Editor’s note: This piece is part of a series about the ban on divestment at Swarthmore. To read the first part, click here.
Swarthmore College has a policy banning the consideration of ethics in the management of the endowment. Swarthmore uses it to dismiss student-led divestment campaigns around the prison-industrial complex, companies involved in the Israeli occupation, the fossil fuel industry, and other unethical industries.
This policy is antithetical to Swarthmore’s recently updated mission statement, which commits the college to “peace, equity, and social responsibility, rooted in our founding as a co-educational Quaker institution.” No significant subset of the Swarthmore community supports a total ban on ethical divestment — not the students, faculty, staff, or alumni. Yet, the 34 people sitting on the Board of Managers, the highest governing body at the college, have refused to heed their calls.
In my previous piece, “Clandestine Ban, Repressive Ban,” I detailed the ways in which Swarthmore has shrouded its investment policy in secrecy and created a culture of fear, intimidating students, faculty, and staff out of challenging this policy.
In this piece, I will try to answer this question: how does Swarthmore justify the ban? Swarthmore has offered a number of shifting, and shifty, explanations for and justifications of the ban on divestment. It has claimed that divestment would endanger the performance of the endowment. It has also claimed that the endowment should only support education, not the “social” objectives of divestment. It has even claimed that divestment from fossil fuels is unnecessary because fracking is a solution to the climate crisis.
However, it has also argued that it can make “exceptions” to the ban for especially important issues. Once, an administrator suggested that the “ban” didn’t actually ban divestment at all, nor did it empower the Board to overrule the Swarthmore community on issues of divestment. And for most of the college’s history, not only did such a ban not exist but also the college had an explicit policy of ethical non-investment in industries like weapons and tobacco.
Student activists have spent over a decade methodically debunking the divestment myths propagated by the college (see this Mountain Justice webpage, this SGO forum, and this Sunrise Q&A for examples). I will continue to challenge these myths. I will also argue that college’s inability to get its story straight on ethical investment should itself call the credibility of the ban into question. A close examination of Swarthmore’s divestment arguments reveals that they are not only baseless, they are contradictory, confusing, and downright duplicitous.
“Investment decisions can be made according to ‘ethical considerations’”
Swarthmore was founded by people who believed that ethics should influence spending decisions. One of its founders, the Quaker abolitionist and suffragette Lucrettia Mott, advocated the boycott of products made using slave labor. These values guided the college’s investments for decades. According to The Phoenix: “Originally, the college’s investments focused on Quaker-friendly activities.” Swarthmore had a “policy of non-investment in tobacco, alcohol and defense.”
This started to change in the 1970s. The Phoenix article continues, “as stock investment replaced bonds as the major component of the endowment and companies diversified to multiple industries, the college no longer followed this Quaker directive.” Soon after Swarthmore’s investments began to stray from its Quaker roots, students began challenging the ethics of those investments.
Starting in the late 1970s, students began organizing to force Swarthmore to join the growing international movement to divest from apartheid South Africa. The college took far too long to fully divest, only agreeing to do so in 1989. Yet, even as the college intransigently opposed apartheid divestment, its leadership still believed that ethics had a role to play in the management of the endowment. During a 1985 meeting, for example, the Board’s Ethics and Investment Committee, although “divided upon the issue of divestment or how Swarthmore should divest from South Africa,” was reportedly in agreement “that investment decisions can be made according to ‘ethical considerations [italics added].’”
In 1991, the Board amended its investment policy, adding this line: “As a matter of policy, the Investment Committee manages the endowment to yield the best long term financial results, rather than to pursue other social objectives.” Divestment advocates now refer to this one sentence statement as the ban, seeing how Swarthmore has used it to shut down calls for divestment on issues not all that different from South African apartheid.
The ban is “simply a process statement”
As I noted in my previous piece, the Board did not notify the Swarthmore community when it adopted the ban in 1991. The first public mention of the ban, according to my research, came in 1997. That year, Conscious Consumers, a student group, stumbled across the ban and questioned if it affected the college’s ability to consider ethics in the management of its endowment. A Phoenix article recorded the response of one administrator: “[Treasurer] Suzanne Welsh asserts that although the guideline exists, it does not preclude social objectives from being pursued in addition to financial objectives. However, the evaluation of these objectives would have to be a decision made by the entire community, not by the Investment Committee alone. ‘The guideline was created because it is not the Investment Committee’s job to make the decision of which social objective to pursue. This is simply a process statement,’ said Welsh.”
Welsh’s comment completely undermines the way that the Board uses the ban today. According to her, the “ban” simply serves as a “process statement” by clarifying the responsibilities of the Investment Committee. When the policy says, “the Investment Committee manages the endowment to yield the best long term financial results, rather than to pursue other social objectives,” it only refers to the investment committee. The policy does not mean that the Investment Committee or the Board gets to overrule the rest of the Swarthmore community when the community wants divestment, as it so clearly does.
Strangely, Swarthmore never again explained the investment policy like this. Going forward, its explanations, even those made by Welsh herself, directly contradicted this interpretation. Welsh did not respond to requests for clarification. Greg Brown, vice president for finance and administration and treasurer, said, “The comments were made 24 years ago, so I’m not in a position to interpret either the context of them or their bearing on current investment policy and procedure,” and then repeated the college’s current stance on ethical divestment.
“The Endowment must be policy neutral”
In 1999, Swarthmore created the joint student and Board-run Committee on Socially Responsible Investing, which used shareholder activism to pursue ethical investment. Two years later, the Board began using the ban to block divestment initiatives. In 2001, several students demanded that the college divest from arms manufacturers, arguing that shareholder activism was insufficient because “we cannot hope to influence, as stockholders, the very products that define a corporation.” In response, the CSRI told them, “the purpose of the Endowment is to generate the maximum rate of return within risk parameters … The Endowment must be policy neutral; it must not be considered an instrument of social change.”
Really? Maximizing returns should be the sole purpose of Swarthmore’s endowment? Swarthmore’s founders didn’t think so. Neither did the people who stewarded the endowment until the 90s. Even Board members who staunchly opposed divestment from South Africa agreed that ethics could factor into investment decisions. When the Board makes statements like this, it makes you wonder what kind of institution it thinks it is running. As one pro-divestment alum told me, “A corporate board’s primary responsibilities are financial. A cultural institution’s board is entrusted with preserving the institution’s culture and historical place in society.”
Furthermore, the Board’s insistence that the endowment “must be policy neutral” is quite revealing. As Archbishop Desmond Tutu once said, “If you are neutral in situations of injustice, you have chosen the side of the oppressor. If an elephant has its foot on the tail of a mouse, and you say that you are neutral, the mouse will not appreciate your neutrality.” The endowment will always be “an instrument of social change.” As long as the ban remains, it will simply be an instrument of the prison-industrial complex, of the Israeli Defense Force, of arms manufacturers, and of fossil fuel companies.
The ban is “a result of losses from the divestment movement”
By 2004, the CSRI was hailing its strategy of shareholder activism as a success. The Phoenix reported that companies like Lockheed Martin, an arms manufacturer, had added sexual orientation to its non-discrimination policies following shareholder resolutions sponsored by Swarthmore. Of course, a merchant of death with more equitable internal policies is still a merchant of death.
The CSRI’s achievements gave Swarthmore the opportunity to explain its rationale for instituting the ban. According to The Phoenix, Swarthmore claimed that it “chose to become part” of the movement to divest from apartheid South Africa “because it was an international movement of an unprecedented scale. ‘We thought it had a higher chance of success,’ [Treasurer] Welsh said.”
The article continues, “The Board of Managers decided to offset financial losses caused by the investment decision, and current fiscal year budgets were reduced. This followed the reasoning that it was unfair to deprive future generations of financial resources for a choice they did not make.” Those costs proved higher than the College’s original estimate and, “as a result of losses from the divestment movement, the investment committee and Board of Managers decided that divestment should not be actively pursued in the future.”
The notion that Swarthmore “chose” to divest from apartheid is revisionist history. In 1986, the Board agreed to fully divest only after a fierce student campaign which lasted more than five years. Student activists held sit-ins at the President’s Office and in Board meetings and staged die-ins outside of Board meetings. According to Hans Oberdeik, a faculty representative present at several Board meetings on divestment, the Board only reached consensus to divest after its two Black members threatened to resign. Even after the Board reached consensus, its chair, Eugene Lang, said he believed “divestment is wrong.” Then, Swarthmore put off actually divesting for three more years, finally beginning the process only after further student activism. Swarthmore did not want to divest from apartheid South Africa. In claiming that it did, it took credit for the hard work of countless students who actually believed in the divestment movement’s potential to succeed. And if Swarthmore did decide to divest on its own volition, its decision to ban all future divestment just two years later is more baffling and morally dubious.
Let’s now examine Swarthmore’s rationale for implementing the ban. First, the Board bemoaned the “financial losses” the endowment suffered as a result of divestment. Why? Every expense the college makes, be it faculty salaries or the construction of a new building, is a budgetary “loss.” The labeling of “losses” is a deceptive tactic meant to convince you that divestment is categorically different than any other institutional commitment Swarthmore makes. It is not. This labeling is also a profound shift in the college’s mindset towards ethical investment. Generations of Swarthmore leadership practiced ethical investment, viewing it not as a “loss” but as an important application of the college’s Quaker values.
Second, the college had anticipated such “losses” as early as 1986. If it was so averse to any loss, why did it wait until 1991 to implement the ban? The Board claimed that the costs were higher than expected, but were they so much higher to justify ending Swarthmore’s commitment to ethical investment, a commitment it had maintained since its founding?
In fact, contrary to these apocalyptic claims, the endowment actually gained money during the period of divestment. Andy Perrin ’93 wrote in The Phoenix, “according to college treasurer Sue Welsh, nearly $2 million ($1,970,000 to be exact) was reserved from the budget over the seven years of divestment to defray the costs of divestment. As it turned out, though, the college has missed only about $917,000 in potential returns as a result of the move. The endowment has, therefore, been overpaid $1,053,000 by the last seven years’ student body.”
Third, the Board claims that it shifted the costs of divestment from the endowment to the budget so as to not unfairly “deprive future generations of financial resources for a choice they did not make.” But, as Perrin argues, this decision “represented the College’s unwillingness, even after such a protracted community-wide debate, to acknowledge an institutional commitment to the decision the community had made. It embodied the claim that the divestment movement was nothing more than a ‘passion of the time’ and should not be allowed to touch the College’s financial soul, its endowment.”
“Swarthmore desperately needs to remember that there was a time and a political climate when it was willing to take principled stands as an institution. It needs that million dollars as a constant and living reminder of its distrust toward the project of divestment and its pessimism toward South African freedom,” Perrin wrote.
Divestment would “detract from our primary mission”
In 2009, several alumni started a campaign to divest Swarthmore from companies involved in Israeli apartheid. According to a Phoenix article on the campaign, this included “U.S. companies that do business in Israel, companies that manufacture military equipment used by Israel, and Israeli companies themselves.”
In that Phoenix article, Treasurer Welsh commented on the college’s policy on divestment. Welsh said, “‘the college’s primary mission is to educate the students and that’s what our endowment should be used for primarily … Adopting a policy that would restrict investments for a different social purpose might detract from our primary mission.’ That said, ‘from time to time issues come along that are so compelling that exceptions have been made.’ The best example here is Swarthmore’s 1986 decision to divest from South Africa in order to oppose apartheid …”
The claim that divestment “detracts” from the college’s mission of education is a strawman. No student in favor of divestment would argue that the primary mission of a college is something other than education. As students at this college, we have the greatest stake in ensuring the quality of our education. We object, however, to the attempt by Swarthmore administrators to pit our education against our morals. We simply believe that an education without morals is no education at all. Furthermore, we don’t even have to choose between the two. As I will demonstrate in a bit, Swarthmore can pursue ethical investment without having to sacrifice funds.
Welsh’s comment that “exceptions” to the ban have been made “from time to time” for “compelling” issues also merits attention. It refers to divestment from apartheid South Africa and is more historical revisionism. First, it suggests that Swarthmore divested from apartheid because it found the issue so compelling. As I explained earlier, the college was indeed so moved by apartheid that it … rejected calls to fully divest for a decade. Second, Welsh also implied that, in deciding to divest from apartheid, Swarthmore made an exception to a longstanding policy against divestment. She omitted the important context that the college instituted the policy after apartheid divestment. She also failed to mention that, for the vast majority of Swarthmore’s history, not only did such a policy not exist, but also the college had an explicit policy of non-investment in certain industries on ethical grounds.
Welsh’s comment also raises an important question, one which I encourage you to ask the next administrator or Board member with whom you come into contact. Since Swarthmore implemented the ban on divestment as a result of the “losses” incurred by apartheid divestment, does the college regret that decision? Were apartheid South Africa to exist today, would the college make an “exception” to its policy against divestment? What about other present-day apartheid states, such as Israel?
Divestment would put “performance at risk”
In 2010, the student group Mountain Justice started a fossil fuel divestment campaign. That campaign has now lasted more than a decade and, although MJ no longer exists, lives on in groups like Sunrise Swarthmore and Ban the Ban. Swarthmore responded to this campaign by trotting out a number of arguments that are, to say the least, questionable. The college maintains many of these positions to this day.
1. Swarthmore has claimed that divestment will imperil the endowment’s performance, forcing painful budget cuts to financial aid and other programs:
In a 2013 “Open Letter on Divestment,” the Board wrote that divestment “is likely to have a negative effect on our investment returns, thus impacting our ability to support financial aid, faculty, curriculum, and student programs. By our calculation, divestment could risk a loss of approximately $10-15 million a year in endowment income.”
The Board pegged the costs of divestment so high because, as it claimed in a 2015 open letter, “It would be difficult, if not impossible, to replace our current investment managers with ones of similar quality, if we were only to invest in funds that were fossil fuel free. By having access to the best investment managers, the college has achieved excellent returns in a shifting landscape. If we were not able to work with these investment managers, it would cost the college between $10 and $20 million annually based on the past performance of our current managers.”
Divesting from fossil fuels would not force the college to find new money managers, and the Board should know that. In 2014, a year before the Board made that claim, the college’s highest-paid investment manager, Cambridge Associates, announced that it would offer fossil-free portfolios. According to a report by the firm from this February, 40 colleges and universities have already used them to pursue sustainable and impact investing. That is exactly the kind of ethical investing Swarthmore claims its managers cannot handle. As MJ member Christopher Malafronti ’18 put it, Cambridge Associates’ offer “means that a plan for divestment is now just a phone call away.”
Not only have Swarthmore’s own investment managers developed financially responsible divestment strategies, its faculty has, too. In 2015, seven Swarthmore faculty (including current Provost and Dean of the Faculty Sarah Willie-LeBreton) released a white paper proposing a moderate, partial fossil fuel divestment option, which “would not require upsetting the arrangements we have with managers of our commingled funds and … would affect roughly 0.3 percent of the endowment.”
The Board has also claimed that divestment from any industry, not just fossil fuels, could hurt the endowment. In a 2018 open letter, it stated, “Any policy change that shifts the focus from attaining the best long term financial results would then require fundamental changes in both the asset allocation and the investment managers who serve the College, and would place that performance at risk.”
The empirical evidence is that divestment does not wreak havoc on college budgets. Dozens of universities have already divested from fossil fuels or implemented ethical investment practices into the management of their endowments. Cambridge divested last October. Rutgers divested earlier this month. Study after study has found that the endowments of these schools have performed no worse and, in some cases, better than before.
Swarthmore’s contention that divestment would endanger “our ability to support financial aid, faculty, curriculum, and student programs” is another attempt to make members of the community pick between education and ethics. It’s divisive and manipulative. It pits members of the community against each other and obscures the fact that the Board is ultimately culpable for making such cuts. Divestment activists have repeatedly stressed this point.
“For an institution that holds financial aid as such a high priority, reducing financial aid should be the last measure taken any time the college loses money for any reason. Due to the uncertainty of the market, the rate of return on the endowment has sometimes fluctuated widely from year to year. A decrease in returns has happened in the past, and the college has been able to manage its money without hurting financial aid. There is no reason why we shouldn’t expect the same for divestment unless the Board makes an active decision to cut financial aid, in which case they would hold the responsibility for that outcome,” Mountain Justice wrote in a 2013 document.
“We reject the idea that divesting will impact the College’s ability to distribute financial aid, which administrators often claim. If Swarthmore College is truly committed to ensuring consistent financial aid for students, it must demystify the connection between divestment and financial aid allocation of the endowment,” Ban the Ban argued in its 2019 statement.
The college’s austere framing of divestment echoes fossil fuel industry tactics. Fossil fuel companies are behind narratives that pit workers and climate activists against each other, such as the false notion that climate change policy is “too expensive.”
2. Swarthmore has argued that fossil fuel divestment is an ineffective means of combating the climate crisis and that its own climate initiatives are more effective:
“If we thought divestment would change the behavior of fossil fuel companies, or galvanize public officials to do something about climate change, or reduce America’s reliance on fossil fuels, this would be a much tougher decision. We believe we have other, more effective means to achieve this objective,” the Board wrote in its 2013 open letter.
The letter continued, “Divestment’s potential success as a moral response is limited — if not completely negated — so long as its advocates continue to turn on the lights, drive cars, and purchase manufactured goods, for it is these activities that constitute the true drivers of fossil fuel companies’ economic viability — their profits. It is important that we ourselves acknowledge that our consumption of energy makes us complicit in the threat to the planet and that it is in our hands to reduce our demand for it.”
Fossil fuel divestment’s success is not negated by consumer demand. Divestment actually has the power to alter consumer demand and “galvanize public officials to do something about climate change” by turning fossil fuel companies into pariahs. A 2013 Oxford University report explains, “As with individuals, a stigma can produce negative consequences for an organisation. For example, firms heavily criticised in the media suffer from a bad image that scares away suppliers, subcontractors, potential employees, and customers. Governments and politicians prefer to engage with ‘clean’ firms to prevent adverse spill-overs that could taint their reputation
or jeopardise their re-election. Shareholders can demand changes in management or the composition of the board of directors of stigmatised companies. Stigmatised firms may be barred from competing for public tenders, acquiring licences or property rights for business expansion, or be weakened in negotiations with suppliers. Negative consequences of stigma also include cancellation of multibillion-dollar contracts or mergers/ acquisitions. Stigma attached to merely one small area of a large company may threaten sales across the board.”
This is exactly what has happened. Climate activist Bill McKibben noted in 2019, “Peabody, the world’s biggest coal company, announced plans for bankruptcy in 2016; on the list of reasons for its problems, it counted the divestment movement, which was making it hard to raise capital. Indeed, just a few weeks ago analysts at that radical collective Goldman Sachs said the ‘divestment movement has been a key driver of the coal sector’s 60% de-rating over the past five years.’ Now the contagion seems to be spreading to the oil and gas sector, where Shell announced earlier this year that divestment should be considered a ‘material risk’ to its business.”
As the Oxford report concluded, “The outcome of the stigmatisation process, which the fossil fuel divestment campaign has now triggered, poses the most far-reaching threat to fossil fuel companies and the vast energy value chain.” Divestment, by itself, won’t solve the climate crisis. However, it is a critical tool, unlike the college’s “more effective means.”
Take Swarthmore’s “Energy Master Plan,” which commits the college to carbon neutrality by 2035 and is one of its flagship climate initiatives. The plan, approved by the Board this February, will cost $69 million. But the Board did not express concerns that this costly initiative could harm financial aid. To the Board, that high price tag represents not a financial loss but “an expression of the College’s values and that will result in tangible, measurable results in our community’s efforts to address the global climate crisis,” as it stated in an open letter from earlier this month.
Making Swarthmore carbon neutral does little to combat the global climate crisis. As the 2015 faculty white paper pointed out, “Even if the College becomes carbon-neutral by 2025 (an aspirational goal we wholeheartedly support), as a carbon-neutral island in a rapidly warming world, we will still suffer extreme weather events, strained governmental resources, and loss of some environmental services. Only by supporting global action toward reduced emissions can we protect the College from some of these negative future impacts.”
Swarthmore could and should both pursue carbon neutrality and fossil fuel divestment. But the suggestion that the former is more effective than the latter in combating the climate crisis, and thus not a reason to do the latter at all, is silly. Not to mention, Swarthmore’s Mountain Justice is where the global fossil fuel divestment movement started. How’s that for effectiveness?
The college’s insistence that divestment is unnecessary because of campus greening initiatives like carbon neutrality is a form of greenwashing. As WIRED explains, this term “applies to companies that issue inflated environmental claims to help hide a track-record of questionable behaviour.” There are many Swarthmore students, faculty, and staff working hard on environmental, ecological, and climate issues. But the college has done a disservice to their work by investing in ecocidal companies and then claiming that work done by students, faculty, and staff absolves the college of its responsibility to stop those investments.
Swarthmore’s contention that divestment’s effectiveness is “limited — if not completely negated” by the individual choices of consumers to buy fossil fuels again parrots the fossil fuel industry line.
Climate scholar Genevieve Guenther writes, “The we responsible for climate change is a fictional construct, one that’s distorting and dangerous. By hiding who’s really responsible for our current, terrifying predicament, we provides political cover for the people who are happy to let hundreds of millions of other people die for their own profit and pleasure.”
In fact, according to Mashable, the idea that individuals can best fight the climate crisis by reducing their “carbon footprint” was literally created by British Petroleum to sow confusion and prevent action that could endanger its profits.
3. Swarthmore has also claimed that fracking is a preferable solution to the climate crisis than fossil fuel divestment
In a 2013 piece in the student publication Swarthmore Overlaps, MJ members recalled how the Board responded to fossil fuel divestment during a 2012 meeting: “We presented an extensively researched proposal to the Board, only to be told that hydraulic fracturing is a solution to the climate crisis.”
This claim is so absurd that it would be laughable if it wasn’t also a line straight out of the fossil fuel industry playbook. As a 2019 Guardian article reports, “America’s oil companies are trying to rebrand themselves as part of the solution to the climate crisis … They say natural gas – a fossil fuel that emits heat-trapping carbon dioxide – is helping to slow climate disruption by providing an alternative to coal.”
Swarthmore administrators and Board Members need to do some serious self-reflection and consider why, when responding to calls for fossil fuel divestment, they have sounded more like fossil fuel lobbyists than educators.
4. Swarthmore has ominously warned that ending the ban will lead to a cascade of costly divestment initiatives.
“In 1991 the Board adopted the policy of not using our endowment to take positions on social issues, believing that it could lead to a continuing stream of other divestment initiatives that in the aggregate could significantly harm the College’s long-term financial standing,” the Board claimed in its 2015 open letter.
Remember, an endowment always takes a position on social issues. Also remember, financial losses are a dubious motivator for the 1991 ban and empirical evidence has shown that the finances of college endowments which pursue ethical investment fare no worse than before.
Swarthmore’s cynical fear of “a continuing stream of other divestment initiatives” is both a slippery slope fallacy and a strawman. Divestment activists don’t actually want the college to cease all investments in any company that could be unethical. Groups like Ban the Ban have recognized that because “there is no such thing as ethical investment under capitalism,” Swarthmore could never divest its way into a truly ethical endowment.
As Ban the Ban explained in its statement, ending the ban on divestment is not just about securing any particular divestment initiative. “It is also about lifting the limitations that prevent us from critically engaging with the ethics of having a mass of wealth, what it means to divest from things that harm all of us and instead, actually transforming the broader community through investment in socially conscious projects.”
Divestment activists have come up with practical ideas that could enable the Swarthmore community to critically engage in the college’s investment decisions. One example is Ban the Ban’s proposed Ethical Investment Committee, which “would allow students to affect the college’s future investments by being part of the decision-making process alongside Board members. This is a crucial piece to ensuring that financial decisions primarily concerning the money of students, alums, and parents are made with direct student feedback. We need a system of financial accountability – especially for a school that prides itself on social and moral responsibility.”
5. Swarthmore has claimed that its donors support and have always supported an investment policy which maximizes financial returns to the exclusion of ethical considerations.
In its 2015 open letter, the Board began its justification “not to modify its investment guidelines to allow for use of the endowment to meet social objectives” by stating, “We believe that the donors to Swarthmore College over the last 150 years have assigned to the Board the obligation to steward our endowment carefully in order to fulfill our mission to educate students.” Here, the Board yet again attempted to pit morals against education. It also deceptively implied that Swarthmore’s donors have not and do not support divestment.
Remember, the ban fundamentally altered the college’s investment policy. From its founding in 1864 until the 1970s, 100 out of “the last 150 years” in Swarthmore’s existence, the college had a policy of non-investment in multiple industries. And until the ban’s implementation 30 years ago, the Board maintained that investment decisions could be made according to ethical considerations. For the vast majority of the college’s history, donors “assigned to the Board the obligation” both to “steward our endowment carefully” and to invest it ethically. Whether justified or not, the ban is actually out of line with the wishes of most donors throughout the college’s history.
Swarthmore also loses current and potential donors right now by clinging to an unpopular policy that violates its core principles. Nearly 1,000 alumni have pledged to withhold donations until the college divests from fossil fuels.
After reading my previous piece on the ban, Jerry Nelson ’65 left a comment with an email he sent to Ed Rowe, President Val Smith’s chief of staff. In it, he wrote, “Thank you [for] letting me know the Board has not changed its position on the divestment issue. The College has received its last million dollars from our family. The Board has failed to preserve the institution entrusted to it, and should be removed.”
Swarthmore has had three decades to make a convincing case for the ban on divestment. It has failed. It has made weak and, at times, contradictory arguments supported by paper thin evidence. It has distorted the college’s history in ways that would make its founders roll in their graves, and it has relied on divisive and duplicitous narratives fit for corporate lobbyists, not Quakers. After 30 years, the Swarthmore community is tired of these excuses. It desires an institution that lives up to its principles and demands an end to the duplicitous ban.
I have been doing some more research into the history of divestment at Swarthmore and keep finding yet more evidence for how baseless the college’s arguments against divestment are.
Here are some highlights:
1. On the argument that divestment will hurt Swarthmore’s finances:
Swarthmore has only ever provided one piece of evidence to support this claim, the estimate that fossil fuel divestment “would cost the college between $10 and $20 million annually.” Swarthmore’s estimate was based on calculations made in 2013 by Board Investment Committee Chair Chris Niemczewski ’74. Niemczewski made these calculations using the methodology of a 2008 study by Timothy Adler and Mark Kritzman.
That study has been lambasted by academics and investment firms that specialize in socially responsible investing. Paul A. Rudd at Vassar College explained that the study used “an untested and highly simplified model calibrated with crude statistics and arbitrary parameter values which yields numbers that deserve skepticism.”
“Swarthmore College’s rationale to not divest has been based upon inaccurate assumptions put forth in the Adler-Kritzman paper,” wrote NorthStar Asset Management in 2013. This is not to mention that, since 2013, numerous colleges and universities have divested from fossil fuels or included ethical investment principles into their endowments without experiencing financial harm. Swarthmore’s only evidence for the financial harms of divestment, is outdated and based on shoddy calculations.
As I detailed in my piece, people who manage Swarthmore’s endowment finances and faculty have repeatedly debunked Swarthmore’s unfounded claims about the financial impacts of divestment. To add a further wrinkle, in February of 2015, Swarthmore sought advice from several leading sustainability experts on ways to make the college more sustainable. One of those experts, Greg Kats, wrote an op-ed in The Phoenix advising the college on “The Financial Advantages of Divestment.” He argued that divestment would improve, not weaken, endowment performance. He even noted, as I did in my piece, that many of Swarthmore’s arguments against divestment “appeared to be funded by the fossil fuel industry.”
Finally, Swarthmore itself has implicitly admitted that fossil-free investments are not a financial risk. In December of 2015, the Board announced that it would create a fossil-free fund within the endowment, which three Board members themselves seeded with $100,000. As Mountain Justice pointed out, “For years, the Board has told us fossil-free investing wasn’t feasible. Now, they’ve proven what the community already knows to be true: it is in fact feasible, and that there is nothing stopping them from divesting our entire endowment and revoking our political support from this rogue industry.”
2. On the claim that fossil fuel divestment is an ineffective means of combating the climate crisis
As I pointed out in my piece, this argument reflects talking points made by the fossil fuel industry. A spokesman for the Independent Petroleum Association of America made that connection explicit when they praised Swarthmore for rejecting fossil fuel divestment in 2015. “Today Swarthmore joined numerous schools across the country like Harvard, Yale and Middlebury in rejecting an anti-fossil fuel political campaign … While activists are clearly good at getting headlines, schools understand that divesting would be all cost for no environmental gain,” the spokesman said.
Commenting on the fossil fuel industry’s backing of Swarthmore, Mountain Justice member Kate Aronoff wrote: “As intransigent board members and administrators continue to pay lip service to ‘greening’ their campuses, they are increasingly finding themselves in the awkward spot of having more common ground with fossil fuel executives and climate deniers than their own students, faculty and alumni.”
Swarthmore has also touted its own environmental programs as alternatives to fossil fuel divestment. Not only are such efforts insufficient without fossil fuel divestment, as I argued in my piece, those efforts are arguably only in place because of pressure from student activists.
For example, Swarthmore instituted an internal carbon charge in 2017. In rejecting a student referendum for partial divestment from fossil fuels that same year, President Valerie Smith offered this program as one example of an alternative. Sustainability Director Aurora Winslade stated that the carbon charge “is not a response to divestment. It is a response to the urgency of climate change.” Late Economics Professor Stephen Golub, who helped to formulate the program, said, however, “the carbon charge was the result of the concern about sustainability and climate change and so on, highlighted by the divestment movement, again with discussions we had within the department, we thought the college should do something.”
It’s a similar story with the just-constructed Singer Hall, which the college has commended for its state-of-the-art sustainability features. Head of the engineering department Carr Everbach has noted that Swarthmore added those features following intense divestment protests. “This process of defining what BEP was going to be continued until the spring of 2013 in which Mountain Justice and other students asked the Board of Managers to divest from all fossil fuel stocks and the Board of Managers refused. There were subsequent protests, and possibly as a related consequence of those concerns, the Board of Managers agreed to allocate an additional $12 million to make it [BEP] as environmentally sustainable as possible,” Everbach said.
Swarthmore has created a cynical cycle where it rejects student divestment campaigns, makes incremental reforms due to the pressure from those campaigns, and then uses those reforms to sell itself while omitting the role that student activism played in achieving these reforms.
The opinions expressed in this article are solely the author’s and do not reflect the views of The Phoenix Editorial Board.