<lass="page section layoutArea column" title="Page 1">
In a recent report, the board of trustees rejected the Carleton Responsible Investment Committee’s (CRIC) call for a task force and study on the feasibility of fossil fuel divestment.
However, the investment committee noted its willingness to assist CRIC in pursuing these initiatives on its own.
CRIC is an advisory board, making recommendations to the board of trustees on the ethical nature of its $790 million endowment.
CRIC co-chair Anil Methipara ’16 said, “What we understood was the trustees and vice president Fred Rogers are pretty much giving us a green light for commissioning a study if we wanted to. They kind of just put the responsibility back on us.”
If a study were commissioned, it is difficult to know what the effects would be, given the already polarized nature of the debate.
The investment committee’s report states, “We are very circumspect about inserting the College into public and political debates about what is moral and correct.”
The alumni group Divest Carleton contests this point, arguing, “In the broadest sense, all endowment decisions are political, including a decision to continue to hold fossil fuel stocks. We believe that divestment is essentially an ethical decision with important political implications.”
Still, what may be a more critical factor in the divestment debate is whether divestment augments portfolio risk. Pro-divestment groups argue that while there may be some increase in risk from divestment, fossil fuel companies are inherently risky because they are becoming defunct.
The investment committee, in contrast, sees any limits on the investment universe as a threat to possible growth.
Further, the nature of Carleton’s investments makes this especially tricky.
Around 80 percent of the portfolio is invested in commingled funds, from which Carleton has no ability to exclude fossil fuel companies. The rest is in direct holdings, from which the College can discriminate fossil fuel companies.
The investment committee, in regards to this distinction, writes, “We would suggest that it is unlikely to be helpful or illuminating to undertake an extensive analysis of commingled investment funds, as Carleton has no control over the content or timing of specific investments.”
Divest Carleton is wary of this reluctance to include the possibility of divesting from commingled funds: “While it may be easier to sell direct holdings, this would be a completely inadequate response.
The growth of fossil-free funds and managers has been very rapid over the past year or so, and the options will continue to increase.”
In coming months, CRIC will review previous research into the fiscal riskiness of divestment. CRIC hopes to have a report for the investment committee by May that would present its findings and possibly give a recommendation as to whether the campus should divest or not.
Impossible to divorce from divestment discussions is Carleton’s history on divestment from controversial stocks. In the 1970s, there was a campus movement to divest from South African apartheid-related investments, which was partially successful.
In its report, the investment committee wrote that “Carleton did not divest from all South-Africa related stocks in the apartheid era, and the College has rejected calls for divestment on many other topics (Sudan, tobacco-related stocks) over subsequent years.”
However, others do not see the South African case in the same failed manner.
“We did divest in the South African case, and pretty significantly,” says Methipara.
“It was funny because they obviously want to play it off a certain way, and I could understand that.”
Carleton has a history of being progressive on environmental initiatives.
In 2011, the board of trustees adopted the Climate Action Plan, which commits Carleton to “use its best efforts to achieve net-zero carbon emissions by 2050,” according to the investment committee report.
Committee members hold that for divestment to occur, it would need to be achieving something, and not just be symbolic.
Thus, debates are continuing, and the timeline is a source of worry for the pro-divestment group.
“A lot of students were afraid of a lag,” said Methipara, “because that can be seen as a strategy by the administration to kind of wait things out.
“Students are here for only, like, four years, so if the process takes more than two or three years, the students are obviously going to leave, and then, there’s going to be a different set of students, and they might not have the same movement.”
However, despite Board push-back, pro-divestment groups are unlikely to be deterred in the short-term. Divest Carleton insists that its “mission is not changed.
As can be seen in campuses around the country, a negative response will not halt or slow the di- vestment campaign.”