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divestment

Who Has the Power? My Journey into Swat Bureaucracy

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Ever since the Board of Managers chose not to divest from fossil fuels, I’ve started envisioning the people “at the top” of the Swarthmore administration, who chose to ignore the strong student support of divestment. In my more dramatic moments, I imagined rows of white men in suits, all puppets of the fossil fuel industry, deliberately frustrating wide-eyed idealist students at every turn through heinous bureaucratic tricks. Basically, a combination of the Koch brothers and very unhelpful DMV employees.

That vision was very unfair of me; only half of the Board of Managers is composed of white men (take into account white women, though, and the Board is looking less diverse). Many are involved in philanthropy and nonprofit work.

But if the board isn’t all that bad, why did they avoid directly engaging with students? When student protesters moved to Kohlberg, where the Board of Managers planned to meet in the Scheueur Room, Dean Liz Braun heroically escorted the Board members into the room through the kitchen door, supposedly to avoid disturbing the protest. Call me a cynic, but I doubt they cared about disrupting the protest that much. Rather, I have a feeling they wanted to avoid the protesters (who were not, by any definition, a bloodthirsty bunch).

Searching through the managers’ biographies did not suggest any scandalous conflicts of interest that would explain the Board’s unwillingness to converse. A number of managers have worked for firms that the average noble, socially conscious Swattie would probably condemn — such as Goldman Sachs and JP Morgan —- and the members of the Investment Committee all work in finance, a number of them in private equity firms, but that is to be expected. I did find a potentially troubling connection through a non-Swarthmore publication; Chris Niemczewski ‘74, the Investment Committee’s chair, “is responsible for investing the endowment and finding external consultants and managers to invest and manage it;” he is also the president of the investment advisory firm Marshfield Associates, which Swarthmore paid almost $200,000 in investment management fees. One of Marshfield Associates’ major investments is in Deere and Devon Energy, a gas and petroleum producer. The Phoenix has previously noticed and discussed this possible conflict of interest. (http://swarthmorephoenix.com/2014/10/23/investment-committee-conflict-of-interest/).

It is worth noting that, before I started this research, I had no idea how powerful the Board of Managers truly is. I naively assumed that, since President Smith and the various deans were the ones from whom we got emails from and with whom we communicated, they were the people in charge. But it’s the Board that hires — and fires — the college’s presidents, that approves the Swarthmore budget, and that approves changes in salaries (http://swarthmorephoenix.com/2015/09/03/top-salaries-at-college-similar-to-those-at-peer-institutions/). Even in the Swat Bubble, money has power. President Smith inspires respect, even affection, in students. I was at the Mountain Justice sit-in, and appreciated that she took the effort to come and check on the students. I was less appreciative of the fact that she somewhat woodenly repeated the same line about the Board having made its decision. We’d like to think that Val calls the shots; but, ultimately, she seems to have little formal power with the managers.

Again, it’s unfair to generalize. The Board does have some diverse backgrounds, and I imagine there was some debate about divestment. Board Member David Singleton even came by the sit-in to engage with students, and admitted that divestment had proved effective in other colleges. Yet the managers as a whole proved unwilling to extend that debate to include students.

“We talk a lot about dialogue and critical thinking, and the Board wasn’t willing to engage with questions that are difficult,” points out Stephen O’Hanlon ‘17, a Mountain Justice coordinator. “[It’s] unacceptable that they aren’t engaging with something that was accepted by such a wide margin.”

In all the time I spent looking through the webpages for various Board committees, I did not feel as if the Board or the President’s Office was trying to hide shameful secrets or throw anyone off the track. From what I understand, Swarthmore is managed like an ordinary, not particularly corrupt private company. But maybe that’s the problem. We’re not just any private company, with shareholders and investors. Swarthmore’s very purpose is to “make its students more valuable human beings and more useful members of society…with a deep sense of ethical and social concern.” (Incidentally, I wasn’t aware one could become a more valuable human being).

In the world of private companies, presumably Swat students would be the equivalent of shareholders. But we won’t just be content with getting an end of they year report (or multiple emails from various offices, or a Self-Study Action Report that mentions the need for administrative transparency). We won’t just read the very bland short bios of the managers, and try to navigate the Board’s 11 committees through unhelpful webpages. Some Committees’ roles are not even explained — such as the Compensation Committee. Google has revealed that Compensation Committees decide salaries. Nothing specifies whose salaries, but I assume that this is the Committee of whom staff members would like to stay on the good side.

The Board proudly proclaims its commitment to Quaker values. Chief among these should be a willingness to fully include students in the decision-making process – to act by consensus, rather than avoid us. O’Hanlon worries that “there’s no formal way for students or faculty to influence the Board of Managers.”

The ultimately fruitless referendum seems to support O’Hanlon’s concerns. But Swat students have brains, passion, and a real commitment to changing things. In a few decades, some of us will be the next Board of Managers. Are we willing to speak out now, ask the Board for more transparency, more engagement with students, if not more inclusion in their decisions? Or will we also be sneaking in through the kitchen door 30 years from now?

 

(This article by a non-Swattie discusses the College’s endowment and investments, in addition to the one conflict of interest I may have found. It is definitely worth reading, at least to gain one outside perspective. http://www.philly.com/philly/columnists/20150720_Richly_Endowed.html)

 

Why the Board should listen to the divestment referendum

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In 2013, I was skeptical of divestment. I reasoned through simple, and undoubtedly naïve, cost-benefit analysis that the expected gains in terms of direct reduction of fossil fuel consumption did not outweigh potential losses faced by the college. Nevertheless, I decided to vote in favor of partial divestment.

  In my opinion, the strongest argument against divestment is that it will not directly lead to the reduction of fossil fuel consumption. I still believe this is probably true, but I recognize that this is a severely limited view on the potential benefits of divestment. Is the average American paying attention to Swarthmore’s endowment? No. Are they paying attention to the divestment movement? Probably not. But the average American does know about climate change, and divestment has to be included as part of the larger movement to combat the irreversible human-induced damage to our planet. Although Swarthmore’s commitments to reducing its carbon footprint, including the Sustainability Framework, are admirable, climate change will not be solved by individual self-restraint. It requires a global movement that begins and ends with societal perceptions of fossil fuels. It’s easy to dismiss divestment by claiming that nobody pays attention to the movement. But, when we look back years from now, it’ll be incredibly difficult to justify why we did not divest.

  What I find most frustrating is the assurance that maintaining our investments in fossil fuels is the way to “yield the best long term financial results.” I won’t go so far as to say the divestment will be absolutely profitable, nor will I claim to know more about investment than the Board of Managers. However, they are not the only authorities on the subject. Expert views on the cost of divestment are more mixed than conclusive, and, more importantly, there is real financial risk involved in maintaining our holdings. Even if we take the Board of Managers own $200 million shortfall as divestment’s worst possible outcome, who’s to say that retaining our holdings is safer?

  Solar prices have fallen below wind prices in developing countries. BP’s 2017 Energy Outlook expects the number of electric vehicles to expand from 1.2 million in 2015 to 100 million by 2035. An (albeit optimistic) Grantham Institute at Imperial College study expects demand for coal and oil to peak in 2020. We are biased to expect past trends to continue unchanged, and if they don’t, we should be very concerned about being left holding the empty oil drum. Professionals with billions of dollars at stake failed spectacularly in 2008, and I don’t see any reason to believe massive strides in our ability to avoid herd mentality and predict the future have been made in the last decade.  

  It remains to be seen why we as students should be forced to accept the judgment of professional investors when there is no clear consensus in the expert world. If we believe students deserve any say at all in how the endowment is invested, why can’t partial divestment be an appropriate compromise? An 80 percent vote in favor of divestment from 55 percent of the student body deserves more than an immediate dismissal; there should be real debate.

  Divestment won’t drive fossil fuel companies to financial ruin. Still, whether due to a whirlwind of technological development or an uptick in visible damage from natural disaster, the consumption of fossil fuels is going to have to end sooner or later. If we are truly concerned about long term financial results, the real question shouldn’t be “why divest?” Instead, it should be “why not divest?”

 

We forced divestment from apartheid, we will do it again

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Yesterday, SGO announced the results of the student referendum on fossil fuel divestment. The referendum passed by a landslide: 80.5 percent of voters agreed that Swarthmore College should divest from fossil fuels with 55 percent voter turnout. The results of the referendum demonstrate a clear mandate from the student body for the Board to take action on divestment.

Despite this mandate, President Valerie Smith and Board Chair, Thomas E. Spock ’78, released a statement Wednesday afternoon in which they upheld the Board’s 2015 decision not to divest while ignoring the referendum’s popular support on campus. The Board’s decision to immediately cast aside this referendum and refuse to seriously engage with the issue of divestment in unacceptable, particularly as the fossil fuel industry partners with the Trump administration to push forward climate policies that will threaten millions of lives.

Mountain Justice’s fossil fuel divestment campaign is not the first divestment campaign on Swarthmore’s campus. Swarthmore students began to organize against apartheid in South Africa as early as 1965, and in 1978 they launched a divestment campaign with a petition highlighting the injustices of apartheid, the College’s investments in companies involved in South Africa, and the College’s Quaker values.

The anti-apartheid divestment campaign spanned eleven long years: eleven years of being ignored, sidestepped, and rejected by the Board. Students circulated petitions, staged sit-ins, invited speakers, formed human chains, and slept on Parrish porch. Despite the Board rejecting divestment four times, students and faculty persisted, taking increasingly escalated action, and in 1989 the Board committed to a plan to divest from apartheid by 1990. Due to student efforts, the College finally decided that it was morally and politically unthinkable to continue to support apartheid.

As President Smith and Board Chair Spock cited in their email, following the decision to divest from apartheid, the Board adopted new investment guidelines stating that the “Investment Committee manages the endowment to yield the best long term financial results, rather than to pursue other social objectives.” While we understand that some restraint around using the endowment for social purposes is important, the Board’s blanket rejection of any social concerns with our investments is morally unconscionable. Our investments do not exist in a vacuum. Investing in these companies directly undermines the social and political work the college advocates and pursues both on campus and beyond. Unless the Board thinks that divestment from apartheid was a mistake, their current objection to any divestment proposals is morally and politically inconsistent.

As our “Fossil Fuel Divestment Finances Fact Sheet” points out, our current proposal not only sidesteps the past financial concerns of the Board but could also ultimately serve as a financial boon to the College. Additionally, we find it deeply disturbing that the reasons President Smith and Board Chair Spock cited for ignoring the student referendum — these guidelines as well as previous rejection of fossil fuel divestment — would have prevented the College’s divestment from apartheid had students not persisted. Of course, the system of apartheid in South Africa and the fossil fuel industry are by no means the same. However, both the apartheid regime and the fossil fuel industry are rogue social actors that pose mortal threats to millions of people.

Today, we stand at a turning point in history on the brink of climate disaster. The devastating effects of climate change cannot be understated: sea levels and temperatures are rising; droughts, floods, and extreme weather patterns are increasing in intensity and frequency; and those most impacted by the crisis — indigenous communities, communities of color, and low-income communities —are met with brutal force and militarized police when they peacefully resist the pipelines, incinerators, and refineries routed through their land and lives.

Despite this increasingly urgent reality, we are rapidly going in the wrong direction. From appointing as Secretary of State the former CEO of Exxon, a company that funded climate denialism and hid the truth from the public for decades, to appointing Environmental Protection Agency administrator Scott Pruitt, a man who sued the agency he is now supposed to run over a dozen times during the Obama administration, the Trump administration has made it clear that it cares more about profits than people’s lives and the environment.

Now more than ever, we need institutions like Swarthmore College to be a leader and take action on this urgent issue. Neutrality is no longer an option; continuing to invest in companies that place profit over people, trample indigenous sovereignty, fund climate denialism, and poison our air, water, and land is not a neutral stance.

Nor can action be limited to efforts on our campus. We must stigmatize the fossil fuel industry and revoke their social license to operate. Teaching students about sustainability and adding a carbon charge are important examples of climate action. However, continuing to invest in the very companies that fund climate denialism and lobby Congress to block meaningful climate action ultimately undermines these efforts. By stigmatizing the fossil fuel industry, divestment will help create the political will for these other important initiatives.

Believing that it is urgent for Swarthmore to send a powerful moral message in this political moment, we have offered a compromise: our proposal for partial divestment avoids the main concerns, such as a potential loss in financial gains, that the Board has cited in the past. And yet, the Board refuses to listen to the student body, telling us that the situation has not changed in the past two years.

But the situation has changed. Not only does the proposal in the referendum avoid the Board’s previous financial concerns, but a mandate from students and a political situation that demands institutional leadership creates a new imperative for divestment.

The Board has refused to listen to the student body before on matters of divestment. Had students not persisted, the College may never have divested from apartheid in South Africa. Now, like then, we must demand leadership from our institution, or we risk looking back, years down the line, and realizing that we stood on the wrong side of history. We cannot stand idly by and let that happen.

In referendum, vote for divestment, vote for justice

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From foreign conflict to inadequate healthcare to domestic militarized, racist policing, the government controlled by Donald Trump and the Republican Party has exacerbated existing problems, leaving widespread suffering and even death in its wake. But perhaps the issue around which the most devastating effects are being produced is climate change. As a result of reckless federal policies, there is an increasingly high potential that more people will not only feel climate change’s effects now, but will continue to starve, be displaced, and die for centuries to come.

Even under President Obama, the transition away from fossil fuels, which is necessary to prevent devastating temperature increases and increasingly frequent and extreme natural disasters, was weak. But under Trump, concern for the future of the planet has been replaced by concern for the profit of fossil fuel corporations. If the public could not rely on Obama to effectively prevent climate change, it certainly cannot rely on Trump.

Now is the time to take matters into our own hands. We must make climate change an issue that the government cannot ignore, make fossil fuel companies a problem that the public cannot ignore, and destabilize the industry that makes profits while it poisons oppressed communities and causes global damage that will last for generations to come. On campus, that means that we must divest from fossil fuels.

Divestment is one of the most powerful tactics we as college students possess to undermine the industries that carelessly cause climate change. Executives will not halt extraction of the product upon which their companies are based. Further, when the government does not act to restrict these corporations and instead seeks to deregulate them, it falls to the public to delegitimize the fossil fuel industry and make climate change a defining moral issue. To do this, hundreds of institutions have taken a stand through divestment, sending a clear and powerful message to businesses, governments, and other institutions that the fossil fuel companies are part of a rogue industry that has no place in a just future or within our institutions. The fossil fuel industry has recognized that this message poses a threat to them and has actively tried to stifle the divestment movement through public relations campaigns and legal action. As the campus that began the fossil fuel divestment movement, we at Swarthmore have the power to send a bold message on where we stand as an institution in this time of a climate change denialist government. This message will help to stigmatize the fossil fuel industry and push it further towards unacceptability in the mainstream.

   However, despite our considerable position of power and influence and the size of our $1.9 billion endowment, Swarthmore’s Board of Managers has consistently refused to divest. Now, when the Republican-controlled government is threatening our futures and millions of lives, it is our duty as students to unequivocally tell them that they must divest and reject their deadly neutrality. To give students a chance to send this message, Mountain Justice has organized the first referendum in the campaign’s history through the Student Government Organization. Students can vote online at http://bit.ly/DivestSwat on Monday, Feb. 20, and Tuesday, Feb. 21 to call on the board to partially divest.

While full divestment would be the most powerful action in the struggle for climate justice, the partial divestment proposal this referendum advocates for gives the board no excuse to avoid listening to our demands. It has three parts. The first is divestment from separately managed funds, which are essentially customizable funds, and makes divestment as simple as asking our managers to stop investing in the Carbon Underground list of the 200 largest coal, oil, and gas companies. As Christopher Niemczewski, chair of the board’s investment committee, said in the college’s Spring 2015 Bulletin, the college has separately managed funds so that “it is easy for a client to come to the investment manager with specific needs or requests, such as for a fossil-free portfolio.” The second part is asking commingled fund managers, under whom our investments are pooled with other institutions’ that already have fossil fuel free investment options to move our accounts to those divested funds. Since some of these managers do not have that option, our third request is that they move our investments to fossil fuel-free funds when they are available. This partial divestment proposal, developed after meetings with President Smith and Vice President of Finance Greg Brown, avoids the major financial challenges cited by the Board, namely the potential costs of changing managers. Simply put, this gives the board no legitimate financial reasons to avoid divestment.

   To pass, the referendum only needs 30 percent of students to vote. Of these 30 percent, a majority of those voting yes or no ― that is, those who do not vote “no preference” ― must vote yes for it to pass. Currently, over 50 percent of students and over 2000 alumni have signed MJ’s petition calling on the board to divest, so there is substantial support for divestment on or off campus. But to show the board that student support is strong enough to support a specific list of demands, we all must vote. Each yes vote is not only a call for the board to finally listen to the voices of students, but also a moral stand taken in favor of pushing the country toward just climate action in a time when the short-term greed of fossil fuel companies directs the climate policies of the government that supposedly represents us.

With our votes, divestment can once again be brought to the forefront of the board’s attention at their February meeting. While the referendum itself cannot force the board to divest, it will present a powerful message that students will not tolerate our institution’s neutrality as climate change causes worldwide suffering and is simultaneously ignored at the highest levels of government. But to send this message for climate justice, we all need to raise our voices and vote for divestment.

Students, faculty attend walk-out and teach-in for climate justice

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There is no shortage of public outcry across the country in protest of the newly established Trump administration. As recently as Monday, January 23rd, members of Swarthmore Mountain Justice, in collaboration with over 50 other colleges across the country, organized a walk-out / teach-in aimed at calling attention to the environmentally-threatening rhetoric of the Trump administration.

The walk-out / teach-in, though student run and organized, was a collective effort between Mountain Justice and appointed faculty to rally the general college population to reject climate denialism. A walk-out is a form of protests where participants walk out of their workplace or classroom to gather for a rally; a teach-in refers to a somewhat casual lecture made by expects aimed at educating protest participants.  For Mountain Justice, an organization whose main focus is to push the college to divest their endowment from fossil fuel companies, the proposed policies of the Trump administration are especially troubling as they hinder environmental justice on a larger scale.

Stephen O’Hanlon ’17, a longtime member and coordinator of Mountain Justice, spoke about how the Trump administration’s policies conflict with the cause.

“[On Friday,] Donald Trump was inaugurated as president of the United States. At noon, when I guess he officially took office, all of the information on climate science was taken off of the White House webpage. He’s nominated Rex Tillerson, the former CEO of Exxon … Companies like Exxon have been imperiling communities around the world and the very future of our generation, and now, they have [a] huge influence in this administration,” he said.

Trump’s nomination of Rex Tillerson for Secretary of State has been hotly contested because of his 40-year leadership role in ExxonMobil, an American oil and gas company attributed with the exploitation and ill-treatment of marginalized communities, as well as his well documented climate science denialism.

One example of this was a statement made by Tillerson during a 2013 annual shareholders meeting where he denied the existence of climate change, a phenomenon scientists have been consistently providing evidence for since the 1970s.

“If you examine the temperature record of the last decade, it really hadn’t changed … I know you will like to hear that as it don’t comport to some of the views of others, but last ten years’ temperatures had been relatively flat,” he purported.

Aru Shiney-Ajay ’20, Coordinator for Mountain Justice, called for Swarthmore to be proactive in its efforts to be socially and environmentally conscious.

“It’s a message to the Swarthmore community and board that, in an era of Trump’s administration with climate denialism so rampant, that Swarthmore can no longer afford to be neutral,” she said.

Protesting the Trump administration on different fronts is not new for Swarthmore’s population. In November, a few short weeks after Trump’s election, students organized a walk-out where hundreds of students, faculty, and staff joined in solidarity with immigrant populations to advocate for their rights and safety. This included the demand, which was eventually met, of the college becoming a Sanctuary Campus. Again, the pro-activism sentiments shared by many at the college was evidenced by the number of students participating in the Women’s March on Washington and Philadelphia to advocate for women’s rights in addition to healthcare, environmental justice, and the rights of marginalized groups.

Melissa Tier ’14, Sustainability Program Manager, lent her support to the students during the walk-out/teach-in, praising the efforts made by the students to protest.

“I certainly think that interacting, having a conversation, taking action against the climate denialism of our current administration is essential. That takes a lot of different forms; a teach-in is fantastic way to go about it, it’s one of many and I hope it continues,” she said.

On the topic of campus protest, Tier also spoke about the history of protest at Swarthmore and campus activism, noting that she thought that mass participation from the campus community was wonderful.

“A teach-in is an excellent approach, one that’s actually not new to Swarthmore…during my time as a student at Swarthmore, we definitely had teach-ins, some of them focused on sustainability and climate justice. I’m always in favor of multi-pronged approaches, both because they can address topics in different ways, and because they can attract different people. I think the more people you can get involved with a topic, the better,” she said.

The news of protests both on and off campus have served to mobilize many students; but some admittedly do not share the same fervor.

Ibrahim Tamale ’20 offered his opinion on participating in protests and why he doesn’t.

“I have not felt any effect socially, or any injustice done against me to go and protest or to take any action. I believe actions should be taken as a reaction to something, but if nothing’s being done to you personally or as a society, then I don’t see why you should be moving forward to take action. Actions should have goals, … and if there are no goals, I don’t see any precedence for taking action at the moment,” he said.

What warrants protest, in Tamale’s opinion, is tied to how deeply one’s sentiments runs for the cause they are protesting for.

“I believe people should only attend rallies and protests if they deeply align with the goals and the motives of those rallies and protests. Based on the friends that I have that have participated in protests in Egypt and Tunisia, I believe it’s all about willing to die for that cause … If people are deeply aligned with the cause and do believe that their rallying and protesting is not going to stop until their cause has been fulfilled, then yes. But if they’re going to do it for one to two weeks then stop, then no,” he said.

Mountain Justice Lead Organizer Abigail Saul ’19 explained the importance of engaging in protest against climate denialism.

“We all have a stake in this issue, and the stake looks different for everyone. Climate justice affects everyone, but it is an inequality multiplier, so it affects certain populations a lot more than it affects others. So, I think it’s important that we all recognize that and stand together with each other, as well as with communities that are going to be most affected by these issues,” she said.

Associate Professor of Sociology and Peace and Conflict Studies Professor Lee Smithey made mention of some of the things he commented on during the event.

“One of my fields of study is social movements; I talked for a couple of minutes about micromobilization … I then said that the calls for divestment shared by students, faculty, staff and alumni is a perfectly reasonable request under the circumstances … The fossil fuel companies’ dangerous business model is to try and make as much profit as they possibly can off of their product even if it means rejecting climate science … by extension, through our investments here at the college, we’re participating in the same plan. I challenged us all to ask really serious questions about that plan,” he said.

Smithey also spoke about the support provided by faculty and staff.

“I think that we are in a historic moment right now with the new administration. I think that there is wide concern among many faculty, staff and students because there are so many different fronts that are under threat at the moment … I counted at least 25 faculty and staff there. I think we should acknowledge that 20 minutes of sacrificing class time is not insignificant in a busy semester, and the fact that many faculty and staff turned out signaled support for the walk-out,” he said.

O’Hanlon asserted that it was imperative for the students and the college to take action in the wake of the new administration.

“As young people, we need to stand up for our futures, for communities around the world, and we need to call on our institution, Swarthmore, as an institution that espouses social justice values, to really stand with our generation, to stand with communities around the world, and to stand for basic science,” O’Hanlon asserted.

Eric Jensen, Professor of Astronomy, made a statement during the event which resonated with many participants, receiving the Swat-famous snaps of approval.

“Just because you don’t know exactly what to do, doesn’t mean you should choose to do nothing,” he said.

In this time of confusion and fear for many across the country, many students glean strength from the support of their peers. On the same token, with the same fear and outrage, many take it upon themselves to mobilize and actively rally against injustices. The pro-activism sentiments at Swarthmore have yet to dwindle and, in the coming years and policy changes introduced by the Trump administration, it remains to be seen what next students will participate in.

Divestment and the need for moral leadership on climate

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On Monday, thousands of students and faculty at colleges, high schools, and even two middle schools across the nation walked out of class to reject the deadly climate denialism of the Trump administration and demand moral leadership from our institutions.

Tuesday, the need for that leadership became even more clear. Donald Trump signed executive actions that attempt to restart the Keystone XL and Dakota Access pipelines. He took this action despite clear opposition from people whose land, livelihoods, and communities will be devastated, climate scientists warning of disastrous climate impacts, and hundreds of thousands across the country who organized and protested to stop them.

This should not come as a surprise. Trump has invested heavily in both these pipelines (a spokesman says he has resolved these conflicts of interest, but refused to provide evidence). He’s also appointed Exxon Mobil CEO Rex Tillerson, along with a slew of climate deniers, billionaires, and white supremacists to his cabinet. At noon on Inauguration Day, all mentions of climate change (along with pages on civil rights and LGBTQ rights) disappeared from the White House website. And these actions are likely just the beginning. Trump’s poised to eliminate all federal climate regulations and throw out our commitments in the Paris Climate Accord.

Over the coming months, Trump and the GOP will continue to promote policies to bail out the fossil fuel industry. They are authorizing unnecessary dirty pipelines in order to enrich Big Oil executives who were, until this election, facing the slow decline of their industry. They want more money and more power to take people’s land. This will contaminate more water and sacrifice more lives.

In turbulent times here and around the world, institutions of higher education have played critical roles in standing up for rights and justice against authoritarian and repressive governments. Throughout our own history, Swarthmore has been a leader in social justice and stood up for what was right, even if it wasn’t popular. At this moment, colleges like Swarthmore must be the moral leaders our president is not, on climate justice, and on a range of social justice issues. We must be a moral anchor and a beacon of hope in these trying times.

Our $1.9 billion endowment is one of our most powerful tools for showing this moral leadership. By taking our investments out of the industry, we are saying it is wholly incompatible with our values as an institution. It isn’t about hurting share prices, but rather about stripping the fossil fuel industry of its social license to operate. We’ve already seen evidence that this is tremendously effective. five years ago, fossil fuel divestment was started right here on this campus. Today, the movement has divested $5 trillion.

The fossil fuel industry’s response shows the movement’s success. In 2014, the Australian Coal Council tried to make divestment illegal because it was threatening their profits. The Alberta Oil Magazine warned executives “to ignore divestment at their own peril.” Last year, the Independent Petroleum Association of America began an extensive PR campaign called “Divestment Facts” to discourage administrations and students from supporting our movement. The morning of the national day of action, they urged students to #StayInClass. When the Board of Managers said “no” to divestment, the Independent Petroleum Association of America applauded the decision in the press. As this industry continues to partner with and profit from the Trump administration, it is past time that Swarthmore makes sure we are no longer applauded by the fossil fuel industry.

As Trump’s administration and the fossil fuel industry continue to push through policies that will put millions of lives on the line and threaten our future, it will be hard for us to show credible leadership when we are investing in the fossil fuel industry, in companies like Dakota Access that are trampling indigenous rights and in companies like Exxon that have been popularizing for decades the climate denialism that Trump espouses. We need to use every tool at our disposal to stand against this industry and this president. By divesting, we can make a powerful statement: this industry’s business model that profits off economic and racial injustice and that is wrecking the climate is incompatible with our values as an institution.

We know divestment cannot happen overnight, but there are steps we can take right now. Some of our endowment is held in separately-managed accounts. As Board Investments Committee Chair Chris Niemczewski said in the Spring 2015 Swarthmore Alumni Bulletin, with these funds, “it is easy for a client to come to the investment manager with specific needs or requests, such as for a fossil-free portfolio.” We also know that many of our other managers of more traditional commingled accounts have fossil-free options, meaning that to divest those accounts we just need to call the managers and ask them to transfer our money to one of their fossil free funds. This would avoid the major challenge to divest raised by the Board, which is that Swarthmore would need to switch our investment managers.

When the President of the United States is actively threatening communities and the very future of this planet, there is no room for neutrality. We must take prompt action and we must show leadership. The clearest, most powerful way to do that is by ending our investments in the fossil fuel industry. Next Wednesday, Mountain Justice are meeting with President Smith and we look forward to working with her and the Board to take some of these common sense steps to stop our support of this industry.

Yale divested, why haven’t we?

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In April, Yale University, which has one of the highest performing endowments in the world, announced that it would partially divest its endowment from fossil fuels, citing the financial risks of fossil fuel holdings. It began divesting simply by asking managers to sell off fossil fuel stocks. Yale’s steps toward a just and sustainable future fundamentally change the conversation on divestment here at Swarthmore. In fact, Swarthmore’s endowment is modeled on the system of active external managers that Yale pioneered. Similar decisions from the University of Maryland and Syracuse University show that divestment is not only a powerful tool to take action as an institution for climate justice, but also financially prudent, even for our type of endowment, and increasingly popular. Yesterday, we released a report (which can be found at swatmj.org/report) on how these divestment decisions at other schools can apply to Swarthmore and detailed a specific proposal for how Swarthmore could divest over the next five to ten years.

Since students and faculty began calling for divestment in 2011, our Board of Managers has argued that divestment is impractical at Swarthmore due to our complex endowment structure that requires several investment consultants to aid in selecting approximately 70 managers. For years, this issue was a very real and significant, though not insurmountable, challenge for divestment at Swarthmore. Indeed, in 2011, when Swarthmore launched the first ever fossil fuel divestment campaign, there were very few alternative options for fossil fuel free investments that could meet Swarthmore’s performance standards. The Board argued that while small schools with simple endowments might be able to divest, we could not do so at Swarthmore. Specifically, they justified their unwillingness to lead by saying that Swarthmore took direction from schools like Yale, which pioneered the investment model Swarthmore uses, and that the handful of small schools who were divesting had no impact on Swarthmore’s financial decisions.

Today, however, the story could not be more different. Not only has Yale divested, but so have endowments totalling over three trillion dollars, ranging from the Norwegian Sovereign Wealth Fund, the city of Washington D.C., and the Rockefeller Family Fund, which was built off the family’s oil fortunes. Leading universities including Oxford, Stanford, and Edinburgh have all divested. A growing chorus of financial and political leaders, including former Shell Chairman, Mark Moody-Stuart, billionaire investor Tom Steyer, former Vice President Al Gore, and UN Climate Chief Christiana Figueres ‘79, have advocated for divestment as a sound financial decision. Even investment bank HSBC, in a report to investors, advised divestment, warning that investors who stay in fossil fuels “may one day be seen to be late movers, on ‘the wrong side of history.’”

At the same time, the need for Swarthmore to take action is increasingly urgent. Whether it is superstorms like Sandy and Katrina, extreme drought or heat, wildfires, flooding in Louisiana, or rising sea levels submerging homes on coastlines and island nations, climate change is happening in the here-and-now. And it is people of color, low-income people, and young people that are and will be most affected as climate change continues to worsen. 2015 was the hottest year on record. The previous record was set only one year before. We are running out of time, and it is urgent that Swarthmore act now to remove its support from the companies pushing us closer to the point of no return.

Despite this urgency, the fossil fuel industry and their political allies are doing everything they can to prevent the transition to renewable energy because, quite simply, it would be devastating to the industry’s bottom line. In order to keep warming below the two degrees Celsius mark agreed to at the Paris Climate talks, which UN scientists say would give us a good chance of preventing catastrophic, irreversible climate change, humans cannot emit more than 473 gigatons of carbon in the atmosphere. This calculation means over 84 percent of proven fossil fuel reserves, worth upwards of 34 trillion dollars, must be left in the ground.

In the past few months, we’ve seen two examples of just what the fossil fuel industry is willing to do to maintain its destructive business practices. The media has recently picked up on the inspiring indigenous-led resistance to the construction of the Dakota Access Pipeline. If completed as planned, the pipeline would threaten the clean water access of the thousands of residents of the Standing Rock Sioux Tribe’s reservation, as well as the millions of people living downstream. In an attempt to end the protests, the company sent in private security with pepper spray and attack-dogs. Further, Exxon is suing state Attorney Generals for investigating the company’s decades-long cover-up of its research proving the existence of anthropogenic climate change in an effort to silence its critics. Through its investments in the fossil fuel industry, Swarthmore continues to lend its political and financial support to projects similar to the Dakota Access Pipeline as well as to the fossil fuel industry’s stranglehold over our elected officials.

The fossil fuel industry is not a normal industry. It is a one-of-a-kind rouge industry with a fundamental business plan that is incompatible not just with Swarthmore’s values of social responsibility and science, but also the possibility of a livable future for our generation.

The massive shift in investment and policy we need over the next five to ten years is not politically possible in the United States if we do not counter the power of the fossil fuel industry. The divestment movement has already been doing just that, shifting the international political discourse on climate. As early as 2014, an Oxford University study found that “the fossil fuel divestment movement [had already triggered] the stigmatization process, which poses a far-reaching threat to fossil fuel companies and the vast energy value chain.” At the UN Climate Conference last December, world leaders used the divestment movement as a moral imperative for action. NRG Energy, the largest publicly-traded electricity company in North America, committed to reduce emissions by 90% by 2050, cited how the fossil fuel divestment movement was stigmatizing companies that remained tied to fossil fuels. The fossil fuel industry’s own actions show the movement is posing a serious threat to their bottom line. The Australian coal industry has tried to make divestment illegal, claiming that it unfairly burdens them because “stigmatization [from divestment] makes it difficult for an industry to engage with its customers, attract employees, and more importantly access capital for investment purposes.”

In light of these new financial developments and the increasing urgency of the climate crisis, we request to meet with President Smith to discuss how Swarthmore can align our investments with our values. President Smith herself has previously noted the role that institutions play in moments of crisis like the one we are facing now, saying, “Historically, students in colleges and universities across the globe have risen to the challenge of calling to the attention of their institutions matters of social and political urgency. I think each generation, first of all, needs to be grateful to students for asking us to pay attention to areas we may not have attended to sufficiently.” We agree that the climate crisis is a matter of social and political urgency that requires us to act accordingly.

As the birthplace of the divestment movement and a highly respected institution, Swarthmore’s decisions around the climate crisis hold a lot of weight. As honorary degree recipients Noam Chomsky, John Braxton, Arlie Hochschild, Lotte Bailyn, Lorene Cary, and Barbara Hall Partee noted in their endorsement of divestment last February, “Whether it was divesting from Apartheid, refusing to bow to McCarthyism, developing leaders in the civil rights and peace movements, or admitting women from its founding, Swarthmore has been a powerful voice for justice at critical moments in history. Right now, we are at one of those points.” We look forward to working with President Smith and the Board to develop a plan for how Swarthmore can continue to lead in the fight for a just and sustainable future—a fight that includes the decision to divest from the fossil fuel industry.

If you want to learn more about what this means for Swarthmore and what’s next for the campaign, join us this Friday, September 23rd, at 5pm in Sci 183 for a training on the report and the divestment theory of change.

Works referenced in this piece:

http://www.nytimes.com/2014/05/17/business/a-clash-of-ideals-and-investments-at-swarthmore.html  

http://gofossilfree.org/commitments/

https://www.theguardian.com/environment/2015/jun/04/former-shell-chairman-advocates-fossil-fuel-divestment

http://www.newsweek.com/hsbc-warns-clients-fossil-fuel-investment-risks-323886?rx=us

http://www.nytimes.com/2016/01/21/science/earth/2015-hottest-year-global-warming.html

http://www.smithschool.ox.ac.uk/research-programmes/stranded-assets/SAP-divestment-report-final.pdf

http://www.minerals.org.au/file_upload/files/reports/A_critique_of_the_coal_divestment_campaign_Sinclair_Davidson_Jun_2014.pdf

Swarthmore should follow Yale’s lead, divest

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On April 12th, Yale’s Chief Investment Officer David Swensen announced the school’s decision to partially divest its endowment from fossil fuels. Swensen cited not ethical reasons, but financial prudence, as the top motivator behind the decision. Yale’s divestment came after Swensen asked their investment managers to consider the potential risks that investments in coal and oil pose to their endowment. One of the firm’s founders said they agreed climate change and carbon pricing were “unknowable risks and fossil fuel producers with significant carbon footprints were declining businesses, a profile the firm preferred to avoid.” Yale’s divestment is only the latest example of college and university endowments divesting in exactly the way Swarthmore’s Board of Managers claims is impossible.

Yale’s decision to withdraw $10 million of their remaining investments in the fossil fuel industry came after months of conversation with Yale’s external investment managers about the risks of continuing to invest in coal and oil. Swensen noted that “a few managers held positions we felt were inconsistent with our principles. Thermal coal miners and oil sands producers are two of the obvious industries that would suffer if regulation imposed the social cost of the carbon emissions on producers.” Two of Yale’s external managers maintained investments in industries incompatible with Yale’s principles, but Swensen prompted both managers to sell their holdings in oil and coal.

Yale saw a 11.5 percent return on their endowment in fiscal year 2015. Yale’s endowment is highly regarded as one of the best performing college endowments in the country. That Yale’s Chief Investment Officer has ruled divesting from fossil fuels financially prudent should not be taken lightly by Swarthmore, and makes clear that there is a strong financial case for divestment on financial grounds as well as moral political ones.

Swensen said that Yale’s endowment currently maintains only minor exposure to the oil and coal industries. But as the Yale case exemplifies, divestment is a process, not a leap that is taken overnight. Swarthmore could easily start taking small steps like asking our managers to move investments away from risky fossil fuels and identifying managers with funds in line with our financial and moral principles. This could begin the process of eliminating the financial risk posed by fossil fuel investments and taking the crucial step of revoking our support from an industry that is incompatible with a sustainable future.

This month, a slew of divestment victories means Swarthmore stands increasingly alone in refusing the call to divest. This past Monday, the University of Ottawa also joined the ranks of institutions committing to divest from fossil fuels. On April 12th and 13th, a total of 43 students were arrested for sitting in for divestment at University of Massachusetts at Amherst and Harvard, prompting UMass President Marty Meehan to state, “I want to make UMass the first public university in the country to divest our direct holdings from all fossil fuel companies.” On April 15th, one year after students were arrested for taking nonviolent direct action for divestment, the University of Mary Washington passed a motion to maintain a portfolio that is 98% divested from the largest 200 fossil fuel companies. Students have since begun sit-ins and taken direct action at Columbia, Vassar, NYU, Northern Arizona University, University of Montana, and James Madison University.

In order to successfully avert runaway warming and to meet the goals laid out at the Paris Climate talks, more than 84% of current fossil fuel reserves must stay in the ground. This means there is a “carbon bubble,” and that there will be a severe devaluation of fossil fuel stocks as we make the necessary transition away from fossil fuels. We are already witnessing this effect. Peabody Coal, the world’s largest private sector coal company, filed for bankruptcy early this month citing an “unprecedented industry downturn.” If carbon assets are not stranded in the very near future, then the future holds approximately 4.5 degrees of warming or more, according to the IPCC. Not only will this mean a devastating loss of human life, but it will also almost certainly entail a collapse of the global economy—and Swarthmore’s endowment along with it.

While members our Board of Managers questions the effectiveness of divestment as a tactic, the fossil fuel industry takes it quite seriously. Prior to filing for bankruptcy, Peabody Coal listed the fossil fuel divestment movement as a significant risk to their profitability in their annual Form 10-K report, warning that fossil fuel divestment “may adversely affect the demand for and price of securities issued by us, and impact our access to the capital and financial markets.”

Yet somehow, despite a community mandate from the majority of the student body, a historic faculty resolution in favor of divestment passed last May, as well as a letter signed by Noam Chomsky and six other honorary degree recipients. Swarthmore’s Board has continued to stand on the wrong side of history by remaining invested in fossil fuels. This may be less surprising in light of the connections Swarthmore Board members have with the fossil fuel industry. Rhonda Cohen is a director of Glenmede, a financial manager founded on the Sun Oil Company fortune. Cohen, along with Harold Kalkstein and Sam Hayes have past and present connections to over $3 billion in investments in fossil fuel companies.

The urgency of climate change means we must do everything in our power to move away from the carbon economy that is poisoning our planet and harming frontlines communities. Not only do we have a moral obligation to divest, but as Yale’s actions would suggest, a fiduciary one as well. Sparked on our campus five years ago, the movement to divest from fossil fuels has since catalyzed the divestment of funds totaling over $3.4 trillion by more than 500 institutions worldwide. We call on the Board of Managers to follow the example of these institutions and begin to divest our endowment of fossil fuels. Swarthmore must revoke its support of a destructive and outdated industry and invest in a just and sustainable future.

Works Referenced

http://yaledailynews.com/blog/2016/04/12/yale-begins-divestment-from-fossil-fuels/

http://leave-it-in-the-ground.org/wp-content/uploads/2016/02/Post-Paris-Carbon-Budget-LINGO.pdf

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