Though the Whitman College Board of Trustees stated the college will not divest from the fossil fuel industry, students in the Divest Whitman movement are still trying to change their minds.
Students and faculty in favor of divestment hope the combination of the faculty resolution passed last week, and a victory in a student referendum being organized for the fall will encourage the trustees to reconsider their position and reinvigorate the divestment movement. While several movements have advocated for divestment from various sources over the last several decades, the college still lacks an overarching policy for how ethics should impact investments.
Divest Whitman: the student campaign
Divest Whitman, a student-run campaign, urges the Whitman College Board of Trustees to divest the endowment’s exposure to the top 200 oil, gas and coal companies. The Divest Whitman campaign is part of a nationwide movement to encourage divestitures from funds involving fossil fuels in order to combat climate change and damage the economic legitimacy of the fossil fuel industry at large.
The student body has not heard much from Divest Whitman this school year, but their campaign is far from over. Students from the Divest Whitman campaign were the primary authors of a resolution passed by the Faculty Senate on Wednesday, Jan. 28.
Before writing the resolution, a team of 21 students met with many faculty members to discuss the professors’ opinions and concerns. The students then wrote the resolution with the aid of Associate Professor of Politics Aaron Bobrow-Strain and Professor of Politics Jeanne Morefield.
Thirty-four professors agreed to sign the resolution, and the Faculty Senate passed it almost unanimously.
“In 15 years of teaching at Whitman I have never seen such a well-run campaign,” said Morefield of the divestment campaign. “[The students] worked incredibly hard, they did all of their research, they contacted and tracked down as many faculty as they could, they answered any questions … The faculty [was] impressed with them.”
Now that the faculty resolution has passed, Divest Whitman is in the process of drafting a student referendum about divestment. Many students active in the divestment campaign, including seniors Collin Smith, Henry Allen and Ari Ronai-Durning, hope to bring the referendum to the student body for a vote before spring break.
ASWC already passed a resolution in the spring of 2013 calling for the college to limit new investments in fossil fuels and form a committee with representatives from all sections of the college community to investigate the effect divestment may have on the endowment. After a nine-month delay, the board decided against formal divestment but formed a Climate Action Planning Task Force comprised of trustees, staff members, faculty and students.
Though the ASWC resolution did not bring about divestment, Morefield and the students of Divest Whitman are confident that this upcoming referendum, paired with the recently-passed faculty resolution, will make a clear statement and lead the trustees to take more concrete actions.
“The idea is to hit the trustees with these two [pieces of legislation] that state pretty firmly that [their] constituents, so to speak, the students and the faculty, want this to happen,” said Morefield.
These two pieces of legislation are continuations of the philosophy upon which the divestment campaign has operated since its inception in 2013. These strategies have not yet convinced the trustees to divest, but in Smith’s opinion, the campaign has not failed.
Smith pointed to the college’s recent investment in a sustainably-oriented fund, the creation of a Climate Action Planning Task Force and the decision to set a date for the college to be carbon-neutral as steps that the college took in response to pressure from the divestment campaign.
“It wasn’t until we started pushing for divestment that the college finally decided that it was worth working on a Carbon Action Plan and a carbon-neutrality date. I think by pushing for divestment, like I said, we’ve received these collateral successes, and that makes me feel comfortable continuing to push even when we’ve received one no,” said Smith.
Smith admits that he doesn’t necessarily expect the faculty resolution and student referendum to be the convincing factor to get the college to divest. Rather, he sees these pieces of legislation as a reaffirmation of the student and faculty opinion on the subject. As Smith sees it, Divest Whitman has already influenced the college to adopt some environmental practices, so reaffirming their stance and continuing the conversation could likely yield more positive results.
“I think, at the end of the day, there’s some benefit just to bring these issues into the focus of the Investment Committee because I do feel like it matters to the long-term solvency of the endowment,” said Smith. “If they’re looking at these things and they’re making decisions with that in mind, I say that’s a good thing for the current moment.”
Divestment: The Financial Side
In February 2014, the Board of Trustees released a statement explaining their decision not to divest from fossil fuels, and they have made no public announcements on the subject since then. Divestment movements are not uncommon; in the 1980s, a student campaign urged the board to divest from companies involved with South African companies during Apartheid, but they refused to do so. The board does not have a general policy to guide how they respond to suggestions that they divest endowments from various sources. In recent memory, however, their response to requests has always been a firm “no.”
As of May 2013, about two percent of the college’s endowment was invested in companies from the Carbon Underground’s list of Top 200 Oil, Gas and Coal Companies. However, this two percent was invested in funds held by managers that controlled more than 25 percent of the college’s endowment, meaning divestment would require the college to reinvest over a quarter of the endowment to divest from fossil fuels.
The day-to-day management of investments is handled by the Investment Committee, which works with the college’s trustees to manage the endowment. Part of the everyday management involves the investment of money with new fund managers and redemption (that is, sale) of investments in others.
The Investment Committee currently makes all of their decisions based on the performance and risk profile of their investments without being swayed by political motivations. Since about a quarter of the college’s endowment is invested in funds with some exposure to fossil fuels, some investments and redemptions may slightly increase or decrease the college’s exposure to fossil fuel companies. The committee has made no attempt to avoid or decrease investments in fund managers with exposure to fossil fuels based on political motivations or the divestment movement.
“[Policy] is not a subject that the Investment Committee believes is within its jurisdiction. We have said that the policy questions belong at the Board level, not at the Committee level. The board said what its policy is last year,” said Trustee and Investment Committee Chair David Nierenberg.
Between March and September of 2014, the committee redeemed about 12.5 million dollars worth of investments held with two different fund managers. These funds were exposed to a variety of resources, including some fossil fuels, as well as other resources like gold and iron. As a consequence of redeeming these funds, the college removed more than 28,000 dollars from fossil fuel companies.
However, these redemptions do not signal a general trend towards divesting from fossil fuels. According to Financial Analyst Justin Rodegerdts, the decision to redeem those two funds was made with profitability in mind, rather than to make a political statement.
“I wouldn’t say that it was from the Investment Committee’s mindset of [a choice] to divest fossil fuels. It was more about the performance of [those] particular manager[s], and it just happened to be a manager with some exposure to fossil fuel companies,” said Rodegerdts.
In September 2014, the Investment Committee made a commitment of 10 million dollars to be paid over the course of roughly five to seven years to Climate Solutions Fund II, an investment fund run by Generation, which invests in alternative energy sources and sustainable resources and companies.
“The way I like to say it is that this was an opportunity to be green, and green in terms of sustainability and profitability. We’ve been very happy to make a commitment to the second CSF fund, [and] if we could find others like this, we would be happy to [invest in] them,” said Nierenberg.
Still, Nierenberg emphasized the centrality of financial stability in the college’s investment decisions.
“We would not have invested in something like [Climate Solutions Fund II] if it did not have a track record of [profitable] partnerships,” he said.
While this new investment is in line with the values of the divestment campaign, it does not delegitimize the fossil fuel industry and create the political will to keep fossil fuels in the ground, so Smith has mixed feelings, though he believes it is a step in the right direction.
What’s next?
No matter the outcome of the student referendum, the recent passage of the Faculty Resolution has pushed the question of fossil fuel divestment back into discussion among the trustees. Nierenberg said he looked forward to discussing divestment with the other trustees, who are meeting this week from Feb. 4 to 6.
In Nierenberg’s opinion, the decision regarding divestment is larger than just this particular anti-fossil fuel campaign.
“There’s a question at the altitude of 60,000 feet that I don’t think the board has thought about yet. That is, in what circumstances should divestiture for any cause be considered and decided? Not just energy and environment, but any issue. You could have similar discussions, for instance, about human rights issues,” said Nierenberg. “Whitman College does not have a policy about divestment and it’s probably worth considering.”
