NOTE: The report to which these comments respond will be found at https://apps.carleton.edu/governance/cric/surveyresults/2013/.

Introduction 

Divest Carleton appreciates this opportunity to comment on the recently released report on Carleton community attitudes and ideas regarding the activities of the Carleton Responsible Investment Committee (CRIC) and the management of the college endowment. Divest Carleton is an alumni group formed to move Carleton to divest from fossil fuel endowment holdings. Our group is part of a significant international divestment movement organized by 350.org. More information on these efforts will be found on our web site at www.divestcarleton.wordpress.com and at www.350.org.

Our understanding is that the attitude study and report were conducted and written by Professor Katie St. Clair’s Fall 2013 Statistics Seminar. We want to express our thanks to Professor St. Clair and her class for the effort that was put into the survey. While we have some issues regarding the report and its conclusions, we appreciate the work that the class has done to help in the understanding of campus attitudes towards CRIC and college endowment policies. We also appreciate the fact that CRIC asked for the study and played a large role in its development.

We believe that CRIC is developing its own response to the report and we look forward to further conversations with CRIC and others regarding its findings. While our primary focus is on the findings regarding fossil fuel divestment, we encourage CRIC to examine all aspects of the report and use it to shape their work for the rest of this academic year and into the future. We believe that the strong support for divestment as a strategy among all groups, and the majority support for fossil fuel divestment among students suggest that this topic should be explored more fully as the year progresses.

Methodological questions

The survey was structured and conducted so that the responses of those surveyed could, with some level of confidence, be thought to represent the position of the entire population. Our substantive comments are based on the assumption that the responses of the sampled groups can be reasonably applied to the whole group. But we have some methodological questions about the survey report and its methods, which we will discuss first.

The problem of sample size: The study used a stratified sample method, dividing the Carleton population into four groups: alumni, students, faculty, and staff. Then a random sample from each group was surveyed. This approach makes sense but we feel that the rationale for the sample size from each group is not sufficiently explained. Sample size is crucial for determining the accuracy of and confidence in the summary statistics for each group. The report lists several criteria: group population size, estimated non-response rate, survey fatigue, and desired precision. While population size as a factor seems clear, for the non-professional-statistician reader, a further explanation of non-response rate and survey fatigue would be useful. Even more important would be an explanation of “desired precision” and what desired precision was selected. It is our understanding that sample size significantly impacts the standard error, the confidence interval, and the level of confidence which results from the sample size. A clearer explanation of the “desired precision” would be very helpful. We need to know the confidence that we can have in attributing the responses of the respondents to the entire population.

The problem with overall average responses: Because of the much greater numbers in the alumni population (20,498) when compared with other groups (students 1,858, staff 616, faculty 238), and the resulting greater sample size, overall averages tend to weight alumni responses more heavily. Out of the total of 384 responses, 170 or 44%, came from alumni. For some purposes this may be fine, but for instances where the responses are quite different for different groups, a breakdown by group is very important. In some instances, the report does this, but for many questions, including those relating to divestment, the breakdown by group is relegated to an appendix. If someone does not take the time to look in the appendix, this difference would be missed.

The problem with the alumni sample: Since the sampling method was based on combining decades in sample selection (i.e., 60s, 70s, 80s, 90s, and 00s) no classes after 2009 were included. Thus the attitudes from the classes of 2010, 11, 12, and 13 were missed. Our guess is that these recent alums might view fossil fuel divestment more positively than prior decades. inclusion of these classes would, in our opinion, have increased perceived alumni support for divestment..

Concerns about investment and divestment

Having stated our methodological reservations about the survey, we will base the rest of our comments on the assumption that the responses to the survey can be taken as indicative of overall campus or subgroup (e.g., students, faculty) attitudes.

Attitudes about fossil fuel divestment: Because of its focus on the overall average response when it comes to divestment (Table H), the report fails to note the key difference between student opinion and that of the other groups surveyed. The reported average of those who agree or strongly agree with fossil fuel divestment is 34%. But this hides the significant support among students. The percentage of students strongly agreeing or agreeing with fossil fuel divestment totals 54.54%. The other groups surveyed range between approximately 25% and 32% (see Table Q28 in Appendix IV). This represents a fairly sharp divergence between students and other college constituencies. This is largely due, we believe, to the fact that the fossil fuel divestment campaign nationally has ben led mainly by students. Significant numbers from other constituencies may not be aware of the movement.  Support for divestment from over half the student body is notable given that there has not as yet been a coordinated fossil fuel divestment campaign on campus, with the student led Climate Justice Coalition reinvestment campaign just now getting underway. We believe that this majority support among students for fossil fuel divestment is a key factor that CRIC should consider as it plans its activities for the future.

Another notable statistic, particularly for our alumni group, is that about a third of alumni support fossil fuel divestment. This means that over 4,500 alumni support fossil fuel divestment, without including the four most recent graduating classes.

Attitudes about divestment in general: The survey asks “If you would like to see Carleton divest (remove investments) from certain companies, what would be the primary reason for the divestment?” and then gave six options, including “Carleton should not divest.” The results show that there is overwhelming support for divestment as a general strategy with only 12.4% saying Carleton should not divest. The report contrasts this result with the weaker support for fossil fuel divestment and hypothesizes that there are other issues for which respondents would favor divestment. Our reading of this result is that it reflects the fact that fossil fuel divestment is a somewhat more complicated issue and that there has not been a systematic effort as yet to educate the campus on its rationale and purpose. The question may have been phrased in a somewhat confusing way (see appendix V for specific question language) which might partly explain the response, but the fact remains that only about 12% of respondents said “Carleton should not divest.”

One interesting statistic not highlighted in the report (see the table for Q27 in Appendix IV) is that no faculty member said “Carleton should not divest” (and the standard error was reported as zero). We take this response as an indication that there is significant support for divestment as a strategy for the college to use in addressing social issues  among faculty members and expect that support for fossil fuel divestment will grow as discussion on campus continues

Attitudes toward ESG (environment, social, and governance) investing: The survey explains the meaning of ESG and then asks, “Suppose that Carleton engaged in ESG investing, but that this resulted in a lower return on the endowment which, in turn, resulted in fewer funds for student aid (for example). Would you favor that Carleton engage in ESG investing?” We believe that this question is loaded toward the negative by using as an example a very visible and popular spending area. There is no explanation of the magnitude of the hypothetical loss of funding or of the possible other ways that expenses could be cut. It might have been more balanced if the question had said that cuts would have to be made in some area of the college budget.  In spite of this negative slant, more respondents agreed or strongly agreed (44.97%) than disagreed or strongly disagreed (34.83%). The strongest positive was from the faculty, with 49% positive and only 24% negative. Among students, only 31% disagreed, below the overall average, even though student aid was used as the example. Over 20% of students marked no opinion, possibly reflecting objections to the wording of the question (See the Table for Q29 in Appendix IV).

Attitudes toward disclosure of all college endowment holdings: In question 30, the survey asks: “Carleton only discloses its top ten holdings. Would you support full disclosure of Carleton’s public equity to those with a Carleton username and password?” Unfortunately, the Table reporting responses to this question is mislabeled (we believe) to read “Do you support disclosure of Carleton’s top ten holdings?” Assuming that the numbers in the table apply to the question on the survey, the support for full disclosure is very strong, with 70.59% supporting and only 21% opposing.

Two comments on this topic: first it should be noted that the Trustees, in response to a resolution from the Carleton Student Association, recently voted to allow student access to all direct holdings. Our understanding is that direct holdings amount to only about 35% of the overall endowment, with the other 65% in commingled funds or other investments. Discussion should continue on the full endowment, not just the direct holdings. Second, to our knowledge, the Trustees have not yet considered the issue of alumni access to the same information. We believe that such access is appropriate given the nature of alumni relations with the college and we will continue to work toward alumni access. 

The “Pomona Study” reference: The introduction to the survey report includes a reference to a study done on Pomona College’s endowment showing that fossil fuel divestment would result in a projected negative impact of $419 million on the endowment over the next ten years. This reference has nothing to do with the results of the survey and casts an unnecessarily negative tone to the report. There are a number of other studies that do not show a negative impact and at least some reference to them would have been appropriate. The Pomona study has been criticized for, among other things, actually comparing active management with passive (e.g., index funds) management, rather than active management without fossil fuel investments. Further, there is increasing concern in the investment community with the long term prospects of fossil fuel companies. As the world moves toward a low carbon future, the value of “in the ground” fossil fuel assets could significantly decline, resulting in a “stranded assets” problem. Studies now show that if the world moves to limit the damage from climate change, many of these fossil fuel deposits can never be used.. A discussion of the economics of fossil fuel divestment is certainly in order and important, but a single reference to a negative study is not appropriate for the attitudes report.

Some Key Summary Points

1. Over half of the student body (54%) supports or strongly supports divestment from fossil fuel investments.

2. Over 4,500 alumni (about 32%) support or strongly support fossil fuel divestment. This does not include alumni from the classes of 2010, 11, 12, and 13, who were not surveyed, and whose responses would be expected to increase alumni support to a number higher than 32%.

3. There is strong support for divestment as a general strategy (separated from the specifics of fossil fuel divestment). When asked to identify a primary reason for divestment, over 90% of all respondents identified a reason and only 10% responded that Carleton should not divest.

4. There is strong support for ESG (environment, social, and governance) based investing, even with the assumption that this would result in a lower return on the endowment: about 45% of all responses supported this notion (including about 50% of faculty responses) while about 35% opposed it.

5. There was strong support for “full disclosure of Carleton’s public equity to those with a Carleton username and password” with over 70% overall support (note: this result was misreported, we believe, in the Table labeled Q30 in Appendix IV). The Trustees recently made direct holdings available to students. We believe similar access should be granted to alumni.

Questions regarding these comments can be submitted to Brett Smith at smithb55419@yahoo.com.