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Student protests for divestment from Israel: Will it work? Thumbnail

Student protests for divestment from Israel: Will it work?

“Disclose! Divest! We will not stop, we will not rest!”

This slogan has resonated across campuses since last fall, as students demand their universities cut ties with Israeli institutions and divest from companies profiting from the war in Gaza. I heard these chants countless times while walking to my classes at Columbia University.

Although my home and job are in Santa Fe, I’ve spent the past year in New York City at Columbia’s Sustainability Management master’s program, witnessing the unfolding events firsthand. In April, students set up a solidarity encampment on Columbia’s campus. Their act of defiance quickly inspired similar encampments at universities across the United States, including the University of New Mexico.

The demands of student protesters

Students are urging their universities to divest from companies linked to the Israeli military. This primarily involves weapons manufacturers like American defense contractor Lockheed Martin and Elbit, Israel’s largest weapons-maker. While not all university endowments directly hold stock in these corporations, most own shares of index funds that include weapons manufacturers among hundreds of other companies.1

Divesting from weapons manufacturers alone would be relatively straightforward. Many ESG (environmental, social and governance) funds already exclude the defense industries.

However, students also demand divestment from companies like Google and Amazon, which provide cloud services to the Israeli military.2 Divesting from all companies tied to the Israeli military, including those outside the defense industry, complicates matters significantly.

Does divestment actually work?

As a sustainable investment professional, my classmates and friends frequently ask me: Why divestment? Does it work? Is it feasible?

Yes, divestment can work, but perhaps not in the way one might expect.

Divestment as a strategy for change dates to the 1780s, when Quakers opposed slavery by refusing to invest in companies involved in the slave trade. This approach aimed to align financial decisions with ethical beliefs. It was part of an abolitionist movement that ultimately led to the abolition of slavery.

Divestment campaigns by themselves are unlikely to have a significant impact on a targeted company or country. It would require massive numbers of people selling stock to impact a company’s cost of capital — i.e. the cost of raising cash to fund operations through borrowing money or selling new shares. However, calls for divestment can serve to focus public attention, shining a moral spotlight on certain industries, such as slavery, or stigmatize political regimes.3

In the 1970s and ’80s, students across the U.S. protested to demand that universities divest from companies doing business in apartheid South Africa. After more than a decade of pressure, labor unions, state pension funds and churches joined the student movement to divest. As opposition grew, banks stopped renewing loans to South African companies, workers refused to unload South African shipments, and consumer boycotts ensued. Eventually, the U.S. imposed economic sanctions on the country. By the early 1990s, apartheid had ended.4

Divestment in this instance worked as part of a mass movement that increased political and economic pressure to the point where the South African system could no longer function.

The divestment movement you may be most familiar with is the call to shun oil and coal companies, which has been taken up by student and environmental activists in recent years who argue a rapid transition from fossil fuels to renewable energy is necessary to avoid catastrophic climate change. While selling the oil or coal companies in a single institution’s endowment won’t directly impact the fossil fuel industry, it has created public debate and has become part of a broader social, economic and political mobilization that will ultimately lead to systemic change.

Companies prefer to avoid negative publicity, and when the threat of divestment is used in tandem with negotiation between investors and management, it has helped shift corporate policies on issues ranging from employee benefits and equal pay for women to carbon footprint disclosure.5

Whether or not you agree with the pro-Palestinian protests — within my own family it’s a highly contentious subject — their demand for divestment is largely symbolic at this point. It is unlikely to have a direct financial impact on Israel or the companies that do business there.

It is, however, raising public awareness of the war in Gaza, putting pressure on President Joe Biden in the middle of his reelection campaign to change U.S. foreign policy. Public outcry over civilian casualties is growing around the world. The student divestment movement may already have succeeded in influencing the course of the conflict.

To read the original version of this column in the Santa Fe New Mexican, please click here. 

Leah Cantor is the Sustainability Associate at LongView Asset Management LLC. She formerly worked as a reporter in Santa Fe, New Mexico, and is a passionate advocate for environmentally and socially responsible business practices. Contact her at leah@longviewasset.com.


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[1] Binkley, Collin, et al. “Students protesting on campuses across US ask colleges to cut investments supporting Israel.” AP News. April 24, 2024. https://apnews.com/article/college-protests-israel-divestment-palestinians-3f37f96f7be8e1124f266842d9caa627.

[2] Columbia University Apartheid Divest, Columbia’s Connection’s to Apartheid. https://cuapartheiddivest.org/research.

Al Jazeera Staff, “What is Project Nimbus, and why are Google workers protesting Israel deal?” Al Jazeera. April 23, 2024. https://www.aljazeera.com/news/2024/4/23/what-is-project-nimbus-and-why-are-google-workers-protesting-israel-deal. 

[3] Hansen, Tyler, and Robert Pollin. “Economics and Climate Justice Activism: Assessing the Financial Impact of the Fossil Fuel Divestment Movement.” Review of Social Economy, vol. 80, no. 4, Dec. 2022, pp. 423–60. EBSCOhost, https://doi-org.ezproxy.cul.columbia.edu/10.1080/00346764.2020.1785539.

[4] Counts, Cecelie. “Divestment Was Just One Weapon in Battle Against Apartheid” The New York Times, January 27, 2013, https://www.nytimes.com/roomfordebate/2013/01/27/is-divestment-an-effective-means-of-protest/divestment-was-just-one-weapon-in-battle-against-apartheid.

[5] Dobson, John and Mahdi Rastad, “Gender diversity on corporate boards: Evaluating the effectiveness of shareholder activism.” The Quarterly Review of Economics and Finance, Volume 84, 2022, Pages 446-461, ISSN 1062-9769, https://doi.org/10.1016/j.qref.2020.09.007. Margolin, Julie et al. “How Shareholder Engagement Can Reshape Finance.” World Resources Institute. November 5, 2021. https://www.wri.org/insights/how-shareholder-engagement-can-reshape-finance.

Photo by Tristan Sosteric on Unsplash.