The worldwide movement to divest from fossil fuel companies is rapidly escalating. According to the Fossil Free campaign, 1055 institutions have committed to divesting $8.73 trillion, including seven U.S. News-ranked liberal arts colleges: College of the Atlantic, Warren Wilson, Northland, Pitzer, Lewis and Clark, Whitman, and most recently Middlebury, which shares Carleton’s ranking.
Considering this momentum, we compare the Carleton Board of Trustees’s stated reasons for refusing divestment with the reasoning of the seven liberal arts colleges.
The four concerns Carleton Board chair Wallace Weitz ’70 gave to the Carletonian in May 2017 are: “(1) the fiduciary responsibility of the board in managing the endowment; (2) the appropriateness of the College taking institutional positions on non-academic matters; (3) doubts about the effectiveness of divestment as a tactic; and (4) the availability of corporate governance resolutions and other strategies to achieve change.”
The Financial Objection
In March 2015, the Board requested that the Carleton Responsible Investment Committee (CRIC) research and issue a report on whether the college should divest from fossil fuels. CRIC subsequently delivered a unanimous recommendation in favor of divestment (with one member advising divestment only from coal companies).
The Board’s rejection of this recommendation includes a section on the financial consequences of divestment: “We believe that reducing the universe of possible investments will have a negative impact on long-term investment returns.”
In interviews and official statements, the colleges that have divested hold the opposite view. Donald Gould, vice chair of the Pitzer Board of Trustees, claims that “with some creativity, even a smaller endowment can put in place innovative investment structures to achieve its Responsible Investment goals while staying true to the Board’s fiduciary obligations.” Amy Miller, a member of the Lewis and Clark Board’s investment committee, goes further: “Once we studied the facts, the board was convinced we would not only be protecting the college by divesting, but actually improving our investment returns over time.”
These statements reflect the underperformance of fossil fuels companies in the last few years.
They also display a determination to find a financially viable road forward when, as the Whitman Endowment Divestment Policy puts it, an investment’s “business activities present a serious threat to basic values considered non-negotiable by the Whitman community.
Instances so extreme that they shock the conscience, such as genocide, ethnic cleansing, unjustified disregard of profound environmental degradation and other wide-scale acts of injustice, may call for an extraordinary response.”
The Appropriateness Objection
Although Carleton’s Trustees agree in their response to CRIC that “the use of fossil fuels has had serious negative environmental consequences,” they hesitate to commit themselves to what they describe as the “moral statement” of divestment.
They worry that “the delicate niche a college like ours occupies in society can be easily damaged and its credibility harmed if it is perceived as exceeding its proper mission.”
Carleton’s mission statement includes its aim to be “a responsible steward of its resources.” The colleges that have divested interpret their own missions as compelling motives.
Warren Wilson President Steve Solnick says, “The trustees have taken a bold step to align our investments with our core mission values,” which according to their divestment resolution, includes “environmental responsibility.”
Middlebury Board chair Kim Parizeau heralds her college’s decision: “While Middlebury has long been a champion of environmental sustainability, our actions today are a signal of even broader leadership at all levels of the institution.”
These colleges tie divestment not only to their environmental and stewardship missions, but to their fundamental commitment to their students.
Nancy Serrurier, chair of the Whitman Trustees, claims their decision “reflects our belief that global climate change presents a uniquely serious threat to the well-being of both the Whitman community and the world, and that fossil fuels are a major contributor to that change.”
Northland President Michael A. Miller declares, “Educational institutions have a unique responsibility to divest from fossil fuels and help usher in the transition to a renewable energy economy that works for all, especially the young people for whom they exist.”
The Effectiveness Objection
Carleton’s Trustees also conveyed to CRIC their skepticism about the positive effects of divestment: “We do not believe fossil fuel companies would change their behavior in response to Carleton selling its shares…In short, we do not think divestment is an effective strategy to reduce demand for or prevent fossil fuel production.”
Jay Friedlander, chair of sustainable business at the College of the Atlantic, acknowledges that their divestment “is not going to change Exxon Mobil’s world.”
He continues, “It’s also about where resources can be redeployed, such as in sustainable and local enterprises.”
Others agree that divestment opens up new opportunities. According to Warren Wilson Board chair Alice Buhl, their policy creates “a principled procedure to look for positive investments that are going to be consistent with our values.”
Rather than attempts to directly impact the fossil fuel industry, divesting colleges describe their decisions as value-driven responses to a system-wide crisis.
“It’s a way for the college to walk the talk,” says Northland Trustee Mike Fiorio. Middlebury President Laurie L. Patton states: “This plan is true to Middlebury’s culture and values. It is bold and aspirational while remaining realistic and highly practical.
It acknowledges that we do not have all the solutions at our disposal at this moment to meet these goals, but it commits us to make every effort to do so.”
We can’t help but hear an echo of Carleton’s President Oden’s statement upon signing the American College and University Presidents’ Climate Commitment: “Folks, I’m just going to sign the thing. We’ll find out the way; what we need first is the will. And that’s what we have.”
The Alternative Strategies Objection
Finally, Carleton’s Board of Trustees justifies its refusal to divest by its reluctance to “lose our voice in shareholder governance, which Carleton has practiced to good effect…We can try to persuade companies to behave wisely if we maintain an ownership stake.”
We did not find one instance of the divesting colleges directly addressing shareholder initiatives, perhaps because it is self-evident that such strategies haven’t worked to dissuade fossil fuel companies from their profit-oriented rejection of climate science.
As CRIC’s recommendation to divest argues, “Given the centrality of the extraction of fossil fuels to the business model of these companies, the absence of any track record of success in this area in recent decades, and the severity and scope of the climate-change crisis, we feel that shareholder engagement is far less effective than divestment, with its potentially paradigm-shifting impact.”
At this point in our planet’s history, it is clear that such a paradigm-shifting impact is needed. Pitzer Trustee Donald Gould emphasizes, “Climate action is urgent, and we are treating it urgently.”
Carleton’s Board assures us that the college “currently employs a variety of effective, mission-appropriate strategies to address the acute and vexing challenges associated with climate change.” Divestment would only add to this toolbox.
Whitman’s Board of Trustees points out that there is also “other important work happening on the Whitman College campus to curb global climate change…The board encourages these important efforts to continue, and hopes its investment actions will lead to broader conversations about other ways to reduce the college’s carbon footprint.”
A Student-Led Movement
Ultimately, each of these liberal arts colleges chose to divest because of the hard work and commitment of their student, alumni, faculty, and staff communities.
Amy Dvorak, head of the Lewis and Clark sustainability office, states, “The student voice in this initiative was critical. And that’s important because, at the end of the day, they are the reason we’re here.”
Middlebury Board chair Kim Parizeau echoes her: “The Board of Trustees has been deeply engaged in conversation with students, faculty, and staff for a long time, and we owe those communities a debt of gratitude for their passion, encouragement, and understanding of the complexities involved with creating a plan as far-reaching as this one.”
Students in the Divest Carleton movement pushed for an official meeting with college Trustees for years before finally getting one in May 2017. Afterward, Board chair Wallace Weitz told the Carletonian, “Hopefully the students felt heard.”
Seven U.S. liberal arts colleges have not only listened to their students but have acted upon their legitimate concerns about fossil fuel investments.
They found answers for every one of the Carleton Board’s objections. It is our hope that our Trustees will reconsider their 2015 stance—does it really match with the reality of their students’ world or with Carleton’s own stated values?