Is Divestment Worth It?
This past fall, Perri Haser ’17 sat in Reed Hall, room 103, listening to philosophy professor James Binkoski. The class, “Environmental Ethics,” solidified Haser’s commitment to environmentalism and helped inspire her to become more involved with the Divest Dartmouth campaign.
This term, Haser has taken the lead in some aspects of Divest Dartmouth’s operations, as usual leaders Noah Cramer ’16 and Leehi Yona ’16 are off-campus.
In September, College President Phil Hanlon asked the Advisory Committee on Investor Responsibility to prepare a report that details the implications of withdrawing the College’s investments in publicly-traded fossil fuel companies.
Haser says Divest Dartmouth is urging the College to terminate its investments in order to send a message and deal an economic blow to firms involved with fossil fuels. About 200 firms — the publicly traded firms with the largest fossil fuel reserves — are on the Divest Dartmouth’s list, but the organization does not seek to divest from all companies involved with fossil fuels.
“The point of divestment isn’t to try to shut down the company. It’s to make a moral statement,” Haser said. “Fossil fuel companies are dinosaurs, and they’re really bad for the environment, and they’re destroying the future of students here.”
It seems that with the emphasis on sustainability and outdoor activity that permeates much of Dartmouth’s campus, from emphasizing waste reduction on First-Year Trips to promoting recycling and composting in dining facilities, the College would be a natural choice to lead the way for divestment across the nation. Money, however, doesn’t appear from thin air, and every dollar decrease in the endowment could ripple down to affect student life or the College’s academic excellence. Is making a moral statement worth a possible decrease in financial aid or funding for residential life, especially when the impact of an individual institution’s divestment on the fossil fuel industry as a whole could be negligible?
It’s time to move beyond jargon and scrutinize the benefits and costs of divestment.
The ACIR executive administrator Allegra Lubrano, who is overseeing the report, echoed Haser’s sentiments. She said that divestment could make Dartmouth appear to be taking the high ground on an important issue.
While there’s a number of causes that student groups rally behind, from groups like the Women of Color Collective to organizations like J Street U, Divest Dartmouth seems to be gathering momentum among the student body. With orange signs plastered on the doors of a several campus buildings, the group is ensuring that their message reaches students. One cause for its popularity could be that its environmental angle is fairly non-controversial in its most basic sense. It’s not hard to besmirch an oil company.
Divestment, however, wouldn’t come without the possibility of serious drawbacks. Lubrano and Haser, among others, said that it is entirely possible that divesting could hurt the College’s endowment.
A May 22, 2013 column in The Dartmouth by Kevin Francfort ’15, “The Cost of Divestment,” argues that divestment will cost the endowment $200 million during a 10-year timespan. That means the College would lose about $10,000 per student per year, according to the column.
Francfort, a former staff columnist, declined to comment.
Lubrano says she admires the hard work and dedication of the students who make up Divest Dartmouth. She noted that they are fighting for a not-always-popular cause.
“They are not struck by the inertia that strikes so many of us,” Lubrano said.
Interestingly enough, Haser used the same word — inertia: a tendency to do nothing or remain unchanged — to describe the College’s current investment situation. Haser, for her part, claimed that the College is allowing inertia, rather than the time-sensitive needs of the warming planet, to dictate its action.
Brian Chen ’17, College Republicans executive board member, declined to comment on the possibility of divestment.
Morgan Curtis ’14 has been involved in the campaign for divestment since spring 2013 and has remained very active in campaigning for divestment after graduating. She currently orchestrates alumni relations for Divest Dartmouth, encouraging alumni to write to the school and fostering an increasing number of alumni connections.
Divesting, Curtis said, would allow Dartmouth to “once again be on the right side of history and be at the forefront of the divestment movement.”
The current issue of the Dartmouth Alumni Magazine features novelist Louise Erdrich ’76 speaking out in favor of divestment, with the headline “Earth Mother.”
“Why should Dartmouth divest from fossil fuels? Because when you are educating students to have a better future, you should do all possible to ensure they have a future,” Erdrich is quoted as saying in the magazine.
Curtis said she has often heard the argument that Dartmouth can make the biggest impact on oil companies by remaining invested and being an active shareholder, but she said there is a long history of shareholder activism making no impact.
Additionally, Haser speculated that opponents could claim that the purpose of an endowment is not to make statements, but rather to fund research at the College.
Activists are quick to note, however, the precedent that would seem to refute this claim.
“Dartmouth divested from Apartheid in the 1980s, so it’s not like we haven’t used our endowment to make moral statements before,” Haser said.
By the end of 1989, Dartmouth announced it would terminate investments in companies conducting business in South Africa. According to an article in the New York Times published in November of that year, the board made that decision because the investments had “great symbolic meaning” and that they interfered with Dartmouth’s educational aims.
While divestment may be a popular position for students, most do not have all of the background information at their disposal. In an ideal world, the College could be morally pure while cultivating the endowment through profitable investments, but it is unclear whether those two outcomes could coexist.
Still, Haser reiterated that economic analysis is not the driving force behind divestment.
“It’s just sort of logic. Everyone talks about how they want to save the environment,” she said. “It’s not logical to invest in fossil fuels if you don’t want to destroy the environment. It’s logically incoherent.”
While economics may not be at the root of the campaign, divestment advocates are taking action to hit colleges financially as well.
Organizers from Dartmouth, including Curtis, as well as those from Boston College, Stanford University, the Massachusetts Institute of Technology and other universities in the Northeast, are working together to create the Multi-School Fossil Free Divestment Fund. The fund allows students, alumni, parents and faculty to make tax-deductible donations to what Curtis calls a sort of “alternative endowment” in order to show support for divestment. The money in the fund will be distributed to schools only after they completely divest from fossil fuels.
Curtis said that while Dartmouth is taking very similar actions as its peers in the Ivy League, the College’s crunchy culture suggests that it could propel environmentalism from merely a campus matter to a national concern.
Divest Harvard and Fossil Free Yale are currently fighting for very similar results on their respective campuses. Harvard and Yale Universities possess the two largest endowments of any institutions in the nation, each worth more than $20 billion. Both groups have received definite “no’s” from their corresponding administrations.
Harvard’s divestment campaign received a boost in 2012, when 72 percent of students voted in favor of divestment in a referendum. In the fall of 2013, President of the University Drew Faust released an open letter affirming her deep-seated opposition to divestment. Then, in the spring of 2014, students blockaded the President’s office for a day and a half, ceasing only when one student was arrested.
Harvard sophomore Talia Rothstein, a member of Divest Harvard’s board of directors, said that it is especially important for well-regarded institutions like Dartmouth and Harvard to be leaders in this movement.
“The opportunity for universities whose names bear a lot of moral and intellectual weight is really powerful,” Rothstein said. “The University’s name can create some actual tangible good.”
Fossil Free Yale project manager Mitchell Barrows says they’ve needed to reevaluate their campaign efforts after receiving the “no” from the administration this past August. Barrows said he believes that alumni need to call in to make a bigger impact, as money is the most effective form of communication.
“We need to start speaking the language of the Yale corporation,” he said. “It’s called the Yale corporation for a reason.”
Haser says divestment would hopefully lead to a more environmentally conscious student body, and ideally the College would reinvest the money in renewable energy.
According to a 2014 report from Bloomberg New Energy Finance, clean energy will attract as much as $5 trillion in new investment between now and 2030. However, the report also spells out divestment as a far-from-painless process. It states that while divestment from coal would be easy due to the relatively small size of the companies, divestment from oil and gas will be more difficult and drawn-out.
Despite the difficulties, more than 400 organizations in the U.S., including colleges, cities and churches, have joined campaigns promoting fossil fuel divestment.
“We’re not at the time when we have the luxury of being able to make choices that are convenient,” Haser said. “I don’t know if [divestment] will succeed. But I know that the movement will keep going no matter what.”