement is already eroding the social and political licence of the fossil fuel industry through stigmatization. By divesting, prestigious institutions like Swarthmore highlight the destructiveness of fossil fuel extraction and the need for more just and sustainable solutions. As hundreds institutions have divested and world leaders such as Desmond Tutu, Christiana Figueres ‘79, and Al Gore have endorsed divestment, stigmatized firms have begun begin to lose their political and social reputations. A study by the Oxford University Stranded Assets Programme found that “the outcome of this stigmatization process, which the fossil fuel divestment campaign has triggered, poses a far-reaching threat to fossil fuel companies and the vast energy value chain,” noting that stigmatised firms “suffer from a bad image that scares away suppliers, subcontractors, potential employees, and customers.”

 What are the effects of divestment so far?

The fossil fuel industry itself has acknowledged the threat posed by the fossil fuel divestment movement to its continued dominance. In December 2013, Alberta Oil Magazine warned that “energy executives ignore [divestment] at their own peril.” The Minerals Council of Australia, a coal industry group, is even attempting to render divestment illegal, claiming that it unfairly burdens them because “stigmatization [caused by the divestment movement] makes it difficult for an industry to engage with its customers, attract employees and more importantly access capital for investment purposes.” Peabody Coal — the largest publicly traded coal company in the world, listed the divestment movement as major threat to their profitability in last year’s SEC filing.

Last year, Blackrock, the world’s largest asset manager, created a fossil free index, securing the place of divestment in the financial mainstream. NRG, the largest publicly traded energy company in the US, committed to reducing their emissions 90% by 2050, citing the stigma generated by the fossil fuel divestment movement as a major reason. Our movement’s highlighting of the urgency of this issue has even led to President Obama proposing national carbon regulations for the first time.

Will Swarthmore alone divesting really make a difference?

It’s true that divestment on a single campus is not enough. However, Swarthmore has a $1.9 billion endowment, is a highly respected academic institution with large amounts of political and social capital, and is home to the first-ever fossil fuel divestment campaign. We have influence and social power disproportionate to our size, and Swarthmore divesting would set a precedent for other colleges to follow. As UN Climate Chief Christiana Figueres ‘79 said in her letter to the Board calling for divestment, “The thought that one institution’s small investment level is inconsequential to change is analogous to the unacceptable belief that the education of one student is unimportant because a single person does not effect change.”

 How can I help?

        Sign the petition, then share with your classmates through social media, email, and online class discussion boards:

        Put your donations into the Fund for a Responsible Swarthmore, which will enter the College endowment only once the Board commits to divest:


    The Swarthmore Faculty Senate
Figueres ’79, UN Climate Chief
Dean Baker ’80, Center for Economic and Policy Research.
Gregory Kats, Board’s Paid Investment Expert
Delaware County Daily Times Editorial Board
Swarthmore Phoenix Editorial Board
Swarthmore College Democrats

resource & document list
Resource 1, Petition:
Resource 2, Two Plans for college donations.
Resource 3, document:
"We Divest for Social Ostracism and Public Humiliation" 
Resource 4, document: "Why We Can Never Divest Again
Resource 5,
YOU ARE HERE:  "Fossil Fuel Divestment FAQ"
Resource 6, document "Swarthmore Chooses Excellence in the 1800s.