The alumni of Divest Carleton have sent this open response to the Board of Trustees regarding their vote to reject the recommendation of their responsible investing committee. (The student response will come at the beginning of Winter Term, and we will post it here then.)
If you are interested in signing on to this response, just indicate that in the comments section. As we use the response in future outreach, your name will be included.
To: The Carleton College Board of Trustees
From: Divest Carleton Alumni
Date: December 7, 2015
Subject: Response to the Trustees’ 11/12/15 Memo to CRIC Regarding Divestment
We at Divest Carleton want to express our disappointment with the Board’s rejection of CRIC’s recommendation that the College divest its fossil fuel holdings. We believe that the Board’s November 12 memo did not seriously address the arguments made by CRIC in its report, opting instead to briefly rehash old arguments. The memo presents a self-satisfied “business as usual” perspective which is unacceptable in the face of climate chaos.
In the face of this rejection, Divest Carleton is committed to continuing to engage the Board on this issue and to help organize alumni, faculty, staff, and students to continue to press for fossil fuel divestment. In this connection, we ask that the Board read and respond to the comments in this memo and provide us with an opportunity to meet with you to discuss this issue at your February Meeting. We anticipate that the students of Divest Carleton will have similar comments, but given the late Fall Term release of the Board statement, we expect those comments to come early next year.
The Board based its rejection of divestment on four points: financial returns, moral and political issues, effectiveness, and, finally, alternatives to divestment. We believe that the arguments surrounding each of these points are flawed and unpersuasive, as described below.
- Financial Returns: The Board “believes” that divestment will have a “negative impact on long term investment returns.” But this belief is not supported by any evidence the Board presents. As the Board memo recognizes, there is just as much evidence that divestment will have no impact or a positive impact. We believe, in fact, that there is more evidence arguing for a positive impact. The bottom line here is that continuing to invest in a product that is scientifically proven to be harmful to human and ecological well-being and which is the subject of tremendous global reduction efforts is not consistent with fiduciary duty and seems foolhardy rather than prudent. Such investments leave the college vulnerable to the significant risk of stranded fossil fuel assets that can never be burned.
- Moral and Political Issues: In its charge to CRIC regarding divestment, the Board challenged CRIC to demonstrate that fossil fuel divestment clears a “very high” ethical bar, further stating that ”… new questions about socially responsible investing do periodically arise, and the wisdom/propriety of fossil fuel divestment falls within CRIC’s purview.” We believe that CRIC successfully established that divestment does clear a high ethical bar and that it is precisely a “new question” that warrants College action. CRIC’s arguments centered on the unprecedented scope and magnitude of climate change impacts on human and natural systems, on the fact that the College has already acknowledged the reality and scope of the problem, and finally on the demonstrably unethical behavior of the fossil fuel industry in terms of its basic business plans to burn all the carbon it can find, and its efforts to impede progress on addressing climate change through electoral campaign support, lobbying, and public misinformation activities. Significantly, the Board did not challenge any of these points, making no attempt, for example, to explain, criticize, or justify industry behavior.
In its subsequent response to the CRIC recommendation, the Board changed the argument a bit. It dropped the notion of a high bar without a mention and essentially completely ruled out College actions on moral grounds (high bar or not) by stating that “Nondenominational colleges and universities like Carleton are not … religious organizations that seek to define, promote, and enforce morality.” With this blanket elimination of any moral stand by the college as an institution, the Board relieved itself of any responsibility to look in detail at the issue of fossil fuel divestment. This is a very bad argument for a variety of reasons:
First, it is not possible for the College to maintain ethical neutrality in this case. Continuing to hold fossil fuel stocks is not an ethically neutral position. The explicit decision to continue to hold fossil fuel stocks is just as much a moral and political decision as divestment. Holding these stocks gives tacit approval to the behavior of the industry and creates for the College a vested interest in the continuation of a fossil based economy.
Secondly, this argument is based on a selective reading of Carleton’s historical stance on ethical issues. The College has recognized the importance of moral issues in endowment decisions previously when it divested from stocks in companies acting immorally in South Africa. Further, by creating CRIC and giving it the mandate to provide advice on the ethics of company behavior, the Board acknowledged the importance of this aspect of endowment decision making. In reality, the Board’s exclusion of ethical issues from endowment decisions calls CRIC’s role into question, since CRIC’s mandate clearly implies an ethical dimension to these decisions. In addition, there is the fact that the College has already acknowledged its responsibility to take action on climate change. This responsibility was presumably not motivated by economic factors but rather by moral considerations. The significant campus greening activities listed in the Board response reflect this moral responsibility. Divestment is an extension of this responsibility, applying it to financial holdings in addition to on-campus greening. Moral obligation and good citizenship do not stop at the Endowment door.
The Board’s position that ethical matters are best left to religious institutions is both unrealistic and contrary to Carleton’s stated values of good citizenship and the fostering of a strong sense of social responsibility. In 2001 the Board stated: “Carleton strives to be a model of environmental stewardship by incorporating ideals of sustainability into the operations of the College and the daily life of individuals.” The idea of Carleton as a model of good citizenship and sustainability is much more consistent with our tradition than the idea of the College as an institution unwilling to take a moral action on a critical social issue.
- Divestment as a Strategy for Change: The Board challenges the effectiveness of divestment as a strategy. We disagree. We believe that as part of a global movement calling into question the economic and moral standing of the fossil fuel industry, divestment might well have a significant effect. The moral challenge to businesses operating in South Africa certainly played a role in ending apartheid. Decisions made for ethical reasons can sometimes have important political implications. The divestment movement is growing and now includes divestment commitments from more than 500 institutions representing over $3.4 trillion in assets. The expectation is not that any single divestment decision will make a difference but that through the action of many, financial and moral pressure can be exerted. As a highly regarded and widely respected educational institution, Carleton has the possibility of being a true leader in this movement and of actually making a difference.
Carleton has already expended significant resources on efforts to reduce its carbon footprint. These are laudable actions, but, just like divesting alone, they will not by themselves seriously affect total greenhouse gas emissions. The impact is way, way too small. Even if, in fact, all of the colleges and universities who have signed the American College and University Presidents Climate Commitment met their carbon reduction goals, it would still amount to an impact too small to make a difference. But if all of these schools committed to divestment and made visible statements about the problems with fossil fuel companies and carbon budgets, this might well have an impact on public perceptions and on political decision making. Like any other tool, neither the greening of college campuses nor divestment will on their own solve climate change. The College no doubt recognizes this, and still chooses to push forward on-campus carbon footprint initiatives because it is the right thing to do. The same principle applies to investments. Even if it proves ineffective, it is still the right thing to do.
Clearly, divestment is just one tool in the toolbox to approach climate change. It is not the sole tool that we have. But it is one additional thing that Carleton can do to address the problem. The tools we have used in the past have not significantly impacted the problem.
- Alternative Strategies: The Board suggests that support for shareholder resolutions is a “far more appropriate strategy” for effecting corporate change. While we support continued involvement by CRIC in shareholder resolutions, we are convinced that this strategy will not work with respect to fossil fuels. To challenge the unethical behavior of this industry is to go to the heart of their business plans. What is required of these companies includes a commitment to leave significant portions of their resources in the ground, to stop funding candidates and lobbyists that block effective policies, to stop funding attacks on mainstream science, to stop exploring for new carbon resources, and to shift company resources to finding alternatives to continued fossil fuel use. These requirements are inconsistent with the business plans of these companies and shareholder resolutions will not change that.
In addition to shareholder resolutions, the Board identifies the College’s research and teaching activities as effective strategies. While we support the continuation and expansion of education and research on climate change we believe that these strategies have limits. They are gradual and incremental and, given the greenhouse gas trajectory that is necessary to prevent truly calamitous climate chaos, we need actions that can have more immediate effects. We have educated students and conducted research for years, but the problem continues. Divestment adds a tool that might make a difference quickly.
Further, we believe that visible decisions made about endowment investments have clear educational implications. The refusal to make a decision about the ethics of the fossil fuel industry sends a clear message to students and the general public that climate change is not serious enough to justify a diversion from business as usual. This refusal might, in fact, legitimately be considered as a form of climate change denial. Just like the College’s action to reduce its carbon footprint, a decision about divestment becomes part of what might be called a “hidden curriculum.” Actions do speak louder than words, and the failure to act in this context raises a serious question about whether the College really believes what it says about the dire impacts of climate change.
In summary, we believe that the Board’s case for refusing to divest is inadequate and misguided. We, therefore, call upon the Board to reconsider its decision and to divest its fossil fuel holdings as CRIC has recommended. We will be eager to meet with the Board to further discuss the issue. Please contact Brett Smith (email@example.com) or Peter Samuels (firstname.lastname@example.org) with questions, comments, or responses.
Elizabeth Jarrett Andrew ‘91
Laura Bramley ‘09
Simone Childs-Walker ‘12
Ben Cushing ‘12
Bob Dobrow, Professor of Mathematics
Kirke Elsass ‘09
Jonathan Hahn ‘12
Rebecca Hahn ‘09
Carolyn Ham ‘83
David Loy ’69, Honorary ‘15
Kathryn Olney P‘15
Naomi Price-Lazarus ’18, Divest Carleton Student Co-Leader
Ellie Parker ‘63
Mary Reames ‘91
Sally Robertson ‘79
Peter Samuels ‘09
Soren Schlassa ’18, Divest Carleton Student Co-Leader
Marty Schotz ‘64
Andrew Snyder ‘10
Stan Siefer ‘64
Brett Smith ’64 P’91,’ 93
Katherine Smith ’66 P’91, ‘93
Bob Traer ‘65
Nancy Traer ‘64
Allison Tucker ’18, Divest Carleton Student Co-Leader
Dwight Wagenius ’64 P’91, ‘93
Jon Watterson ‘66
Peggy Day Watterson ‘66
Jim Roberts P’15
Mary Childs P’12, ’14, ’15
Susan G. Letcher, ’00
Betsy Barnum, ’73
Fernanda Litt, ’87
David Feldman, ’91