At the UT Energy Symposium on Tuesday, four experts from around the U.S. debated whether university endowments across the country should divest from fossil fuel companies.

The online session was part of the Energy Institute’s UT Energy Symposium. Two debaters were on each side. Speaking for anti-divest was Bradford Cornell and Brent Bennett, while Dan Cohn and Cutler Cleveland being pro-divest. The two sides were asked to consider the question, “Given the educational and research missions of universities, should university endowments divest investments from companies that extract, transport, refine, sell or otherwise serve in the supply chain of fossil fuels?”

Cornell, finance professor at the University of California, Los Angeles, said the U.S. will eventually need to transition away from non-renewable energy, but divestment from fossil fuel companies is ultimately a “feel-good” approach that will have virtually no impact on global carbon emissions. Therefore, divestment is not worth it for universities because it costs money while failing to meet its intended goal, said Bennett, policy director for Life:Powered, an initiative by the Texas Public Policy Foundation.

“Just look at the energy consumption data for the United States — it’s still 70-80% fossil fuels,” Cornell said. “We will need wise policies to transition away. It’s going to take decades. … So, my view is, we need to work with the fossil fuel companies to transition toward new energy sources, not make them bad guys and have these show divestitures. We just invest the best way we can for our students and our faculty, and we elect politicians and experts to address, at a public policy level, the energy transition problem.”

Bennett said instead of divesting from fossil fuels, universities can spend their endowments on developing low-carbon technologies.

Cohn, global energy transition researcher at the Institute for Energy Economics and Financial Analysis, said universities should no longer invest in fossil fuel companies because it is hard to imagine a future in which the industry is still profitable. Due to increased risk from price volatility, underperformance over the last decade and competition from both within and outside the industry, he said university fiduciaries should consider divesting from a once significant industry.

“The bottom line is … forget the glory days, because past results do not indicate future returns,” Cohn said. “Globally significant investors who collectively manage $40 trillion have already divested from fossil fuels, including recently Princeton University. When you’re a fiduciary at one of these institutions, you’re legally beholden to manage money prudently … (The fossil fuel industry) has lost its financial rationale. So for university trustees, the question is not why divest, but why stay in fossil fuels at all?” 

In addition to financial risk, Cleveland, professor of earth and environment and associate director of the Institute for Sustainable Energy at Boston University, said universities should divest from fossil fuels because not doing so also poses a risk to their reputations.

“Fiduciaries for universities also have a responsibility of care as well,” Cleveland said. “The impact that climate change is going to have on future generations, they are required by law under the duty of care requirement to be considering these factors.”