Divest or engage? Effective paths to net zero from the U.S. perspective

Akbulut, H. (2022). Effectiveness of environmental policies on carbon emissions: A panel threshold analysis. Economics and Business Review, 8(3), 82–108. https://doi.org/10.18559/ebr.2022.3.5 Search in Google Scholar

Atta-Daruka, V., Glossner, S., Krueger, P., & Matos. P. (2022). Decarbonizing institutional investor portfolios. Working Paper. https://www.ecgi.global/sites/default/files/Paper:%20Vaska%20Atta-Darkua,%20Simon%20Glossner,%20Philipp%20Krueger,%20Pedro%20Matos.pdf Search in Google Scholar

Bacow, L. (2021). Climate change: Update on Harvard action. Harvard Office of the President. https://harvard.edu/president/news/2021/climate-change-update-on-harvard-action/ Search in Google Scholar

Badruldeen, M. A. (2021, June 3). The impacts of COVID-19 on oil price in international markets. http://doi.org/10.2139/ssrn.3889713 Search in Google Scholar

Banerjea, S. (2022, October 12). Oil & gas stocks are still good buys, for a number of reasons. Yahoo Finance. https://finance.yahoo.com/news/oil-gas-stocks-still-good-164604388.html Search in Google Scholar

Bauer, R., & Hann, D. (2010) Corporate environmental management and credit risk. The European Centre for Corporate Engagement. http://doi.org/10.2139/ssrn.1660470 Search in Google Scholar

Bauer, R., Koedijk, K., & Otten, R. (2005). International evidence on ethical mutual fund performance and investment style. Journal of Banking & Finance, 29(7), 1751–1767. https://doi.org/10.1016/j.jbankfin.2004.06.035 Search in Google Scholar

Berk, J. B., & van Binsbergen, J. H. (2021, August 21). The impact of impact investing. Stanford University Graduate School of Business Research Paper. Law & Economics Center at George Mason University Scalia Law School Research Paper Series, 22(8). http://doi.org/10.2139/ssrn.3909166 Search in Google Scholar

BlackRock. (2022). Annual report 2021. https://s24.q4cdn.com/856567660/files/doc_financials/2021/ar/online/pdfs/BlackRock_2021_AR_Complete_040822.pdf Search in Google Scholar

Blinken, A. J. (2021). The United States officially rejoins the Paris Agreement. The United States Department of State. https://www.state.gov/the-united-states-officially-rejoins-the-paris-agreement/ Search in Google Scholar

Brandt, W. (1982) The north-south dialogue: The issue is survival. Challenge, 25(4), 22–30. https://doi.org/10.1080/05775132.1982.11470787 Search in Google Scholar

Broccardo, E., Hart, O., & Zingales, L. (2022). Exit vs. voice. Journal of Political Economy, 130(12), 595–632. https://doi.org/10.1086/720516 Search in Google Scholar

Brower, D. (2021). Proxy adviser backs activist call for Exxon Board overhaul. Financial Times. https://www.ft.com/content/e466d1ad-67b7-43e6-9c8f-b79326d28da0 Search in Google Scholar

Chen, J., Toledano, P., & Brauch, M. D. (2022). How much have the oil supermajors contribute to climate change? Estimating the carbon footprint of the oil refining and petroleum products sale sectors. Columbia Center on Sustainable Investment, Columbia University. https://ccsi.columbia.edu/content/oil-supermajors-carbon-footprint-refining-sales-climate-change Search in Google Scholar

Chmielewska, A., & Sławiński, A. (2021). Climate crisis, central banks and the IMF reform. Economics and Business Review, 7(4), 7–27. https://doi.org/10.18559/ebr.2021.4.2 Search in Google Scholar

Cleveland, C., & Reibstein, R. (2015, February 12). The path to fossil fuel divestment for universities: Climate responsible investment. https://doi.org/10.2139/ssrn.2565941 Search in Google Scholar

Cole, S., Gandhi, V., Brumme, C. R, & Rahmani, M. (2020). Background note: Introduction to sustainable investing. Harvard Business School Publishing. http://hbr.org/product/Background-Note--Introduc/an/218072-PDF-ENG Search in Google Scholar

Cole, S., Gandhi, V., Norris, M., & Masko, J. (2021). Public equites impact investing at BlackRock. Harvard Business School Publishing. https://www.hbs.edu/faculty/Pages/item.aspx?num=60048 Search in Google Scholar

Collins, M., Knutti, R., Arblaster, J., Dufresne, J. L., Fichefet, T., Friedlingstein, P., Gao, X., Gutowski, W. J., Johns, T., Krinner, G., Shongwe, M., Tebaldi, C., Weaver, A. J., Wehner, M. F., Allen, M. R., Andrews, T., Beyerle, U., Bitz, C. M., Bony, S., & Booth, B. B. B. (2013). Long-term climate change: Projections, commitments and irreversibility. In T. F. Stocker, D. Qin, G. K. Plattner, M. M. B. Tignor, S. K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex, & P. M. Midgley (Eds.), Climate change 2013 – The physical science basis: Contribution of working group i to the fifth assessment report of the intergovernmental panel on climate change (pp. 1029–1136). Cambridge University Press. https://www.ipcc.ch/site/assets/uploads/2018/02/WG1AR5_Chapter12_FINAL.pdf Search in Google Scholar

Cornell, B. (2015, September 3). The divestment penalty: Estimating the costs of fossil fuel divestment to select university endowments. https://doi.org/10.2139/ssrn.2655603 Search in Google Scholar

Crampton, L. (2022). The Texas Republican fighting Wall Street—and protecting the energy industry. Politico. https://www.politico.com/news/2022/10/12/glenn-hegar-texas-republican-fossil-fuels-00060956 Search in Google Scholar

Crownhart, C. (2022, June 30). The US Supreme Court just gutted the EPA’s power to regulate emissions. https://www.technologyreview.com/2022/06/30/1055272/supreme-court-climate-policy-epa/ Search in Google Scholar

Dalal, A. (2022). Meta-analysis of determinants of venture capital activity. Entrepreneurial Business and Economics Review, 10(1), 113–128. https://doi.org/10.15678/EBER.2022.100108 Search in Google Scholar

DeBenedictis, J., & Park, I. (2017, April 25) Harvard ‘pausing’ investments in some fossil fuels. The Crimson. https://www.thecrimson.com/article/2017/4/25/harvard-pausing-fossil-investments/ Search in Google Scholar

Deeks, L. (2017). Discourse and duty: University endowments, fiduciary law, and the cultural politics of fossil fuel divestment. Environmental Law, 47(2), 335–427. http://www.jstor.org/stable/26491778 Search in Google Scholar

Deveau, S. (2021, March 18). Exxon activist reveals high $30 million cost of board-room battle. Bloomberg. https://www.bloomberg.com/news/articles/2021-03-18/exxon-activist-reveals-high-30-million-cost-of-boardroom-battle Search in Google Scholar

Diab, A., & Adams, G. (2021). ESG assets may hit $53 trillion by 2025, a third of global AUM. Bloomberg News. https://www.bloomberg.com/professional/blog/esg-assets-may-hit-53-trillion-by-2025-a-third-of-global-aum/ Search in Google Scholar

Eccles, R. G., & Mayer, C. (2021, January 20). Can a tiny hedge fund push ExxonMobil towards sustainability? Harvard Business Review. https://hbr.org/2021/01/can-a-tiny-hedge-fund-push-exxonmobile-towards-sustainability Search in Google Scholar

Eccles, R. G., Rajgopal, S., & Xie, J. (2022). Does ESG negative screening work? http://doi.org/10.2139/ssrn.4150524 Search in Google Scholar

Edmans, A., Levit, D., & Schneenmeier, J. (2022, November 11). Socially responsible divestment. European Corporate Governance Institute – Finance Working Paper, 823. http://doi.org/10.2139/ssrn.4093518 Search in Google Scholar

EIA. (2023). Petroleum and other liquids—spot prices. United States Energy Information Administration. https://www.eia.gov/dnav/pet/pet_pri_spt_s1_m.htm Search in Google Scholar

El Ghoul, S., Guedhami, O., Kwok, C., & Mishra, D. (2011). Does Corporate Social Responsibility affect the cost of capital? Journal of Banking & Finance, 35(9), 2388–2406. https://doi.org/10.1016/j.jbankfin.2011.02.007 Search in Google Scholar

Engine No. 1. (2021, February 22). Letter to the Board of Directors of ExxonMobil Corporation. https://reenergizexom.com/materials/letter-to-the-board-of-directors-february-22 Search in Google Scholar

Engine No. 1. (2022a). Engine No. 1 Exchange traded funds. https://etf.engine1.com Engine No. 1. (2022b, May 25). ExxonMobil: One year later. https://engine1.com/transforming/articles/exxon-mobil-one-year-later/ Search in Google Scholar

EPA. (2023). Sources of greenhouse gas emissions. United States Environmental Protection Agency. https://www.epa.gov/ghgemissions/sources-greenhouse-gasemissions Search in Google Scholar

ExxonMobil. (2022). Historical price lookup. ExxonMobil Investor Relations. Retrieved from https://ir.exxonmobil.com/historical-price-lookup Search in Google Scholar

Fabozzi, F. J., Ma, K. C., & Oliphant, B. J. (2008). Sin stock returns. Journal of Portfolio Management, 35(1), 82–94. https://doi.org/10.3905/JPM.2008.35.1.82 Search in Google Scholar

Faust, D. G. (2013). Fossil fuel divestment statement. Harvard University. https://www.harvard.edu/president/news/2013/fossil-fuel-divestment-statement Search in Google Scholar

Fink, L. (2023). A sense of purpose. https://www.blackrock.com/corporate/investor-relations/2018-larry-fink-ceo-letter Search in Google Scholar

Friedlingstein, P., O’Sullivan, M., Jones, M. W., Andrew, R. M., Gregor, L., Hauck, J., Le Quéré, C., Luijkx, I. T., Olsen, A., Peters, G. P., Peters, W., Pongratz, J., Schwingshackl, C., Sitch, S., Canadell, J. G., Ciais, P., Jackson, R. B., Alin, S. R., Alkama, R., … Zheng, B. (2022). Global carbon budget 2022. Earth System Science Data, 14, 4811–4900. https://doi.org/10.5194/essd-14-4811-2022 Search in Google Scholar

Friedman, L. (2019). Trump serves notice to quit Paris Climate Agreement. New York Times. https://www.nytimes.com/2019/11/04/climate/trump-paris-agreement-climate.html Search in Google Scholar

Funk, C. M., & Walker, R. (2021). Engage or invest? The question at the heart of climate impact. State Street Global Advisors. Retrieved from https://www.ssga.com/us/en/institutional/ic/insights?g=strategies%3Aenvironmental-social-governance-esg Search in Google Scholar

Gandhi, V. S., & Diak, C. (2022, November). The role of ESG in investment strategy. Harvard Business School Publishing. https://www.hbs.edu/faculty/Pages/item.aspx?num=63273 Search in Google Scholar

GFANZ. (2022). Financial institution net-zero transition plans. Fundamentals, recommendations and guidance. Glasgow Financial Alliance for Net Zero. https://assets.bbhub.io/company/sites/63/2022/09/Recommendations-and-Guidance-on-Financial-Institution-Net-zero-Transition-Plans-November-2022.pdf Search in Google Scholar

GFFDCD. (2023). Global fossil fuel divestment commitments database. https://www.divestmentdatabase.org Search in Google Scholar

Guillaume, K. E., & Halper, J. D. (2018, May 23). Overseer resigns over Harvard’s continued fossil fuel investment. The Crimson. https://www.thecrimson.com/article/2018/5/23/kat-taylor-resignation/ Search in Google Scholar

Gupta, D., Kopytov, A., & Starmans, J. (2022, November 29). The pace of change: Socially responsible investing in private markets. Working Paper. http://doi.org/10.2139/ssrn.3896511 Search in Google Scholar

Hale, J. (2020). DOL finalizes rushed anti-ESG rule. Medium. https://medium.com/the-esg-advisor/dol-finalizes-rushed-anti-esg-rule-bfa578a8aecb Search in Google Scholar

Harvard University. (2014). Faculty Letter of 2014. https://www.harvardfacultydivest.com/resources/timeline Search in Google Scholar

Harvard University. (2022). Harvard University Financial Report—Fiscal Year 2022. https://finance.harvard.edu/files/fad/files/fy22_harvard_financial_report.pdf Search in Google Scholar

Heinkel, R., Kraus, A., & Zechner, J. (2001). The effect of green investment on corporate behavior. Journal of Financial and Quantitative Analysis, 36, 431–449. https://doi.org/10.2307/2676219 Search in Google Scholar

Hicke, J. A., Lucatello, S., Mortsch, L.D., Dawson, J., Domínguez Aguilar, M., Enquist, C. A. F., Gilmore, E.. A., Gutzler, D. S., Harper, S., Holsman, K., Jewett, E. B., Kohler, T. A., & Miller, K. A. (2022). North America. In H. O. Pörtner, D. C. Roberts, M. Tignor, E. S. Poloczanska, K. Mintenbeck, A. Alegría, M. Craig, S. Langsdorf, S. Löschke, V. Möller, A. Okem, & B. Rama (Eds.), Climate Change 2022: Impacts, adaptation and vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (pp. 1929–2042). Cambridge University Press. https://dx.doi:10.1017/9781009325844.016 Search in Google Scholar

HMC. (2022). Climate Report – February 2022. Harvard Management Company. https://hmc.harvard.edu/wp-content/uploads/2022/02/2022-Climate-Report.pdf Search in Google Scholar

Hockett, R. C., & Gunn-Wright, R. (2019, January 1). The Green New Deal: Mobilizing for a just, prosperous, and sustainable economy. Cornell Legal Studies Research Paper, 9. http://.doi.org/10.2139/ssrn.3342494 Search in Google Scholar

Hong, H. G., & Kacperczyk, M. T. (2009). The price of sin: The effects of social norms on markets. Journal of Financial Economics, 93(1), 15–36. https://doi.org/10.1016/j.jfineco.2008.09.001 Search in Google Scholar

Ioannou, I., & Serafeim, G. (2015). The impact of corporate social responsibility on investment recommendations: Analysts’ perceptions and shifting institutional logics. Strategic Management Journal, 36(7), 1053–1081. https://doi.org/10.1002/smj.2268 Search in Google Scholar

IPCC. (2022). Climate change 2022: Impacts, adaptation and vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change Cambridge University Press. https://doi:10.1017/9781009325844 Search in Google Scholar

Kerber, R., & Jīn, H. (2022). Tesla cut from S&P 500 ESG Index, and Elon Musk tweets his fury. Reuters. https://www.reuters.com/business/sustainable-business/tesla-removed-sp-500-esg-index-autopilot-discrimination-concerns-2022-05-18/ Search in Google Scholar

Kerber, R., & Schroeder P. (2022). BlackRock, European firms face Texas pension ban over energy policies. Reuters. https:///www.reuters.com/business/sustainable-business/texas-comptroller-names-blackrock-credit-suisse-boycotting-fossil-fuels-2022-08-24/ Search in Google Scholar

Khan, M., Serafeim, G., & Yoon, A. (2015). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697–1724. https://doi.org/10.2308/accr-51383 Search in Google Scholar

KPMG. (2023). Get ready for the next wave of ESG reporting. https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/csrd-thought-leadership.pdf Search in Google Scholar

Kramer, M., Cole, S., Gandhi, V. S., & Zochowski, T. R. (2022). Engine No. 1: An impact investing firm engages with ExxonMobil. Harvard Business Review. https://store.hbr.org/product/engine-no-1-an-impact-investing-firm-engages-with-exxonmobil/222028?sku=222028-PDF-ENG Search in Google Scholar

Latinovic M., & Obradovic, T. (2013). The performance of socially responsible investments. Entrepreneurial Business and Economics Review, 1(2), 29–40. https://doi.org/10.15678/EBER.2013.010203 Search in Google Scholar

Lüthi, D., Le Floch, M.,Bereiter, B., Blunier, T., Barnola, J. M., Siegenthaler, U., Raynaud, D., Jouzel, J., Fischer, H., Kawamura, K., & Stocker, T. F. (2008). High-resolution carbon dioxide concentration record 650,000–800,000 years before present. Nature, 453, 379–382. https://doi.org/10.1038/nature06949 Search in Google Scholar

Meadows, D. H., Meadows, D. L., Randers, J., & Behrens III, W. W. (1972). The limits to growth: A report to the club of Rome. Potomac Associates Books. Search in Google Scholar

Morgan Stanley Institute for Sustainable Investing. (2020). Sustainable reality: 2020 update. https:/www.morganstanley.com/content/dam/msdotcom/en/assets/pdfs/3190436-20-09-15_Sustainable-Reality-2020-update_Final-Revised.pdf Search in Google Scholar

Narvekar, N. P. (2022). Message from the CEO—October 2022. Harvard Management Company. https://finance.harvard.edu/files/fad/files/fy22_hmc_letter.pdf Search in Google Scholar

National Oceanic and Atmospheric Administration (NOAA). (2022). Carbon dioxide now more than 50% higher than pre-industrial levels. https://www.noaa.gov/news-release/carbon-dioxide-now-more-than-50-higher-than-pre-industrial-levels Search in Google Scholar

Nosek, G. (2022). The fossil fuel industry’s push to target climate protesters in the US. Pace Environmental Law Review, 38(1), 53–108. https://digitalcommons.pace.edu/pelr/vol38/iss1/2 Search in Google Scholar

Phillips, M. (2020). Exxon’s Board defeat signals the rise of social-good activists. The New York Times. https://www.nytimes.com/2021/06/09/business/exxon-mobil-engine-no1-activist.html Search in Google Scholar

Plummer, B., & Friedman, L. (2022). Democrats got a climate bill. Joe Manchin got drilling, and more. The New York Times Magazine. https://www.nytimes.com/2022/07/30/climate/manchin-climate-deal.html Search in Google Scholar

Pratt, S. (2022). Catastrophic flooding in Yellowstone. NASA Earth Observatory. https://earthobservatory.nasa.gov/images/150010/catastrophic-flooding-in-yellowstone Search in Google Scholar

Quigley, E., Budgen, E., & Odgers, A. (2020). Divestment: Advantages and disadvantages for the University of Cambridge. https://www.cam.ac.uk/files/divestment-report Search in Google Scholar

Rodman, M., & Zhu, Y. (2015, May 27). Calls for divestment: A retrospective. The Harvard Crimson. https://www.thecrimson.com/article/2015/5/27/divest-retrospective-reunion-1990/ Search in Google Scholar

Rodney and Otamatea Times. (1912). Coal consumption affecting climate. Waitemata and Kaipara Gazette. https://paperspast.natlib.govt.nz/newspapers/ROTWKG19120814.2.56.5 Search in Google Scholar

Rosenberg, J. (2019, December, 4). A faculty motion on divesting fossil-fuel investments. Harvard Magazine. https://www.harvardmagazine.com/2019/12/harvard-faculty-motion-on-divestment Search in Google Scholar

Ryan, C. J., & Marsicano, C. (2020). Examining the impact of fossil fuel divestment on university endowments. New York University Journal of Law and Business, 17(1), 95–152. https://doi.org/10.2139/ssrn.3501231 Search in Google Scholar

Saijel, K. (2020). Hedge fund veteran Chris James to start impact-investing firm. Bloomberg. https://www.bloomberg.com/news/articles/2020-12-01/hedge-fund-veteran-chris-james-to-start-impact-investing-firm Search in Google Scholar

Salam, R. (2018, October 23). Elite universities are entrenching a privileged class. An endowment tax can fix that. The Atlantic. https://www.theatlantic.com/ideas/archive/2018/10/why-conservatives-are-turning-elite-universities/573592/ Search in Google Scholar

Schneider, T.E. (2011, December 30). Is environmental performance a determinant of bond pricing? Evidence from the U.S. pulp and paper and chemical industries. Contemporary Accounting Research. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1911-3846.2010.01064.x Search in Google Scholar

Schumacher, E. F. (1973). Small is beautiful: Economics as if people mattered. Blond & Briggs. Search in Google Scholar

Serafeim, G., & Fulton, M. (2014, November 4). Divestment alone won’t beat climate change. Harvard Business Review. https://hbr.org/2014/11/divestment-alone-wont-beat-climate-change Search in Google Scholar

Sharfman, S. B. (2021). The illusion of success: A critique of Engine No.1’s proxy fight at ExxonMobil. Harvard Business Law Review Online, 2. http://doi.org/10.2139/ssrn.3898607 Search in Google Scholar

S&P. (2023). S&P 500 ESG Index. S&P Dow Jones Indices. https://www.spglobal.com/spdji/en/indices/esg/sp-500-esg-index/#data Search in Google Scholar

Stavins, R. (2019, November). Carbon taxes vs cap and trade: Theory and practice. Discussion Paper ES 2019-9. Harvard Project on Climate Agreements. https://seors.unfccc.int/applications/seors/attachments/get_attachment?code=TJQGYTI096K3J33ANM1HDWYEU51VRXNC Search in Google Scholar

Temurlenk, M. S., & Lögün, A. (2022). An analysis of the Pollution Haven Hypothesis in the context of Turkey: A nonlinear approach. Economics and Business Review, 8(1), 5–23. https://doi.org/10.18559/ebr.2022.1.2 Search in Google Scholar

The United States Congress. (2017). The Tax Cut and Jobs Act of 2017. https://govinfo.gov Search in Google Scholar

The White House. (2022). Inflation Reduction Act of 2022. https://www.white-house.gov/briefing-room/statements-releases/2022/08/15/by-the-numbers-the-inflation-reduction-act/ Search in Google Scholar

Toffel, M., & Gulick, S. (2020). Fossil fuel divestment. Harvard Business School Publishing. Retrieved from https://hbsp.harvard.edu/product/620026-PDF-ENG Search in Google Scholar

Trinks, P. J., & Scholtens, B. (2017). The opportunity cost of negative screening in socially responsible investing. Journal of Business Ethics, 140, 193–208. https://doi.org/10.1007/s10551-015-2684-3 Search in Google Scholar

UN. (2015). The Paris Agreement. United Nations Framework Convention on Climate Change-COP21. https://unfccc.int/files/essential_background/convention/application/pdf/english_paris_agreement.pdf Search in Google Scholar

UN. (2021). The Glasgow Climate Act. United Nations Framework Convention on Climate Change-COP26. https://unfccc.int/process-and-meetings/the-paris-agreement/the-glasgow-climate-pact-key-outcomes-from-cop26 Search in Google Scholar

UN. (2022a). Report of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement on its third session, held in Glasgow from 31 October to 13 November 2021. Retrieved from https://unfccc.int/sites/default/files/resource/cma2021_10_add1_adv.pdf Search in Google Scholar

UN. (2022b). The sustainable development goals report 2022. United Nations. https://unstats.un.org/sdgs/report/2022/The-Sustainable-Development-Goals-Report-2022.pdf Search in Google Scholar

Urist, J. (2015, April 29). The push for ethical investment at American’s colleges. The Atlantic. https://theatlantic.com/education/archive/2015/04/the-push-for-ethical-investment-at-american-colleges/391697/ Search in Google Scholar

Supreme Court of the United States. (2022). West Virginia et al. v. Environmental Protection Agency et al. https://www.supremecourt.gov/opinions/21pdf/20-1530_n758.pdf Search in Google Scholar

Wood, S. (2022, September 13). 10 national universities with the biggest endowments. U.S. News. https://www.usnews.com/education/best-colleges/the-short-list-college/articles/10-universities-with-the-biggest-endowments#:~:text=Topping %20the%20list%20at%20about,News%20in%20an%20annual%20survey Search in Google Scholar

Zhang, J. (2019). Environmental protection investment and market value. Modern Economy, 10, 399–411. https://doi.org/10.4236/me.2019.102027 Search in Google Scholar