The University of Wisconsin Divestment Coalition is a new state-wide organization formed by students to demand that all 13 of the UW System schools begin a just divestment from fossil fuels. Through the unity of student groups, faculty and alumni throughout the UW System, their mission is to convince the Board of Regents that universities must stop funding the climate crisis, and remove all money invested in the fossil fuel industry. Presently, the coalition has student representation from eight of the 13 UW schools, including UW-Madison.
The leaders in this revolution are from younger generations, which is why students from across the system are coming together to lead this fight. The goal of UWDC’s divestment campaign is to gain transparency of all $7 billion worth of UW System investments, an end to all fossil fuel investments and responsible reinvestment in clean energy solutions. This will not be the first call to divest the UW System from fossil fuels, but this is the first state-wide, united attempt.
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Fossil fuel divestment is the act of removing investments from the fossil fuel industry. Together, UWDC is requesting the disclosure of all $7 billion of UW System investments, an end to all fossil fuel investments.
While universities boast their dedication to sustainability, students are concerned by slow and incremental climate efforts which avoid creating truly transformative change. The time for partnership is now. Students must urge universities to do their part in combating the climate crisis.
One of the primary advantages of a campaign like UWDC’s is that systemic divestment changes market demand.
Peabody Energy Company, the largest private-sector coal company in the world, stated in 2014 Federal Securities and Exchange Commission documents that fossil fuel divestment could, “significantly affect demand for our products.” By 2016, they had already declared bankruptcy. In 2018, Shell oil company stated that divestment poses a “material risk” to their company.
Divestment follows changing consumer preferences, lowering the value of fossil fuel industry shares. Because of this, fossil fuel divestment is a legitimate strategy to fight the climate crisis.
Some administrators have also accused divestment campaigns of politicizing endowments, because in their eyes, a fiduciary obligation, the duty an investor has to their beneficiaries, means one thing — the highest rate of return possible. Though this is a reckless and narrow mindset, divestment actually optimizes growth. In June 2020, UWDC held a meeting with Dr. Claire Brown, an economics professor at UC Berkeley. Her message was clear, “fossil fuel investments create low returns and high volatility.”
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Within the last decade, S&P 500 companies collectively have almost tripled investment returns. When S&P energy companies like Exxon and Chevron are isolated, however, investments appreciate by only two percent. Additionally, multiple studies from Aperio Investment Management have concluded that the risk of divestment is 0.0044 percent, appeasing concerns over diversification.
Despite all favorable arguments, divestment remains taboo. To learn why, UWDC contacted the largest fundraising organization in the system, the Wisconsin Foundation and Alumni Association, which invests $4 billion on behalf of UW-Madison. Unfortunately, the coalition encountered deflection.
UWDC is calling all students, faculty, alumni and community members to demand with us that our universities divest from fossil fuels, and be transparent about the seven billion collective dollars we have in endowment funds.
In response to questions regarding how much of the endowment is invested in fossil fuels, WFAA Managing Director of Communications Jessica Arp stated that “WFAA does not release investment information beyond what’s included in our audited financial statements and annual reports.”
UWDC’s repeated requests for a meeting have yet to be satisfied.
The coalition later obtained a 2013 report from the Madison Faculty Senate Ad Hoc Committee on Fossil Fuel Use and Climate Change in which the group advised against divestment, stating that, “According to the UW Foundation, many major donors to the University have already expressed their strong disapproval of divestment, and major donors would withhold their support [if the System were to divest].”
Instead, the committee advised that the Foundation provides “investment options that are more consistent with donor choice and free-market principles than divestment ordered from the top down.”
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Calls for divestment don’t come from the top, but rather from student activists. Complying with affluent donors at the expense of our future — that is top-down.
In order to be successful, UWDC needs as much support as possible. So far this semester, two new members have joined UWDC from the UW-Madison Campus. UWDC is using outreach strategies to partner with student organizations and faculty that support UWDC’s work. UWDC is always looking to meet with interested students, student groups or faculty members to promote their divestment petition and raise awareness about the importance of fossil fuel divestment.
It is time to finally put an end to universities funding the climate crisis. No UW campuses have committed to fossil fuel divestment yet, which is why student groups, faculty members, alumni, community members and administrators must call on the UW Regents to create new policies that ban fossil fuel investments.
For more information, visit uwdivestment.com, sign the UWDC petition or get involved on a local UW campus. Together, we will divest.
The UW Divestment Coalition is a student-led organization. More information on the UWDC can be accessed here.