Colleges and universities across the country have committed to divestment from fossil fuels — Reed is considering following in their footsteps
Numerous colleges and universities across the country have committed to divestment from fossil fuels, either partially or completely, including Lewis & Clark, Johns Hopkins, Stanford, the University of California system, and Middlebury College. According to GoFossilFree.org, almost 1,200 institutions globally have committed to divestment, totalling over $14 trillion of investments. Following the recent Reed Union on Feb. 6, questions of the practicality of divestment have come to the forefront as Reed discusses divestment from fossil fuels. As of Wednesday, Feb. 12, the administration and Board of Trustees has not made an official decision about divestment, although President Audrey Bilger and the Board of Trustees approved other changes following the Reed Union.
Before diving into the divestment movement, it is necessary to lay a groundwork for financial comparison between Reed and other institutions. According to the “Reed College Endowment 2019 Report,” the value of Reed’s endowment as of June 30, 2019 was $582 million, and profits from the endowment contributed “approximately 25% of the annual operating budget.” This allows the college to be less dependent on tuition revenue, allowing it to provide need-based financial aid to slightly more than half the student body (55.9% in 2018). Reed’s Investment Responsibility Policy emphasizes the college’s concern with “the defense of academic freedom… [and as such it] has sought to limit the political role of the institution.” The Board of Trustees’s primary responsibility is the financial well-being of the college. That being said, the Investment Responsibility Policy does recognize that non-economic factors may play into investment.
The policy states, “In acting on non-economic questions the college recognizes that its traditions require it to act only where the issue at hand is of a compelling social or moral character and where the action taken reflects widely-held, perhaps almost universally-held social or moral positions. It should refrain from actions where significant divergence of opinion is perceptible among college constituencies or members.”
More recently, Reed has added to the investment committee with the hire of Erik Bernhardt, the college’s first Chief Investment Officer, on Aug. 1, 2019.
Lewis & Clark’s divestment was a significant topic of discussion at Reed Union. According to their website, the Lewis & Clark College Board of Trustees voted unanimously to divest from all fossil fuel holdings in their endowment in 2018. Students began to push for divestment in 2012. As of 2019, Lewis & Clark’s endowment was valued at $238 million. The Quest could not discover what percentage of Lewis & Clark’s operating budget was coming from their endowment, but at Reed Union, it was suggested that it was around 8 to 10 percent. This would suggest that Lewis & Clark is more reliant on tuition revenue than Reed, which formed one of the economic arguments as for why Lewis & Clark’s model is not immediately applicable for Reed. Lewis & Clark did not seem to be committed to political neutrality, but makes sustainability a significant part of their mission. Lewis & Clark has stated it “shall not directly own any securities publicly issued by companies in the fossil fuel industry,” but will make sure to divest from fossil fuels companies held indirectly through “public commingled strategies” before Dec. 31, 2022. It did immediately commit to “make no investments in any new fund which has exposure to fossil fuel companies.”
Other colleges and universities that have committed to divesting include the University of California system (in September 2019), Middlebury (in January 2019; the Board of Trustees voted to divest all direct holdings, phasing them out over a period of 15 years), and The New School (in February 2015). According to Inside Higher Ed, at Middlebury a spring 2018 referendum showed that 80 percent of students and 98 percent of faculty were in favor of divestment.
Other institutions have partially divested, such as Stanford and Johns Hopkins. Stanford is one of the most high profile partial divestments. According to the New York Times, in 2014, Stanford committed to divest its endowment of “stock in coal-mining companies.” Students, faculty and alumni continued to push for full divestment; for example, in 2015, 457 faculty members signed a letter to the Board of Trustees calling for divestment from all fossil fuels. In 2016, however, the board released a letter stating they will not divest from the fossil fuels, in part because their Advisory Panel on Investment Responsibility and Licensing “could not evaluate whether the social injury caused by the fossil fuel industry outweighs the social benefit it provides.” Another concern was the lack of “competitive and readily available alternatives.” This is, likewise, a common concern expressed by those reticent to divest at Reed.
Harvard is, perhaps, the most high profile school currently discussing divestment. Students began discussing divestment in 2012, and in 2013, the University President, Drew Gilpin Faust, released a statement that the university would not divest from fossil fuels. Harvard’s divestment is an on-going saga, which requires more in-depth examination. Most recently, however, on Feb. 4, the Harvard faculty voted 179–20 in favor of divestment, according to The Washington Post. This development is unlikely to directly lead to divestment, but does put added pressure on the administration.
In recent updates to Reed divestment, on Wednesday, Feb. 12, the Office of the President released a statement regarding Reed Union and the Board of Trustees meeting. According to the announcement, “[the] Reed Union inspired further discussion at the board meeting,” resulting in the pledge to create a sustainability coordinator staff position and add more bike parking solutions in order to “encourage biking to and from campus.”
The question of divestment will continue to be discussed.