Divestment from fossil fuels is the focus of a campaign among students and other civil society groups that is gathering momentum – and faster, it seems, even than previous campaigns that targeted apartheid, tobacco and arms manufacturers.  Universities are among the institutions to come under particular pressure to withdraw their investments in funds that yield profits directly from fossil fuel exploitation.  But should they do so?

People unpersuaded by the campaign suggest three sorts of reason why not.  The first is that a responsible institutional investor has to consider what would happen if we just were to eliminate all the fossil fuels whose energy we depend on in so many ways, and through so many intricate interconnections of the fabric of the socio-economic relations that sustain our lives and keep us in work.  For the time being, at least, and however much we might personally or even professionally regret it, we should recognize we depend as a society on fossil fuel power. Secondly, investment managers have fiduciary duties to protect returns on investment for their clients, and such duties cannot be subordinated to the political demands of campaigning groups that may not even have any direct stake in the funds.  Continue reading →