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. For example, in her statement to the Harvard community, President Drew Faust belittled the tactic, writing that “divestment is likely to have negligible financial impact on the affected companies.” Her point is true—and irrelevant. No one has ever claimed otherwise. The key to divestment’s power is not that it robs companies of phantom pennies, but that it forces individuals and institutions to confront the moral dilemma of accepting cash from truly destructive firms. And, when sustained, it can jolt a paralyzed political system back to life.
Let’s examine the first effect. According to the traditional “Wall Street Rule” investors signal their approval of management by holding stock and their disapproval by selling it. By receiving millions of dollars in dividends and returns from companies determined to drill for more fuel no matter what the damage to the climate, Harvard is very publicly endorsing their business mission and model.
The argument over effectiveness is often used to distract us from the deeper debate over hypocrisy. No one would argue today that if the sale of a single plantation could not, by itself, have ended slavery, then Harvard would have been morally justified to remain an owner in such a genocidal enterprise. Climate change has already turned deadly, threatening the homes and lives of hundreds of millions of human beings through storms, drought, disease, and sea level rise. If benefiting from a genocidal practice like slavery was wrong 150 years ago, why should profiting from the suicidal behavior of the fossil fuel industry be acceptable today? Harvard’s willingness to rely on the dividends and stock appreciation from companies openly committed to a path of unprecedented destruction in its endowment taints its mission, its values, and its core identity.
Equally important, we know from history that divestment is, in fact, effective in creating political change. We must remember that there is a difference in impact between a solitary act of conscience and a cumulative campaign. Though no single vote is likely to decide a national election, cumulative votes do. No one believed in the South African case that an individual act of conscience would succeed by itself. But history demonstrates that acts of leadership and conscience could aggregate into political transformation in the United States and then in South Africa.
Because of South African divestment, hundreds of universities, religious institutions, foundations, and other leadership organizations were forced to address the question of their ties with major corporations whose behavior in South Africa contradicted the investors’ own mission and values. This steadily changed the views of U.S. political leaders and brought direct pressure to bear on American firms to end their material and financial support of the South African military.
The pressure took many forms. Ned Regan, the comptroller of New York State and the sole trustee of the New York State Common Retirement Fund with more than $20 billion in assets declined to divest, began appearing at the annual meetings of major corporations demanding that they withdraw from South Africa. Later, the U.S. Congress, in which the Senate was controlled by the Republican Party, passed massive new sanctions through the Comprehensive Anti-Apartheid Act of 1986. President Reagan vetoed the bill on the grounds that the white government had been an important ally against communism. In an astonishing act of political rebellion within a single party, Senate Republicans listened not to their popular president but to the national outcry triggered by violence in South Africa and by the calls for divestment—and they chose to override his veto.
Because of divestment, major companies like Ford, General Motors, and IBM—many of which were the largest employees in the country—announced their withdrawal in 1988. This deeply rattled the self-confidence of South Africa’s business leaders, who then met with South African president F.W. de Klerk and demanded a negotiated settlement with the African National Congress. In the aftermath of Nelson Mandela’s release, he and many other leaders—on all sides of the political spectrum—pointed to external economic pressure as a key component in undermining the National Party’s half-century grip on power.
The struggle to bring a peaceful end to apartheid took an enormous effort, beginning with the brave work of South African leaders themselves, backed up by international support that emerged from the ground up and forced Western nations to reject their previous support for the National Party government. Divestment triggered first a moral struggle within the hearts of individuals and institutions, and then a massive national debate that fundamentally altered American policy. That—and not a tiny fluctuation in stock price—is the goal of the fossil fuel divestment campaign.
Harvard, which occupies the center stage of American higher education, has a special obligation to its own history, to its students and alumni, and to the people of the planet to step forward, to end its willingness to profit from fossil fuel, and to lead the movement to confront the devastation of climate change. Every brick in Harvard Yard testifies to the university’s praise of intellectual boldness and moral courage in the past. Today, in the present, Harvard must display the courage of its own convictions by choosing principle over profit and by embracing divestment, a historically proven pathway to success.
The Rev. Dr. Robert K. Massie is the president of the New Economy Coalition. He received his doctorate from Harvard Business School in 1989, directed the Project on Business, Values, and the Economy at Harvard Divinity School from 1989-96, and has served as a fellow at the Kennedy School and Law School at different points in his career. He is the author of the comprehensive history of the divestment movement, Loosing the Bonds: The United States and South Africa in the Apartheid Years, published in 1998.