<turday, April 12th at 12 PM Pacific Daylight Time, the President and members of the Board of Trustees of Pitzer College stood alongside student and faculty representatives to deliver a historic announcement. By the end of the day on December 31st, 2014, Pitzer College will completely divest its $110 million endowment from fossil fuels. In taking this bold step, Pitzer has joined a group of 11 schools (9 of them in the last year), 26 religious institutions, and 22 cities, including Providence, Seattle, and San Francisco, that have made a partial or full commitment to pursuing fossil fuel divestment. The ranks of divested institutions are continuing to grow rapidly, thanks in large part to the over three hundred active student campaigns that have formed on college campuses; most of them have formed in the last two years. Here at Carleton, Climate Justice Coalition believes that it is time we joined the fun.
Why divest from fossil fuels? The answer is simple. We cannot in good conscience continue to support the growth of an industry whose very business plan threatens human life on this planet. Nor can we continue to support an industry that commits human rights violations, endangers the health of workers and communities, and spends hundreds of millions of dollars a year to stop both local and national governments from taking action. Investing in a company means owning a stake in that company’s growth. While we cannot all stop driving our cars and plugging in our phones tomorrow and expect to do just fine, we can make a commitment to transitioning away from this destructive industry and moving towards a future defined by renewable energy, climate justice, and strong, sustainable communities. This transition starts with a shift in our financial investments.
This moral argument is gaining traction around the world. Nobel Peace Prize Winner Archbishop Desmond Tutu wrote last week, “People of conscience need to break their ties with corporations financing the injustice of climate change.” “It makes no sense,” he continued, “to invest in companies that undermine our future.” Closer to home, in a letter also published last week, ninety-five Professors at Harvard University agreed that “the only way to remain ‘neutral’ in such circumstances is to bracket ethical principles even while being deeply concerned about consequences. Slavery was once an investment issue, as were apartheid and the harm caused by smoking.”
There is also a financial argument for fossil fuel divestment. It centers around three numbers. First, the entire international community, including the United States and China, has clearly stated in multiple agreements that climate change must be limited to no more than 2 degrees Celsius of warming. Second, in order to stay below this threshold, humans cannot emit more than 565 gigatons of CO2 into the atmosphere. Third, fossil fuel companies currently hold enough reserves to emit 2,795 gigatons of CO2 into the atmosphere. These three numbers, made famous by renowned activist Bill McKibben, mean that fossil fuel companies currently possess 5 times more reserves than they can safely utilize. In other words, 80% of fossil fuel reserves are in danger of losing their value, becoming stranded assets as the world moves towards a renewable future: this is known as the carbon bubble.
An article in The Guardian last week stated that “Citi bank, HSBC, Deutsche Bank and Goldman Sachs, as well as ratings agencies Standard and Poor’s and Moodys, are among the big financial players who have already warned investors of the carbon bubble risk.” The article also stated that the Norwegian finance ministry, manager of the world’s “biggest sovereign wealth fund,” is currently considering divesting from its fossil fuel stocks due to this risk. Meanwhile, ExxonMobil published a report last month in which it acknowledged these concerns but brushed them aside, reaffirming its intent to burn all of its reserves. By refusing to plan for a sustainable and just future, companies like ExxonMobil continue to follow a business model that does not have a place in tomorrow’s economy.
Of course, divestment is ultimately meaningless if we do not also reinvest. In addition to announcing its divestment from fossil fuels, Pitzer College also announced its creation of a Sustainability Fund through which to make environmentally responsible investments. Also recently, another of Carleton’s peer institutions, Middlebury College, committed to putting $50 million of its endowment into socially responsible investments. These commitments remind us that divestment from fossil fuels must be accompanied by investment into new ways forward. Climate Justice Coalition supports reinvestment of some portion of Carleton’s fossil fuel stocks as an end goal, although we recognize divestment as the necessary first step in a reinvestment campaign.
Despite the legitimacy of and widespread support for these arguments, many college administrations around the country have refused to take divestment and reinvestment activists seriously, even at schools like Yale University, where 83% of almost 3,000 voting students voted in favor of divestment in a student government referendum. Some administrators have claimed that their legally binding fiduciary duty compels them to manage their endowments with only profit in mind. This argument fails to recognize that the full definition of fiduciary duty is “a legal duty to act solely in another party’s interests (Cornell Law School).” Stopping climate change would certainly seem to be in the interests of an institution devoted to benefitting the next generation. Elsewhere, other schools have resorted to scare tactics, making unsupported claims to students about potentially catastrophic effects on endowment returns. Meanwhile, the majority of studies continue to show that divestment does not significantly decrease returns if done properly.
At still other schools, administrators have feigned sympathy to student requests but argued that it is not the place of the college to make political statements. This argument is deeply flawed, for if divestment constitutes a political statement, then surely investment in fossil fuels, its opposite, also constitutes one. The ninety-five Harvard faculty discussed this logic in their recent letter. This argument would also be hypocritical for Carleton to make. The Board of Trustees, guided by the students, faculty, and staff of CRIC (Carleton Responsible Investment Committee), routinely votes on shareholder resolutions for companies in which it is invested. One of the criteria that CRIC uses in deciding its votes is whether the resolution in question is aligned with Carleton’s values: a criterion that clearly implies a political statement.
Renowned actor Robert Redford, one of the Pitzer trustees who announced divestment on Saturday, put it best when he said, “there are those people who are afraid of change, and I think we know who those people are. And we can see the result of their resistance, and it’s paralyzing a part of our country that needs to move forward at this point.”
In a written statement published last winter, President Poskanzer wrote, “Carleton does not have a policy of divesting, or of supporting divestment.” In writing this, President Poskanzer ignores and indeed tarnishes the legacy of one of Carleton’s most celebrated heroes, Professor (and later Senator) Paul Wellstone. In 1978, Wellstone joined students in a sit-in of the Board of Trustees meeting, potentially risking his job in doing so, as part of a long campaign to get Carleton to divest from corporations supporting the apartheid regime in South Africa. And in 1987, after years of continued pressure from Carleton students and faculty, led by Wellstone, Carleton did indeed divest millions of dollars from the apartheid regime. This divestment included oil stocks: 30,000 shares of Texaco ($1,012,000), 20,000 shares of Mobil ($935,000), and 15,000 shares of Chevron ($870,000), according to a book of Carleton’s history, “Carleton Moves Confidently into its Second Century” by Merrill Jarchow. Today, Carleton is home to a house dedicated to Paul Wellstone, and last term students voted to give funding to a memorial in his honor. We would do well to remember not just his name, but also his full legacy.
Divestment is in line with Carleton’s institutional values as well as its history. In a 2001 statement endorsed by the Board of Trustees, Carleton declared: “Carleton College recognizes that it exists as part of interconnected communities that are impacted by personal and institutional choices. We are dedicated to investigating and promoting awareness of the current and future impacts of our actions in order to foster responsibility for these human and natural communities. Carleton strives to be a model of stewardship for the environment by incorporating ideals of sustainability into the operations of the college and the daily life of individuals.”
In her speech on Saturday, Laura Skandera Trombley, President of Pitzer College, issued a call to Pitzer’s peer institutions. “We refuse to accept a diagnosis of doomsday,” she said. “We also refuse to do business as usual.” She continued: “We’re issuing an invitation to our sister institutions in higher education. Come join the party: it’s so much fun to do the right thing.”
Pitzer College displayed true leadership through its announcement on Saturday. Now, Carleton is faced with a great opportunity. We have a chance to act now on divestment, and in doing so to join Pitzer as a leader on climate change. If we do, across the United States, students, professors, and others will look to Carleton as a school that is willing to act boldly, taking action where other schools have squabbled with students and spun in circles. Prospective students like the ones on campus today will look at Carleton as a school that commits to their futures through its actions, not just through its words. Wind turbines and reusable cups are great steps, but they are not enough if we truly want to avert the climate change crisis. Today, Climate Justice Coalition calls on Carleton to join Pitzer. Engage in dialogue with students about how we can better align our actions with our stated values. Consider options for sustainable investment. And, as a leading step towards a brighter future, divest from fossil fuels.