While scientists across the board recognize the long term dangers that arise from not addressing climate change, Stanford divesting from fossil fuels is impractical, hypocritical and distracts us from more effective measures we could employ to combat climate change. Instead, Stanford should work to reduce its own carbon emissions.

Stanford’s statement on investment responsibility explains that the University Trustees’ primary goal is to “maximize the financial return,” while avoiding companies that cause “substantial social injury” is their secondary goal. When deciding to divest on fossil fuels, it is important to balance these two priorities.

On-campus proponents of divestment from fossil fuels reference “Stanford Out of South Africa,” a movement in the 1970s  and 1980s that convinced Stanford to partially divest from companies that operated in apartheid South Africa. This movement was justifiable because the situation in South Africa was abhorrent, and divestment posed minimal risk to the endowment’s ability to provide students and faculty with the best possible education and research. Divestment from South Africa did not substantially affect the endowment because South African companies likely represented an extremely small share of Stanford’s endowment.

This is likewise true with Stanford’s decision to divest from coal companies. Only 100 companies’ shares were sold, representing a small percentage of the university’s holdings, according to Stanford’s associate vice president for communications, Lisa Lapin.

Unlike divestment from coal and South Africa, divestment from all fossil fuels – including oil and natural gas – will most likely have negative repercussions for growth of the endowment. President Hennessy estimates that anywhere between “1 – 10 percent” of the endowment is invested in fossil fuel companies or mutual funds that have stock in fossil fuel companies. Purging the endowment of all fossil fuel related investment will likely destabilize the endowment and restrict its ability to diversify its investments.

To counter this, some proponents for divestment claim that divestment will yield more revenue because fossil fuel stocks are volatile, and they can underperform divested portfolios. However, Stanford’s continued investment in fossil fuels indicates that the University believes that investing in fossil fuels will lead to diversification of investments, as well as desirable levels of risk and return.

Additionally, Stanford’s divestiture will have minimal financial impact on fossil fuel companies. Even if Stanford had the maximum amount – 10 percent – invested in fossil fuel companies, that would be about $2 billion in a multi-trillion dollar industry. Stanford’s sold shares would undoubtedly find another buyer; the price of the stock may temporarily drop, but Stanford divesting its shares will have a marginal effect on coal stock.

But more importantly, by selling our shares we eliminate any voice we would have within the industry. As shareholders of fossil fuel companies, Stanford has more influence over the companies than it would otherwise.

For example, Ceres is an organization which mobilizes investors to “accelerate and expand the adoption of sustainable business practices.” This organization works with about 130 investors who have assets worth trillions of dollars and encourages them to work with companies they invest in to mitigate the companies’ environmental harm. This organization does not pursue methods of divestment, and it works. Through Ceres, investors who represent over $1.75 trillion in assets released a nine-point climate change action plan that will increase their investments in green energy and clean energy.

Solving climate change will not happen unilaterally. If we want to stop climate change, we will have to work with the institutions that are primarily responsible for carbon emissions: fossil fuel industries.

Rather than focusing on our endowment, we should focus on reducing Stanford’s own carbon emissions. The university currently emits more than 181,000 metric tons of CO2 annually. To put that number in perspective, it is equivalent to the annual greenhouse gas emissions produced by roughly 38,000 passenger vehicles. Furthermore, Stanford has increased its carbon footprint by 13,000 metric tons of carbon dioxide since 2006, according to Stanford’s emission inventory.

Fortunately, Stanford has undertaken many projects to reduce emissions, such as the Energy Retrofit Program and Stanford Energy System Innovations (SESI) and has won several awards for its efficiency improvements. But there is more work to do. Substantially reducing our carbon emissions would go a long way and send a clear message that Stanford is serious about stopping climate change. Last May, by divesting from coal, the University created a national dialogue about climate change and the use of fossil fuels. However, the conversation created by a dramatic reduction in carbon emissions would be even larger.

This April, we should petition to have a referendum that demands the university to take action against climate change by halving all carbon emissions before 2020. Stanford is one of the world’s leading research institutions in the field of energy; I am certain we can achieve this lofty goal.

Contact Matthew Cohen at mcohen18 ‘at’ stanford.edu.