Fossil fuel divestment in U.S. higher education: Endowment dependence and temporal dynamics

Abstract

Since 2011, students and others have pushed U.S. higher education institutions (HEIs) to divest their endowments from fossil fuel producing industries. In the past decade, fossil fuel divestment (FFD) has become the fastest growing divestment movement in history, with over 140 U.S. HEIs announcing divestment commitments. We conduct a quantitative analysis of the phases of U.S. 4-year HEI divestment announcements (as well as rejections of divestment) to better understand the dynamics. Announcements began (2012–2017) with a number of schools divesting, followed by a second phase, where new divestment announcements slowed. The third phase, which began around 2019, showed a renewed increase in divestments. Formal rejections of divestment followed a similar pattern in the early years, where rejections were slightly more common and represented more endowment value but have declined as some schools reversed public positions. Schools that have divested from fossil fuels now represent roughly 3% of 4-year U.S. HEIs and 39% of HEI endowment value in our data. Roughly 133% more endowment value is now associated with U.S. schools that have publicly divested from fossil fuels than with those that have explicitly rejected it. Early divestments from all fossil fuels came nearly exclusively from schools with a relatively low endowment dependence (the share of operating expenses derived from the endowment) although qualitative factors were also likely important. We discuss the implications of these findings in the context of different theories of change for the divestment movement. In particular, we note that 99% of 4-year HEIs representing roughly 95% of endowment value in our dataset are less dependent upon their endowment than at least one recently divested HEI, suggesting that large endowment or high dependence on endowment are no longer strict barriers to FFD for most schools.