An industry-funded study has concluded Harvard would lose up to $108 million in investment returns per year if it divests from fossil fuel companies.
The study said other schools with large endowments would also stand to lose millions if they cut their holdings of oil, gas and coal companies, including Yale ($51.1 million), the Massachusetts Institute of Technology ($17.8 million) and Columbia ($14.4 million).
Over 50 years, according to the study, the schools’ endowments would shrink a combined 12.07 percent if they divest.
The study, from a California Institute of Technology professor and commissioned by the Independent Petroleum Association of America (IPAA), is the industry’s latest weapon in the fight over divestment, a movement that has seen several major American colleges and international institutions end their investments in fossil fuel companies.
Industry groups have pushed back against the movement, warning it would hurt institutions’ finances more than it would help combat climate change, which is often the goal of those backing divestment.
“If climate change is a first order problem, divestment is a very bad idea,” Bradford Cornell, the study’s author, told Bloomberg on Thursday. “This solution not only has a cost, it has no benefit.”
Regardless, several schools have chosen to divest in recent years. Georgetown University cut its endowment’s minimal coal holdings in June, a move that Stanford University took a month earlier. But other schools, such as Santa Clara University, have declined to divest despite a push from students to do so.
Divestment isn’t only a college issue, however. California lawmakers voted this week to divest its pension funds from coal, something Norway did earlier this year.
Divestment adovates hit back against the study on Friday.
"No one takes something like this seriously — because the words 'petroleum-funded study' say it all,” said Karthik Ganapathy, a spokesman for the group 350.org.
“Of course Big Oil paid for a study to show it's a bad idea to pull money out of Big Oil, but when you look at analysis from actually credible sources like the Associated Press, it's clear that divestment from the fossil fuel industry could actually save money, big time. California's pension funds know that, Norway's sovereign fund knows that, and institutions around the world cutting ties every day with the likes of Peabody and Shell know it too.”
—This post was updated at 1:47 p.m.