Divestment Is Neutrality

Introduction

One month ago, I emailed Audrey Bilger regarding a communication the Reed community received on December 20 on the Reed College Board of Trustees Investment Committee’s December 12 decision not to divest from Israel and defense companies involved with Israel. In my email, I claimed the December 20 email construed the Investment Committee as unable to divest due to Reed College policy via the use of false claims and the absence of important contextual information. I further made the argument that divestment from Israel and involved defense companies was not only possible under college policy, but a moral requirement due to the rationale for Reed’s previous divestment from the fossil fuel industry. I have not received a response from Audrey Bilger. Below is the full email which I sent on January 14.

[Editors’ Note: We made minor spelling, grammar, and punctuation edits to the below email, but have left its content unchanged.]

Hello Audrey,

Out of respect for your time I will keep this as to the point as possible. I would greatly appreciate that this is passed along to the board, seeing as there is no easy way for me to contact them directly.

1. Reed College investment policy permits divestment from Israel and the defense industry.

According to page 6 of the Reed College Endowment Report from the Fiscal Year of 2023, Reed College is in the process of divesting from fossil fuel.

In October 2021, the Board of Trustees, following extensive community discussions over a number of years, directed the investment committee to take the following actions related to the endowment’s investments in fossil fuels:

• Prohibit any new investments in public funds or private partnerships that are focused on the oil, gas, and coal industries, including infrastructure and field services. This includes 1) acquiring, developing, producing, or exploring for oil, gas, and coal; and 2) providing equipment, services, and infrastructure related to these industries.

• Phase out all such existing investments in private partnerships in accordance with the funds' typical life cycles, or sooner if both prudent and practicable.

The use of fossil fuels is and was highly politicized in America at the time of this decision. The below excerpt from an email memo describes the rationale for the colleges decision to divest despite the political nature of such an action.

While the Board has a fiduciary duty to protect the health and integrity of the endowment, which provides crucial support for college operations, the decision to curtail Reed's endowment investments in fossil fuels is a direct result of years of thoughtful community discussions and demonstrates an expansion of Reed's institutional commitment to sustainability. The Board recognizes the current climate crisis as substantially the result of greenhouse gas accumulation associated with the combustion of fossil fuels. Beyond the college's own actions to reduce its carbon footprint, the Board believes that steady reduction in fossil fuel use now represents an issue of global importance that affects all of humanity, a position that, in alignment with Reed's Investment Responsibility Policy, "reflects widely held, perhaps almost universally held, social, or moral positions.”

The board finds divestment pertaining to politicized issues can be deemed neutral if it is in the widespread interest of humanity. This establishes a precedent that investment is a form of moral or social support when pertaining to widespread social positions or effects. The condemnation of genocide and mass violence against civilians reflects a near universally held moral position similar to the College's previous decision on investment in fossil fuels.

2. Divestment is Neutrality

The Board of Trustees Investment Committee wrote the following in response to a recent student petition to divest from Israel.

The committee notes its fiduciary responsibility under both Oregon law and under the Reed College Investment Responsibility Policy cited above. The committee affirms the principle of institutional neutrality reflected in the investment policy and in the operating principles of the college and finds the students’ petition to be substantially political in nature. (from "Update from the Reed Investment Committee on Proposed Divestment")

This seemingly references anti-BDS laws which recently prevented Ohio State University from divesting from Israel. Along with Ohio, many other states have passed anti-BDS legislation. However, there are no such anti-BDS laws in Oregon which would restrict Reed College from committing to divestment from Israel. Further divestment from Israel and other corporations, as requested by the student petition, is permissible under the college’s investment policy, since there is clear evidence that Israel is committing mass violence against civilians in Palestine. This is supported by previous precedent set in 2021 by the Board of Trustees Investment Committee when divesting from fossil fuels. Therefore, the decision against divestment from Israel and the defense industry supporting Israel represents  support of the violence which Israel is perpetrating against civilians in Palestine, a position which is fundamentally partial.

3. Conclusion

The Reed College Board of Trustees Investment Committee set the precedent that in some situations investment may constitute a form of moral or social support in their 2021 decision to divest from fossil fuels. This precedent compels the college to cease investment in Israel in line with the College's policy on neutrality due to its investments constituting a form of social support for the mass violence Israel is committing against civilians in Palestine.

Thank you for your time,

Lily Larsen