One Quandary of Oil Divestment

oil-gas-investmentsIf the OSU Foundation chooses to divest itself from fossil fuel investment, it will join just nine other schools in the country who have also committed to it. Those schools all made the decision in just the last few years, so it is still unclear where they have redirected those monies and to what effect. The question is, where would OSU redirect its investments, and could it ever have as safe and robust a rate of return?

According to an annual CNN Money poll, 3 of the top 5 revenue earners for investors were in the fossil fuel sector. More importantly, if you go back several years and look at the list, oil is always right there at the top. This is the quandary; there are things more profitable than oil from time to time, but you can’t always count on Wal-Mart and Apple to stay there. The ceiling on an investment in technology may be higher, but that guarantee of profits from Chevron is hard to pass on for the savvy investor.

One option is pharmaceuticals or biotech investment. The future promises to have many things, but the one thing it will have more of than anything else is people. There’s going to be billions and billions more of us in the next 50 years and most will be expecting drugs to keep them alive, especially as the population becomes grayer. This is an investment area that has much of the same promise as fossil fuels. But it is still far riskier. Without the built-in domination of companies like Chevron, pharma and biotech startups can die just on the whispers of bad press or poor early testing results.

This question will become more and more pressing as more schools jump on board and look for new places to grow their money.

By Sidney Reilly