Earlier this month, United Nations Secretary-General Ban Ki-moon came to speak at the Global Colloquium of University Presidents hosted at Yale. His visit coincided with an announcement from David Swensen, Yale’s chief investment officer, in which he said the University’s endowment would be divesting from a select number of holdings related to fossil fuels. Ki-moon praised this decision, commending Yale for “leading by example.” The announcement, however, amounted to little more than overhyped fanfare. The endowment dumped $10 million in investments related to fossil fuel companies, which constitute less than 1 percent of its investment portfolio.

Although noble and centered on an incredibly worthy cause, the divestment movement is overly narrow in its objectives and has chosen a course of action that is unlikely to be fruitful. In terms of practicality, many major educational institutions such as Swarthmore, Cornell, Harvard and Yale have rejected calls for divestment. While a very select few such as Stanford have followed through with complete or partial divestment plans, it does not seem likely that a great deal more will follow. Divestment carries costs that endowment managers at the nation’s largest universities see as too large of a sacrifice.

However, the fault with the divestment movement is not that it seems to be pushing for unrealistic changes, but that its current objectives are incredibly shortsighted. Fossil Free Yale, the undergraduate organization rallying for the endowment to pursue a plan of total divestment from the fossil fuel industry, is pushing an idealistic message rather than promoting concrete, achievable, high-impact change.

To begin with, it is worth considering what benefits would come from the divestment of Yale’s endowment (assuming other deep-pocketed universities and nonprofit foundations follow suit). Believe it or not, it would do quite little. For every sale of one of its holdings in fossil fuels, a hedge fund, financial institution or private investor would come along and purchase that stake. Financial markets are efficient, and the vast majority of participants do not factor in the moral qualms of the fossil fuel industry in their investment decision.

Furthermore, it is likely that most of the securities the Yale endowment possesses are already trading on the secondary markets. This is especially likely if Yale’s remaining fossil fuel investments are equity stakes in publicly traded companies, rather than such things as private equity investments or loans. Under these circumstances, Yale is not helping these companies raise money to fund future projects, it is simply securing a piece of the profits from existing operations. In other words, rather than funding a new coal mine, Yale is simply benefitting from profits and putting them to better use. The best argument that could be made for why divestment is an effective means of countering these fossil fuel companies would be that it raises the cost for these firms to raise capital in the future by lowering their market valuations. But, given the market’s efficiency, there will always be investors more than willing to take up Yale’s stake. Thus, the impact of divestment has little consequence in reality.

There is actually a fairly obvious solution that has been completely ignored by this campus’ student activists, and would go a long way in alleviating climate change. The solution is not to divest, but rather, to invest. Instead of strenuously urging the University to get behind a policy they have already rejected, students should advocate for an investment policy that can lead to true change.

We can have constructive discussions with endowment managers and encourage them to allocate more money toward investments in companies that are innovating and promoting sustainable solutions for our current environmental problems. The opportunities are boundless: We can invest in companies devising fuel cell technology, creating new ways to harness solar energy, building new water purification systems and engaging in responsible waste production. Such investments could allow renewable energy companies to discover cheaper and more cost efficient processes of delivering green energy, which eventually could (literally) drive the fossil fuel industry out of business.

We can even use our arsenal of nearly $24 billion dollars to take major stakes in companies whose practices we take fault with, and use shareholder activism as tool to enact socially responsible initiatives.

Divestment does little (to nothing) in actually tackling the problems that plague our planet, but capital can and should make a difference.

Franco Chomnalez is a junior in Pierson College. Contact him at francisco.chomnalez@yale.edu .