What is Divestment?

Divestment is the removal of investments made in the fossil fuel industry. Our ask is for MIT to divest.

Many of MIT’s peer institutions have already divested and MIT Divest has received numerous endorsements and has strong support in the MIT community.

Divestment and Climate Change

A substantial shift away from fossil fuels is necessary to stay within the global average temperature increase limit of 1.5-2°C recommended by the Paris Climate Agreement. A study published in Nature indicates that in order to avoid crossing this limit, a third of current oil reserves, half of gas reserves, and over 80 percent of coal reserves must remain unused.

Divestment plays a significant role in the effort to transition our society away from fossil fuel usage and towards more environmentally sustainable practices.

What does divestment actually do?

The primary argument in favor of divestment is a moral one. Investment in fossil fuel companies indicates a condonation of their continued existence and growth, as it comes with the presumption that holding their stocks will provide institutions with financial gain. Divestment signals a refusal to accept these companies’ detrimental actions towards the environment and a refusal to align the investor’s values and future with the fossil fuel industry.

Additionally, divestment generates political momentum towards progressing beyond fossil fuels. Divestment by major institutions such as MIT can help to greatly increase the social stigma around fossil fuels, thus pressuring policy-makers to adopt stronger legislation to combat climate change, and causing companies to implement environmentally-friendly practices.

Divestment is also financially wise. As the divestment movement grows and larger investors pull money out of fossil fuel companies, the fossil fuel industry will feel economic pressure to change. Furthermore, the industry is declining and no longer provides the most profitable investments. Investors should be investing in the future, and the future is rooted in a transition towards sustainable energy. 

While fossil fuel divestment was simply a fringe idea when the movement began in 2011, it has gained significant traction in the past several years. So far, 1118 institutions worldwide, ranging from faith-based organizations to universities to private companies, have either partially or fully divested. These institutions previously held a total of $11.48 trillion in investments in the fossil fuel industry.

Why MIT?

In 2013, a fossil fuel divestment movement began at MIT. Though hundreds of MIT students, faculty, alums, and other affiliates signed the petition asking the Institute to divest, the administration ultimately decided against divestment and instead released a five-year plan to combat climate change.

MIT’s plan of reducing net emissions by 32% by 2030 lags far behind goals set by other universities, as well as behind the pace of decarbonization the IPCC suggests (50% worldwide reduction by 2030) is necessary to avoid catastrophic and irreversible consequences of climate change. Other provisions of the Plan, such as the implementation of “shadow carbon pricing” within MIT have seemingly never been acted on.

Clearly, MIT is failing to act. 

MIT’s behavior exhibits its lack of commitment to solving the climate crisis. Bolder action, at MIT and beyond, is necessary to avoid the worst impacts of climate change, and part of the requisite action is a faster transition away from fossil fuels. The global divestment movement has a significant role in putting fossil fuel companies on the defensive and creating space for progressive climate policy.

It is time for MIT to join the fight!