Editor’s note: This article was initially published in The Daily Gazette, Swarthmore’s online, daily newspaper founded in Fall 1996. As of Fall 2018, the DG has merged with The Phoenix. See the about page to read more about the DG.
Editor’s Note: At their 50th reunion last year the Class of ’67 presented a panel on “Swarthmore and Climate Change.” Panelists included members of the class as well as then-Board member David Singleton ’68 and Stephen O’Hanlon, ’17, a leader in Swarthmore Mountain Justice. Charles Bailey, ’67 and panel chair transcribed the session. Isabelle Hoverman ’67 and 50th reunion chair, wrote this summary, which is being published in The Gazette with no content changes.
On May 27, 2017, the Class of ’67, as part of its 50th reunion, convened a panel discussion on the topic Swarthmore and Climate Change – Moving Beyond Confrontation to Consensus which was attended by approximately 60 alumni, faculty, students and staff. The panel consisted of six alumni: Charles Bailey ’67, who has spent most of his life as a grantmaker with the Ford Foundation in Asia and Africa; David Singleton ’68, a member of the Board of Managers; Stephen O’Hanlon ’17, a leader in Swarthmore Mountain Justice, which has been leading discussions with the College Administration and Board of Managers on divestment; Spencer Putnam ’67, who has had a career in business and social action in Vermont; Menno van Wyk ’67, a leader in the business community in Washington state as well as a main force behind a carbon tax initiative on the November 2016 ballot that received forty-two percent of the vote; and Phyllis Wang Wise ’67, who was Provost at the University of Washington and, more recently, Chancellor of the University of Illinois. The question before the panel was ‘How can the College address the existential threat posed by climate change?’
It is clear that we are facing a climate crisis and there is no question that it is a global problem, although in the U.S., a credibility gap exists about the reality of climate change and the politics surrounding it. A Gallup Poll in 2016 showed that sixty percent of Americans were concerned about climate change, but another survey that same year found that nearly three-quarters of Americans believed there was no scientific consensus on the seriousness of this problem. The impact of climate change and, more specifically, the role of fossil fuels have been at the center of a discussion at Swarthmore since 2010 when a group of students travelled to West Virginia where they saw the adverse impact of mountaintop removal coal mining techniques and its impact on human health. The students returned to campus resolved to act and formed Mountain Justice, which then led to the first-ever fossil fuel divestment campaign. Since then, the movement has been noticed both nationally and internationally. Schools such as Stanford, Columbia, Barnard and Yale, cities like New York, New York, Washington, D.C. and Paris, France, and foundations including the Ford Foundation and the Rockefeller Family Foundation have either divested or started a process to divest investment in fossil fuels. There have been a number of referenda from students and faculty at Swarthmore as well as petitions signed by more than 2,000 alumni asking the Board of Managers to examine its policy for investing in fossil fuels. The Managers have so far refused, citing two major issues. The first is purely financial; the second is a policy passed in 1991 preventing the College from using the endowment for any social purpose, even if it does not have a financial cost. Income from the endowment now provides more than half the College budget, fifty-two percent in recent years, while thirty-nine percent comes from student fees, room, board and tuition. Earning a maximum return on investment from the endowment, therefore, becomes the sole focus of investment. The Board relies on about 60 managers who manage the College’s endowment. The College and the Board of Managers do not directly manage any significant amount of money although a recent survey by the Board indicated that seventy-seven percent of the managers look at sustainability issues in making investments. The Board also thought that the College’s divesting from fossil fuel companies would not significantly impact those companies, either their focus or their bottom line and, therefore, it was not worth the risk of a possibly lower-performing Portfolio. There have been significant efforts on campus by both the students and the administration regarding sustainability including reducing waste, particularly physical waste by reducing the proportion of it that goes into the incinerator rather than to recycling or composting.
In order to further the Administration’s goal of moving towards zero waste and a carbon-neutral future, the Board has provided funds to be used for fellowships for students to work on these issues [1] and has adopted a policy of carbon charges and provided funds in the budget to cover these. A community garden behind Sharples dining hall supplies the kitchen; the President’s Sustainability Research Fellowship funds 18 student projects each academic year. The College has committed $12 million toward making the new Biology, Engineering and Psychology (BEP) building a model for environmentally intelligent construction practices and energy usage. Additionally, the College decided to establish a Fossil Fuel Free Endowment Fund that will enable alumni and others to contribute to an alternative fund that will not invest in fossil fuels. [2]
Acknowledging that on campus the College is moving in a responsible direction, the panel discussion and break out sessions focused on a number of topics that all come back to Swarthmore’s mission. Swarthmore seeks to help its students realize their full intellectual and personal potential combined with a deep sense of ethical and social concern. The new campaign for the College, Changing Lives, Changing the World, reinforces this long-standing commitment. Accordingly, the panel organized the discussion under six headings:
- Values
- Process
- Governance
- Fiduciary Responsibility
- Decision Making Capacity
- Outcomes
At what point do the Board and Administration of the College examine the alignment among the values of the College, the values the College hopes to instill in its students, and the College’s investment policies? The Board of Managers appears to take a stand that is at odds with the preferences and beliefs of many members of its prime constituencies—students, faculty, and alumni. The Board has made little outreach to alumni and disseminated little information about the controversy over the College’s investment in fossil fuels. This past spring, Swarthmore Mountain Justice developed a proposal for partial divestment of fossil fuels but did not receive a response about why such a proposal would not be feasible. The greater issue seems to be not whether and how the College divests from fossil fuel companies, but the adherence to the 1991 policy (last examined in 2015): the ‘Investment Committee manages the endowment to yield the best long term financial results, rather than to pursue other social objectives.’ While the major responsibility of the highest levels of administration is to think about the long-term strategic direction of the College, a real tension exists with the urgency of now—where endowment funds will come from in the next few years. This issue becomes an even more pressing one today because of changes in the tax code that may affect both the willingness of donors to give large sums to the College as well as the tax-free status of the College endowment. But the responsibility of the College is greater.
Three areas must be considered when thinking about where the College should be in the future. First and foremost are the students. They are what distinguish academic institutions from corporations. The second is the role of academic institutions. They are on the cutting edge of discovery and scholarship. The third is that academic institutions should be contributors to their communities, to the state, the nation, and the world – thus ‘Changing Lives, Changing the World.’ It is important for the leaders of the College to be willing to listen and learn from key stakeholders – students, staff and faculty, and alumni. The College needs to consider that times have changed; that it may be time to change course. When times change and new information becomes available, it is essential that the administration and the Board of Managers become learners and take on the important willingness to change direction. Great educational institutions share certain desires. They want to be leaders, not followers. They want to be in the forefront of making important decisions for students and for society. Leaders of such institutions should be open to discussion, no matter how uncomfortable, about the reasons for their views. A willingness to hold uncomfortable discussions exemplifies strong leadership. Given the mission of Swarthmore, to help its students realize their full intellectual and personal potential combined with a deep sense of ethical and social concern, the focus of the current capital campaign, Changing Lives, Changing the World, and Swarthmore’s strong Quaker tradition, would divestment from fossil fuel companies necessarily be such a bad thing? Twenty years ago that might have been true, but investing in coal, petroleum, and other nonrenewable forms of energy is no longer as financially attractive.
President Smith has stressed the value of inclusion and diversity at Swarthmore for its students on campus and, more importantly, for the global population, especially in issues such as environment and climate change as well as social and health equity. We hope that the Board of Managers would not be tied to a principle they approved in 1991 – more than a quarter of a century ago. The question is not only whether Swarthmore divestment would impact a particular industry but how the College inspires others to address actions which accelerate climate change.
Two questions underlie the divestment issue. One, how would Swarthmore College’s divestment affect a particular industry, either directly or indirectly? And two, how can the College inspire others to address actions that accelerate climate change? The focus cannot be totally on whether the College’s divestment would directly affect a particular industry. For the Board of Managers to state that divestment would not have an impact on fossil fuel companies is analogous to saying that Swarthmore students would not be able to effect change in the world. Indeed, the College has provided tools to facilitate and inspire students to find solutions to the myriad problems associated with climate change. The issue can be seen as a teachable moment, not simply because Swarthmore students, historically, are intellectually curious and bright, but also because the urgency of the issue demands much more than what all of us – students, faculty, and alumni alike – are currently doing or think we can do.
Values issues, governance issues, fiduciary issues, not to mention problem-solving and process-solving issues will always exist. But the discussion on divestment must start from a climate of willingness and openness. Swarthmore has accomplished much on its campus to show how a small liberal arts college can begin to change the world. Now, the College in its entirety must exercise thoughtful leadership in addressing the world-wide, existential threat posed by climate change.
The following recommendations represent the sense of the panel and attendees:
- Create a robust ongoing dialog between students and the Board to ensure that points of view are shared in a timely and full manner to strengthen communication between students, faculty, administration and the Board.
- Rethink if revenue maximization alone is too restrictive a goal. Revisit the 1991 Investment Policy in light of who we are as an institution with a Quaker legacy and examine investments that may not represent our mission.
- Assess whether the Board of Managers is fulfilling its fiduciary responsibility, especially with regard to its knowledge and oversight of the College’s Investments.
- Look at colleges and institutions that have divested either wholly or partially, assess what benefits or harms have occurred, and make these findings available to students, faculty and alumni.
- Evaluate the returns on the Fossil Fuel Free Endowment Fund compared to other funds in the College’s portfolio.
- Create a connection with students, faculty, administration, and alumni to update them periodically on progress made on divestment issues.
[1] Swarthmore is a member of AASHE, the Association for the Advancement of Sustainability in Higher Education and the STARS program, which is a transparent, self-reporting framework for colleges and universities to measure their sustainability performance. stars.aashe.org/institutions/Swarthmore-college-pa/2017-4-19.
[2] This is not a specific fund but a directed placement of donations in a fund or funds that do not invest in companies that do business in fossil fuels that is managed by the College’s investment partners.
