This blog has highlighted the folly of colleges divesting their fossil fuel investments in the past (see here and here), but recent research has shown just how much it is likely to cost them in the future.
The IPAA study, called The Divestment Penalty by Caltech Prof. Bradford Cornell has calculated how much a group of five top-flight universities stand to lose each year if they follow a policy of divestment.
It’s a long read, but a key finding in the report shows that the five universities chosen for the study – Harvard, Yale, MIT, Columbia, NYU, and Yale – would stand to forfeit $195 million each year in investment returns alone.
What’s more, the study adds that over a 50-year time frame for these five universities, the value of a divested portfolio would be 23 percent lower than a non-divested portfolio. Almost a quarter of a university’s portfolio value would be wiped out. That is money that, as Harvard president Drew Faust commented, would be spent on advancing academic goals.
The study confirms that millions of dollars would be forfeited if universities divested from fossil fuels – losing out on funds that go towards improving the education of millions of college students every year.