Additional reporting by Danny Rothschild.
Some 40 students gathered in the DC Sunken Lounge last Friday for an afternoon “teach-in” hosted by Divest Haverford, a student campaign joining a national movement of students pressuring their colleges and universities to stop investing in fossil-fuel companies.
The teach-in is part of efforts by the student group Haverfordians for a Livable Future (HLF), which has been shaping their campaign since the end of the Fall semester. They are receiving support from 350.org, a climate justice group which supports divestment campaigns on college and university campuses across the country, including Swarthmore College.
The group’s name, 350.org, refers to what some scientists say is the maximum safe level of carbon dioxide in the atmosphere, 350 parts per million.
“This is a campaign that some of us have been talking about for almost a year, and now we’re seeing that there’s momentum building…to push for colleges that are socially just,” said Samantha Shain ’14, to a crowd of lunching students at the teach-in.
Like most colleges and universities, Haverford maintains an endowment fund which contributes to its annual operating budget, some 27% of the total budget the last fiscal year. Gifts to the College, trusts and investments all generate funds for the endowment.
HLF is joining 350.org in calling on Haverford and other higher education institutions to stop investing in 200 publicly-traded fossil fuel companies which hold most of the world’s coal, oil and gas reserves. They argue that fossil fuel companies are at the root of issues like offshore drilling, coal power plants and hydrofracking.
At this early stage of their campaign, HLF is still working out the best way to push their cause. So far the reaction from the student body has been a mixture of support, skepticism and confusion.
Claire Perry ’14, an on-looker for most of the teach-in, said she had many questions that needed to be answered before she could support a divestment campaign. “I’m interested in the impacts of this on not just Haverford, but also the fossil fuel companies. For one, will they even care?”
Others expressed concerns about how divesting from fossil fuels might affect the size of the endowment, and in turn, the college’s resources and student life. Presenters at the teach-in pointed to two small liberal arts institutions as leads to follow: Unity College (“America’s Environmental College”) in Maine, and Hampshire College in Massachusetts, which has an endowment of just $28.9 million. So far, no college or university with an endowment larger than $1 billion has agreed to divest.
Ruthie Cartwright ’15 considers herself an environmentalist, but worries those who don’t will be alienated by how the cause is presented. “I think there’s an unspoken tension between people who care about these issues on campus and those who don’t,” she said. “For something like this to succeed…[organizers] need to be prepared for people to feel animosity toward this.”
Oxenham’s response is that divestment isn’t a strictly environmentalist cause, but one that invokes broader questions about how climate change bears on issues like “social justice, human rights, and security dimensions.” But that is a hard message to convey, he concedes.
“The global poor tend to live in the places most likely to be hit the hardest [by climate change], and by virtue of being poor are also the must vulnerable and have the least capability to adapt,” said Oxenham. “That still fails to capture a lot of dimensions of the issue, especially those relating to the fact that climate change poses significant social justice problems within the borders of countries like the United States.”
While their public campaign is just getting started, student activists are already engaging staff in discussions about Haverford’s endowment and social responsibility policies.
Late last semester, two HLF members met with Associate Vice President of Finance and Director of Investments Michael Casel, investment analyst Andrew Dinger and Parker Snowe, executive director of the Center for Peace and Global citizenship, which serves as a liaison between students and the Board’s Committee on Investments of Social Responsibility (CISR).
In a recent letter, HLF called on senior staff to publicly support divestment from “fossil fuel companies that release toxins, pollute the environment, and whose current business models depend on, and propagate, the unrestrained burning of carbon.” The letter pointed to Haverford’s Quaker roots and “legacy of social and economic justice.”
Senior staff members have discussed the letter and decided the issue is one for the CISR, which will invite the students to discuss their concerns at their February 8 meeting.
But it is the Board’s Investment Committee which has the final say on the whether such a change in investment strategy fits within their “responsibility to manage the investment assets of the College to support the College’s educational mission,” Casel wrote on behalf of the administration, in an email response to The Clerk.
According to Casel, roughly 40% of the $400 million endowment is invested in broad global equity markets, with the energy sector accounting for some 10% of global equity. In other words, about 4% of the endowment is being invested in energy companies. “There will be some additional, smaller energy holdings in fixed income funds, hedge funds and private funds, but the global equity allocation is the majority,” he said.
Activists specifically point to the College’s indexed stock portfolios as problematic for their efforts. While the College makes direct investment choices in a managed portfolio, indexed funds follow stocks from a large set of companies, making it difficult to isolate any individual company. Haverford’s domestic equity is invested in the Russell 1000 index, which is comprised of the 1,000 highest-ranking, publicly-held corporations in the US, and includes major fossil fuel companies like Exxon Mobil and Chevron.
“When we invest money in these funds, we essentially spread our money out over the vast majority of the stock market,” said Ian Oxenham ’15, one of the students who met with Casel and Dinger. “The idea behind this [strategy] is the investment as a whole will not do poorly if one or two companies happen to perform badly, but it also means we don’t have any voting stock in these companies either.”
The College’s investment policy does have a provision that allows the CISR to prohibit certain investments, but Casel says this policy only applies to separate, managed portfolios. “The board made a decision not to invest in defense and tobacco in a managed portfolio, but since we are indexed, it does not really apply,” said Casel, in a Q&A with the Communications Office in 2008.
Is Divestment Effective?
This isn’t the first time the Tri-Co has seen calls for divestment in the name of social causes.
The efforts of students at Swarthmore College were recently featured on the front page of the New York Times website, in an article which highlighted the recent escalation of, and remaining barriers to, student campaigns for divestment from fossil fuel companies.
The divestment demand is so new that most administrators are just beginning to grapple with it. Several of them, in interviews, said that even though they tended to agree with students on the seriousness of the problem, they feared divisive boardroom debates on divestment.
Both Swarthmore and Haverford were among several colleges in the 1980s to divest from companies in South Africa doing business under Apartheid, after significant pressure and confrontational tactics by students, the Times reported. At Swarthmore,
The board later adopted a policy stating that it would be unlikely to take such a step again.
“The college’s policy is that the endowment is not to be invested for social purposes” beyond the obvious one of educating students, said Suzanne P. Welsh, vice president for finance at the school. “To use the endowment in support of other missions is not appropriate. It’s not what our donors have given money for.”
Casel says the divestment campaign of the 1980s was aimed at a much more palpable entity.
“The divestment campaign was against a single political entity in South Africa, in response to the human rights issue of apartheid, whereas the current divestment campaign attempts to influence a decentralized
Rather, he points to efforts which the College already supports, such as changing individual behavior to reduce the demand for fossil fuels and investing in alternative energy, as effective long-term strategies for change.
“The endowment also has almost 3% of assets specifically invested in alternative and renewable energy investments – a good example of applying financial resources in the service of a worthy principle that also serves our educational mission,” Casel said. “So long as there is demand for energy, there will likely be sufficient profits to sustain a robust fossil fuel industry, regardless of who might own the stock of various companies.”
He suggests students further consider direct engagement with companies themselves, campaigns in the community to encourage “behavioral adaptations” and shareholder resolutions, through the College’s direct stock ownership through the CISR, as alternative courses of action.
But HLF members say they aren’t satisfied by these answers.
Ben Safran ’13 says while directly engaging with companies can be effective on issues such as labor, “it isn’t really viable to go to a fossil fuel company and ask them to stop being a fossil fuel company.”
Furthermore, he says just a small amount of money is invested through the CISR, with the rest in comingled funds where students “mostly do not have opportunities to engage directly with corporations” through shareholder action.
Eve Gutman ’15 adds that while there’s always room to green our everyday lives, changes to individual behavior alone won’t solve climate change.
“Individual behavior, or even the behavior of one community, should by no means be the only thing we examine,” said Gutman. “More than half of my ecological footprint comes from beyond my individual actions, from services provided to me from societal institutions. We need to address systemic ecological consumption, and divestment is one way to do that.”
Oxenham says the focus on the CISR and action that the College has already taken just sends another message: “leave the endowment alone.”
“There may be ways of re-structuring the endowment’s investments in order to divest from the fossil fuel industry in a way that wouldn’t necessitate a drastic and expensive overhaul of the entire system, but since the administration does not like the idea of divestment, they are not willing to expend the energy to seriously investigate this possibility,” said Oxenham. “At least not in the absence of greater pressure from the student body.”