The Baltimore Sun reported last week on the decision by the University System of Maryland Foundation — which oversees the $1 billion endowment that funds student scholarships — to stop investing directly in fossil fuel companies ("University System of Maryland to direct its endowment away from fossil fuels," June 28). Readers should understand, however, that the decision to "divest" is simply an empty gesture. The foundation "has no direct investments in coal, tar sands, or any companies on the Carbon Undergound 200 list," according to the university student paper's own reporting.
Still, this empty gesture should not be taken lightly. Study after study has shown that divestment can have real costs for university endowments, in turn placing the funds that support students, scholarships, faculty, and staff at risk. The transaction and management costs of divestment alone can result in substantial damage to the system's endowment.
The fact is that divestment fails to have any tangible impact on climate change and only hurts the individuals and systems that rely on the endowment. The foundation should follow the lead of universities like New York University, Cambridge, and more recently, the University of Utah, which have chosen to leverage their investments in the energy sector to engage the industry while saying no to empty and costly divestment.
Josh Wilson, College Park
The writer is a graduate student specializing in public sector financial management at the University of Maryland's School of Public Policy.