BILL MOYERS:
Welcome. For growing numbers of people, the
reality of global warming is so urgent they’ve
given up waiting for governments to act, and
they’ve decided it’s folly to expect the
coal, oil, and gas companies ever to admit
their products are burning up the earth. So
these aroused citizens are going for the
jugular – they’re directing their efforts
directly at the one place held sacred by the
industry -- the bottom line.
 
It’s called divestment. A campaign to persuade
investors to take their money out of fossil
fuel companies. Foundations, faith groups,
pension funds, cities and universities are
being urged to take the lead, to sell their
shares in polluting industries and go “fossil
free.”  
On more than 300 college campuses, from Middlebury
in Vermont to Berkeley in California, students
are calling on their schools to divest. Sometimes
they are rebuffed, as happened recently at
Harvard, which at over $32 billion dollars
has the largest university endowment in the
country. Last fall, the school’s president
said divestiture was neither, “warranted
or wise.” But this month, nearly 100 faculty
members sided with the students. They said,
“Our University invests in the fossil fuel
industry […] We now know that fossil fuels
cause climate change of unprecedented destructive
potential.”
 
Divestment has worked once before – and
in a big way. Three decades ago, students,
religious communities, and unions sustained
a campaign against U.S. companies doing business
with South Africa and helped put an end to
apartheid. Only four months after his release
from prison, Nelson Mandela came to California
to say “thank you” to Americans who kept
up the economic pressure.
With me now are two people who are leaders
of this new divestment movement. Ellen Dorsey
is executive director of the Wallace Global
Fund and a catalyst in the coalition of seventeen
foundations known as Divest-Invest Philanthropy.
Its members have agreed to pull out of fossil
fuel stocks and invest in companies committed
to climate change solutions.
Thomas Van Dyck, a self-described child of
corporate America, was so convinced of the
power of socially responsible investing that
he’s made a career out of it. He’s now
senior vice president, financial adviser of
RBC Wealth Management, and board chair of
As You Sow, that’s a shareholder advocacy
foundation.
 
Welcome to both of you.
THOMAS VAN DYCK:
Thank you for having us.
BILL MOYERS:
Skeptics say your campaign to divest is a
flea on the tail of an elephant, a nuisance
to the fossil fuel industry, but no real threat.
How do you respond to that?
ELLEN DORSEY:
Frankly, four years ago, I was incredibly
pessimistic that we could have any impact
on this climate change issue. In 2009, the
governments of the world failed to come to
any kind of meaningful agreement at the Copenhagen
meeting.
In 2010, climate legislation failed in the
US Senate. And into that vacuum stepped a
student movement. And they did take a play
from the anti-apartheid playbook. And they
said we're putting the focus right on the
industry itself. And because the industry
is driving the problem, it is funding denial
of the problem. It is refusing to advance
safe and clean alternatives. And it's shutting
down the policy process with campaign contributions
and lobbying. And so by putting the target
on the fossil fuel industry, the goal is not
to have an immediate economic impact on the
fossil fuel industry but to isolate it as
a moral pariah like apartheid, like tobacco.
THOMAS VAN DYCK:
Remember in South Africa days, they said,
look, divestment doesn't make any sense. And
then Desmond Tutu said, we don't want our
chains made more comfortable. We need to have
people pull out, to help with the economic
transition of that society. I think divestment
from fossil fuels is the same. Their vision
of what the planet looks like and the idea
of being able to drill and burn all the fossil
fuels that they have on their balance sheets
today is just something that civilization
cannot survive.
ELLEN DORSEY:
The fact that ExxonMobil has come out, albeit
with a ridiculous report on their stranded
asset risks, they're already on the defensive.
They're already having to defend their position
on climate change. And that's success. That's
movement. It's progress we haven't seen to
date.
BILL MOYERS:
What's the best argument made against what
the two of you are asking college and university
endowments to do? The one that impresses you
although you don't agree with it.
THOMAS VAN DYCK:
The one that doesn't work is that it costs
return. That one I'm not impressed with at
all. Because there's no need for the endowments
to give up return for divesting from fossil
fuels. With apartheid, we literally asked
foundations and pension funds to remove 40
percent of the S&P 500 from their portfolios.
That's a heavy lift. 40 percent of the S&P
500. In the case of the Carbon Tracker 200,
which is the 200 largest carbon-producing
companies, which is what the students are
asking the endowments to remove, that only
represents about 7.8 percent of the S&P 500.
So it's a much smaller lift.
ELLEN DORSEY:
My foundation is divested from fossil fuels.
And we're invested over 10 percent of our
assets in clean tech and renewables. We've
done quite well in the market. As a case study,
we demonstrate that there's no impact. I think
the argument that some universities have made
around what should they be investing in. If
they divest from fossil fuels, what should
they be investing in? I think that's a legitimate
question to be asking. But I would actually
turn that on its head and say, when we begin
to move the assets, we will be catalyzing
the innovation and the energy future that
the world demands. And that they should be
playing a role in that, particularly academic
institutions because they are the center of
innovation, and research, and education, and
the training of the leaders of the next generation.
They're precisely the ones that should be
trying to create that kind of new-- those
new models. Those new energy models, those
new investment models. And I think foundations
also have a very important role. Our investments
should be a kind of venture capital to create
that innovation in investments.
BILL MOYERS:
Take Harvard. It's the big fish in the pond,
$32 billion in endowment. The president of
Harvard says that what you two want, she didn't
call you by name but you can imagine who she
had in mind, is unwarranted and unwise; that
it would come at a substantial economic cost
to the university. Then there’s Bowdoin
College, small college in Maine with a billion
dollar endowment. And the chief of Bowdoin's
billion-dollar endowment says divesting would
have cost the college $100 million over the
last decade. And I suspect if she were sitting
here, she would say to you, Tom Van Dyck,
wouldn't that be fiducially irresponsible
on my part?
THOMAS VAN DYCK:
I would say that's bad math. I'd say you don't
have creative enough people running your money
for you if that's the case. What is a problem
is you have these different hedge funds that
they're involved in that have particular funds
that they can't control what's actually held
in that. And so they're worried they'll have
to fire that particular hedge fund.
BILL MOYERS:
And they don't like to do that--
THOMAS VAN DYCK:
And they don't want to do that.
BILL MOYERS:
--particularly if they’re producing good
returns.
THOMAS VAN DYCK:
But if enough endowments get together and
say, hey, why don't you set up a sleeve that
is fossil-fuel free, and you can short the
coal companies, and, you know, and go long
the solar companies, and you can hedge that
if you want? But you just can't be buying
the top 200 companies.
My guess is, is given the size of that market,
that those hedge funds would say, sure, we'll
set up a sleeve for you guys. You know, we'll
humor you. And if they put pressure on their
managers to do that, my guess is the managers
will do that. Right now, they're not willing
to take that next step and pressure those
managers. All they need to do is ask.
ELLEN DORSEY:
I would also argue that looking back over
the past ten years, we've seen dramatic changes
in the financial markets. And I think it's
problematic to try and look at the past ten
years and predict the future. And if you look
at the case studies of the institutions like
my foundation and other foundations that we're
partnering with that have in fact divested
from fossil fuels, invested in climate solutions,
renewables, and clean tech, we‘ve done very
well in the market in the near term, short
term. And we're confident when you look at
the projections for renewables and you look
at the risks, the financial risks of staying
invested in fossil fuels over the long term,
I feel like we are making the right bet. We
are the ones investing in the future, and
we'll do well and have done well.
THOMAS VAN DYCK:
And I do think coal is a precursor to that.
I mean, if you look at what coal has done
for the last four or five years, coal has
dropped dramatically. It's a very poor-performing
asset.
BILL MOYERS:
In the market?
THOMAS VAN DYCK:
In the market.
BILL MOYERS:
Price, shares, too?
THOMAS VAN DYCK:
Oh yeah, it's absolutely been crushed. And
we think that oil could be-- that could be
a precursor to what might happen to oil in
the next decade or so. So it's really about
looking at the fiduciary risk and the valuation,
because if these oil companies don't responsibly
deal with that, there's going to be a risk
there associated with owning those companies.
ELLEN DORSEY:
But let me shift gears a little bit. Because
you raised this issue of fiduciary duty. And
I would argue that any institution that receives
charitable tax status because they serve the
public good has to look at whether their investments
are, in fact, serving the public good. And
there could not be a, arguably, a more stark
case about the role of the fossil fuel industry
in driving climate change.
And if you have a mission to protect the public
good, climate change will impact that dramatically,
whether your focus is education, whether your
focus is the environment, whether your focus
is human rights. Climate change will impact
your mission as a charitable institution.
And so I think as a fiduciary matter, to protect
your mission, you should be looking at your
investments in fossil fuels. And when you
couple that with the financial risks associated
with staying in fossil fuels over the long
term, because as a fiduciary, you're to be
looking at the long term viability of your
investments. I think the ethical and the financial
align in a pretty powerful way.
BILL MOYERS:
But I've heard foundation executives say,
you know, we get it, Ellen. We-- and Tom,
you're asking us to take the high road. But
to do the Lord's work, we need to get the
highest return on our investments. And those
fossil fuel companies deliver it. Should they
take the high road at the risk of doing less
of the Lord's work, less of their mission?
ELLEN DORSEY:
I don't think that is the right framing, because
I don't think they sacrifice returns. So I
would contest that--
THOMAS VAN DYCK:
No, nothing out there financially that demonstrates
that. So if you look back in time, in all
the information that's out there, it doesn't
support the fact that you have to give up
return. It's something that they're hiding
behind, as opposed to acting.
And that's part of the problem. For years,
they've said that if you do socially responsible
investing, you’re going to have to give
up return. But in fact, having strong environment,
social, and governance practices as a management
team is actually best business practice, is
what it is.
ELLEN DORSEY:
But I would argue something else. If you're
a foundation and you're-- actually whatever
your mission. But particularly if your mission
is human rights or environment, how is it
possible that you can have your investments
undercutting the work of your grantees? If
your investments are driving the problem that
you're asking your grantees to solve, that's
a problem. Those should be aligned, your investments
and your grant making.
BILL MOYERS:
Here's what one foundation executive would
say to that. I talked to him last week. And
he said, ask them how anyone's hands can be
completely clean in a society as capitalist
as ours.
THOMAS VAN DYCK:
I think that's a fair question. I mean, society's
addicted to oil. And we need to get off of
it. And we need to start moving aggressively
in that way.
ELLEN DORSEY:
There is nothing that would stop the fossil
fuel industry from using the capital expenditures
that it's currently-- the amounts of capital
being expended for new fossil fuel energy.
There’s nothing that would stop them from
instead shifting that to clean and safe energy
sources. There's nothing stopping them from
doing that. However, they're not. That says
that we need to take action.
THOMAS VAN DYCK:
Fossil fuel companies receive $1.9 trillion
in subsidies globally on an annual basis.
So here's this very, very profitable industry
being funded by governments around the world
to the tune of $1.9 trillion to basically
drill more oil. So they're saying, nothing's
going to stop us. We have the regulators in
our pocket. They're not going to make us change.
BILL MOYERS:
The scientific community says that to avoid
possible catastrophe, we have to stay below
two degrees celsius of warming, right?
THOMAS VAN DYCK:
Correct.
BILL MOYERS:
And to stay at that level, we cannot release
more than 565 gigatons of carbon dioxide in
the future. But the fossil fuel companies
have nearly five times that amount of coal,
oil, and gas reserves of which they would
have to leave 80 percent in the ground if
they didn't take us-- if we don't go over
the edge to catastrophe. Are you asking them
to walk away from billions of billions, maybe
trillions of dollars that are stored in the
earth?
THOMAS VAN DYCK:
And that's the risk to investors. It's because
they can't burn that without having huge cost
to society, to other businesses, to the way
of our life, to people all around the planet.
So that's why we're saying, look it, investors,
there's a huge risk here. Because the governments
aren't going to tolerate allowing the fossil
fuel companies to wreak this type of havoc
on civilization.
BILL MOYERS:
But you don't leave that much money in the
ground. You wouldn't bury it in your backyard,
which in effect is what you're asking them
to do.
ELLEN DORSEY:
We don't have a choice. We don't have a choice.
And it's not really a question of what the
fossil fuel industry is going to do with their
reserves. It's a question of what we as a
global society are going to do to orchestrate
the energy transition that we need. If they
burn those reserves, we cook the planet irreparably.
That can't happen.
And what is so powerful about this movement
is that it is a true alignment between ethical
and financial interests. Because not only
must we act to stop the worst excesses of
climate change, but financially, it's the
smart thing to do. We have to deflate that
bubble before it bursts.
BILL MOYERS:
I saw research recently from the University
of Oxford, that studied divestment movements,
earlier divestment movements, against the
arms industry, the pornography industry, the
gambling industry, and concluded that their
direct financial impact on price shares was
small. What makes you think this time is different?
And how many billions of dollars would it
take for you to nuke the energy business?
I mean, to really make them hurt?
THOMAS VAN DYCK:
Making them and making society realize that
we have to get off of our addiction to oil
is really the key. That we have to remove
oil or limit oil or use it much more responsibly
than we do today. As we-- it can be measured
in billions of dollars. But really what it
is is say look, take your capital expenditures
and invest them in something in clean technology,
broadly defined.
Now I don't want to just think-- not just
solar and wind, very broadly across the entire
economy. If the oil companies took their excess
capital and did it, that would be a good thing.
If the governments would take their subsidies,
$1.9 trillion dollars and move it from fossil
fuels and give it to clean technology, energy
efficiency, buildings, LED lighting, promoting
that, you could get catalytic change, significant
innovation, job creation, and you wouldn't
be affecting, you know, people who are generally
economically disadvantaged.
So I think that it's not just about measuring
how much the company drops its access to capital.
These are very, very wealthy companies, which
is one of the reasons why we're trying to
turn them into a moral pariah. Because yes,
we all do use oil for now. But we need to
start using it much more wisely. And we're
going to have to make some choices. And we
need to spur that type of innovation, like
we did under Kennedy to go to the Moon, we
need to spur the same innovation to create
a sustainable economy that's based on the
energy of the future, not on the energy of
the past.
ELLEN DORSEY:
And Bill, that same Oxford study that said
that there was not always an immediate economic
impact from the divestment activity ultimately
concluded that there was powerful political
impact in many of these campaigns, including
the apartheid campaign. And that's ultimately
what we need is to put a price on carbon.
And we need to have a policy process that
can be successful and is not captured by the
influence of the fossil fuel industry. And
that's, I think, the big play, at stake.
BILL MOYERS:
Do you ever stop to think, why are we having
to do this? Why do we have to pressure corporations
to be good stewards of the Earth and in this
case of the future? I mean, shouldn't this
be happening from within them?
THOMAS VAN DYCK:
Yes. And it is happening from within some
corporations. So, for example, the corporations
that are using lots of electricity right now,
okay? They can go out and get a power purchase
agreement for 20 years on renewable power,
solar or wind. And they can lock in a price.
If I have a huge electrical cost and it’s
bouncing all over the place because of natural
gas, I can't go out and lock in natural gas
for 20 years right now at six cents a kilowatt.
I can lock in solar and wind between six and
ten cents a kilowatt. But I can't lock in
natural gas. So my cost line goes all over
the place. If I'm a business, what I care
about is certainty. What I don't like is risk.
Tell me what the price is. Tell me what it's
going to be for a long, long time. And I can
model that. Put a tax on carbon. Make it 25
bucks a ton. Increase it $10 a ton a year
for 20 years. That'll push it to $225 a ton.
If that happens, I can model that. I can model
my expenses. What I don't want is uncertainty.
If you give me certainty, I can model that
and allocate capital accordingly in investments
that can make a difference.
BILL MOYERS:
And climate change is nothing but unstable
and uncertain.
THOMAS VAN DYCK:
That's right. And it creates more uncertainty,
which drives corporations crazy. And the innovators,
the best businesses are already realizing
if they use their resources more efficiently,
more productively, more sustainably, that
they'll beat their competition within the
very same industries. And they're outperforming.
Because it’s best business.
13:26:00;02 It’s ultimately best business.
ELLEN DORSEY:
Here's another reason why I'm so excited.
This is a corporate accountability movement,
truly. In its purpose. And if you meet with
the leaders, the student leaders of this movement,
some are business students, some are political
science students. They are extremely sophisticated.
They can sit down and talk to you about everything
related to the climate science to market trends
for renewable energy.
And they are part of a movement that is bringing
about change, but will also be moving forward
as corporate heads in the future. They are
going to be our elected officials. They're
going to run NGOs and foundations. And they
will have cut their teeth on this movement.
And they will believe that corporations can
do it differently. They will believe that
we as a society should demand that corporations
meet a certain level, a minimum level of performance,
in terms of environmental and human rights
impacts. So I am optimistic. When you meet
with these students, you can't help but be
inspired, when you think that they're going
to be the ones that will run the energy companies
of the future. And if you look back--
BILL MOYERS:
If there is a future.
ELLEN DORSEY:
Let's--
THOMAS VAN DYCK:
Well, I mean--
ELLEN DORSEY:
Absolutely.
THOMAS VAN DYCK:
One of the students--
BILL MOYERS:
I'm not being facetious, given what--
ELLEN DORSEY:
No.
BILL MOYERS:
--you all have said.
THOMAS VAN DYCK:
No, I mean, and it's—
ELLEN DORSEY:
There’s a future.
THOMAS VAN DYCK:
And given what the Intergovernmental Panel
on Climate Change says. I mean, if you read
the facts, of what they say the warming climate,
what will happen. One of the students that
we were with was from Harvard. And she actually
said, you know, for the first time in our
history, unlike with the Civil Rights Movement,
where you saw Bull Connor, you know, and the
dogs, you know, hitting and beating the blacks.
Where you--
ELLEN DORSEY:
Or apartheid, where you saw the--
THOMAS VAN DYCK:
Or apartheid.
ELLEN DORSEY:
--the battles in Soweto.
THOMAS VAN DYCK:
Right. Or where Vietnam was brought into our
living rooms, where you can actually see the
direct consequences of what our actions are
so that we change. In this case, we are actually
going to have to react prior to experiencing
the full consequences of it. But we must remember,
nature bats last. And we have to react before
that happens.
BILL MOYERS:
But isn't it terribly hard to get people to
act on what they don't see and we can't see?
THOMAS VAN DYCK:
Well, that's the challenge. That's the challenge.
And as Desmond Tutu said, I think it's true,
you know, custodians of creation. And this
is where, I think, the religious do play a
role in this. As custodians of creation, that
is not an empty title. We are stewards of
God's Eden here.
And interestingly enough, God has showed us
through the powers of nature how we can actually
create power through using the sun and wind
and things that are ubiquitous. That we can
tap it through our innovation, by using our
mind to figure that out. Doing it cleanly,
efficiently, and sustainably, rather than
owning a commodity, drilling it up, charging
people for it, and ending society as we know
it.
That's the juxtaposition. And the students
are like, this is cleaner. Creates more jobs.
It's more sustainable. It doesn't exploit
the poor and the underdeveloped countries.
And actually, you can get solar and wind at
a much cheaper price than you can some of
these oil-- and it doesn't pollute. It's much
cleaner.
ELLEN DORSEY:
And if we can't get our government to lead
and to take effective action, then we do need
the universities, the faith groups, the foundations,
the pension funds to take catalytic action.
And that's really what calling for divestment
from fossil fuels and investment in climate
solutions, the energy sources of the future
is what this is about.
BILL MOYERS:
Tom, Ellen, thank you very much for being
with me today.
THOMAS VAN DYCK:
Thank you, Bill.
ELLEN DORSEY:
Thanks for having us.
THOMAS VAN DYCK:
We appreciate it.
BILL MOYERS:
At our website BillMoyers.com, there’s ongoing
coverage and analysis of global climate change
issues. And you can find out much more about
the fossil fuel divestiture campaign.
That’s all at BillMoyers.com. I’ll see
you there 
and I’ll see you here, next time.
