One of the most contentious debates taking place on college campuses around the country revolves around the call for universities to divest their endowments from companies in the fossil fuel industry. NYU Divest recently called on potential benefactors to stop donating to NYU until the university divests from “the top 200 coal, oil and gas companies.” With over 2000 individuals and 400 institutions pledging to pull their assets from the fossil fuel industry, this is a cause that is clearly gaining significant traction, but the significance of this movement is not at all apparent. In fact, divestment will likely have no significant financial effect on the fossil fuel industry and distracts the public from more concrete reforms that can be made to combat climate change.

Divestment websites commonly refer to the divest campaigns against the South African Apartheid regime as an example of successful reform spurred by college divestment. However, the academic literature on the subject is far from conclusive. In fact a report published in the University of Chicago Journal of Business found that “valuations of targeted companies or even the South African financial markets were not easily visibly affected.” The South African case is also distinct in that the end goal of the movement was much more clear: to halt investment until Apartheid policies collapsed. There is no comparable solution to the fossil fuel campaign; fossil fuels still make up 82 percent of U.S. energy consumption and it’s unclear how divestment will alter that paradigm.

To their credit, many divestment activists acknowledge the limited economic impact that their campaign will have on the fossil fuel industry — NYU Divest concedes as much on their website. Instead, they say their movement is a symbolic protest to raise awareness. This perspective unfortunately ignores the real effect shareholders can have in creating positive change in companies they own a stake in. Following the 1989 Exxon Valdez oil spill, pensioners who owned $1 billion of company stock successfully pressured Exxon to accept an environmentalist on its board and increase spending on environmental research. By giving up its stake in the fossil fuel industry, NYU sells away its voice and ability to shape industry practices to investors that are less environmentally conscious.

Perhaps the most significant harm that the divestment movement poses is that it deceives the public into thinking that pulling investment from an industry is an important step towards creating reform. Already we see a proliferation of divest campaigns that target private prisons, Israeli defense and poor labor practices, but do little in terms of pushing for tangible change. Promoting government investment in clean energy, phasing out fossil fuels from our own institutions and calling for legislation that curbs carbon emissions are all much more direct ways of tackling climate change. If we want to create substantial reform in our society, we have to move away from symbolic dissent and fight for the changes we truly need.

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A version of this article appeared in the November 23 print edition. Email Anand Balaji at [email protected]