TO THE EDITOR:
The article “Ignoring expenses, UNC says it will divest in coal” published March 4 claimed removing investments from fossil fuel companies — something UNC is not currently pursuing — “comes with a financial burden.” However, this is an issue that any academic would say is still up for debate.
Why else would hundreds of student groups at universities around the country be working with their administrators, trying to gauge the effectiveness of divestment as a tactic for tackling climate change? Sure, the Independent Petroleum Association of America, the group cited in Wednesday’s article, which has represented oil and natural gas producers for more than 80 years, would think that any divestment from fossil fuels would be harmful. And yes, maybe coal divestment does increase risk. But by how much?
The Aperio Group, an SEC-registered investment advisor (not an industry front-group), found that screening the top 15 coal companies from a typical investment portfolio would result in a 0.0006 percent increase in absolute investment risk — essentially a statistical rounding error.
And returns? An investment manager, Impax Asset Management Group, found that excluding all fossil fuel companies over the last seven years would actually have a small positive return effect. It seems that the financial consequences of divestment are not so certain.
What is certain are the risks of climate change and the decreasing environmental returns of fossil fuels.
If Stanford, University of Maine, the Rockefeller Brothers Fund, Brevard College and even Natalie Portman think that there is enough evidence to divest, UNC should consider it as well.
Tait Chandler
