85th university in the UK has divested from fossil fuels
Liverpool School of Tropical Medicine (LSTM) has today become the 85th university in the UK to publicly commit to divest from fossil fuels. Making the commitment, LTSM Director David Lalloo issued a statement which said the university “could not ignore any longer” the moral case for cutting its ties with the fossil fuel industry.
Lalloo said:
As the oldest institution of its kind in the world, our (LSTM) mission is to break the cycle of poor health and poverty. We could not ignore any longer the strong moral and global health arguments for completing this move when we can already see the impact of climate change on disease patterns in endemic countries.
Student activist network People & Planet – which has spearheaded the campaign for fossil fuel divestment in UK universities – estimates that the decision will see £2.6 million of investments pulled from fossil fuel companies.
LSTM’s decision has been welcomed by divestment campaigners. Rob Abrams, climate and health organiser and Medact said his organisation was “delighted”. Abrams said:
We are delighted to see this move by the Liverpool School of Tropical Medicine to remove its last remaining investments in fossil fuels. With this announcement, LSTM joins a large number of British health institutions that have, in the last 4-5 years, answered the call for effective action on the climate crisis by divesting from the fossil fuel industry. With the [World Health Organisation] forecasting an additional 250,000 deaths per year between 2030-50 if we don’t rapidly scale down emissions, climate change is and will remain the single greatest challenge to global health.
However, Abrams also criticised other universities for not having taken the steps that LSTM has. In particular, he singled out other medical schools, such as the London School of Hygiene and Tropical Medicine for not following suit.
The London School of Hygiene and Tropical Medicine was the first health research school in the world to begin to shift its investments away from coal companies. However, its decision – made in 2015 – did not commit the university to ending its investments in other fossil fuels. The London School’s investments have an estimated value of over £1.4 million.
Abrams said:
Other medical schools, including the London School of Hygiene and Tropical Medicine, must now follow LSTM’s lead and join them in sending a powerful message to the fossil fuel industry by committing to full divestment.
People & Planet co-director J Clarke echoed Abrams view. They described institutions continuing to invest in the fossil fuel industry as “indefensible”. Clarke said:
Seven years of student organising in higher education has made divestment a common sense decision, and continued investment in fossil fuel companies is now widely viewed as an indefensible, shortsighted action that puts profit before wellbeing.
For public health institutions this is even more important, and London School of Hygiene and Tropical Medicine must now follow Liverpool’s example and commit to divest from those most responsible for the climate crisis – fossil fuel companies. With every day that passes the evidence mounts and pressure from social movements rises, clearly stating: If it’s wrong to wreck the climate and our health, it is wrong to profit from that wreckage.
Over 1,300 institutions across the globe have now made public commitments to cut their financial ties to the fossil fuel industry. As a result, an estimated $14.5 trillion of investments have been withdrawn from the sector.
Such divestment commitments have taken place after consistent and sustained public pressure from grassroots activists and campaign groups.
When student activist network People & Planet launched the UK wing of the Fossil Free campaign in universities in 2012, no higher education institutions had committed to divest from the fossil fuel industry. But since the University of Glasgow became the first to divest in 2014, dozens have followed suit, taking the total now to 85.
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Image credit: Kate Ausburn – Creative Commons
As much as I’ve read about the idea of divestment from fossil fuels, I’ve never understood what it’s supposed to achieve.
Selling shares to some other owner isn’t doing a thing – although if enough owners want out, the price of fossil fuel companies will drop, and so will the price of fossil fuels. That doesn’t seem like the intended outcome.
In this context, divestment is completely wrong. Keeping your shares and voting for the company to shut down and leave its fossil fuels in the ground would be costly, rather than a meaningless gesture, but would actually work.
Basically, we need people to divest from a diversified portfolio of fossil fuels, and all invest in the same companies, which can then be closed. Of course that’s not return-neutral, so pension funds etc aren’t allowed to do it, but that’s another matter.
Regard your question about the price of fossil fuels dropping Davey, I agree that share prices of fossil fuel companies dropping is an direct outcome of high levels of divestment, but am unconvinced that it follows that the price of fossil fuels automatically drops to any significant degree (when oil prices are in any case, quite unstable and driven by many other geopolitical factors). Working on the assumption that a fossil fuel company is going to act in the way that it thinks will maximise immediate returns (and consequently their prices are more or less the imcome maximising ones), it’s far from clear to me that the new income maximising prices for fossil fuels are going to drop.
The other things worth factoring in are the second hand effects- divestment hammering the share prices leaves fossil fuel companies with less money to invest into finding new coal/oil/gas sources or lobbying against climate laws, it makes lending to them a less enticing prospect to banks and insurers are also disincentivised from supporting their projects (pushing up prices for fossil fuel companies and slowing down the rates of industry growth), and if the industry is percieved as dying and politically unpopular, they have a recruitment crisis on their hands as well- all things which have the effects of shrinking the industry, or at least slowing down the growth rates.
On the point about shareholder resolutions, sure it would be great if shareholders did vote for that, but due to legal requirements for businesses to maximise returns for shareholders, it’s hard to ever see a fossil fuel company voting to come up with something even 2C aligned (let alone 1.5C) or a climate policy which isn’t just greenwash, and in any case, shareholder resolutions don’t seem to have had much success.
A good case in point is a resolution filed to Barclays last year by Jesuits in Britain (who themselves voted to divest their funds last year, within in a year), calling on it to stop funding fossil fuel projects. This resolution failed by quite some margin (from memory 2-1, I think?), and if getting what seems like a perfectly reasonable request through a bank (granted, the worst in Europe for fossil fuel funding by absolute size) has failed, there’s no way that fossil fuel company shareholders are endorsing climate policies which fundamentally shrink their business massively. This is part of why Oxford’s VC shifted from being opposed to any sort of divestment and supprting engagement with fossil fuel companies to endorsing a partial form (not necessarily as much as many of us in the divestment movement would like, but I think her experience backs up what we had been saying previously, even if she still has an awfully long way to go on this and other issues).