College formally announces plan to divest from fossil fuels
The announcement of decisions made in the last several years comes after years of student activism.
The College’s endowment will no longer be directly invested in fossil fuels and the Dartmouth Investment Office intends to allow its remaining public holdings in the sector to expire, according to an Oct. 8 announcement.
Although this release marks the College’s first formal announcement of its divestment plan, the DIO banned fossil fuel holdings in 2020.
The College’s divestment approach results from two decisions made over a four-year span: a 2017 decision that barred the endowment from making any “new investments in private fossil fuel extraction, exploration and production funds” and a decision in early 2020 “for [the College’s] direct public portfolio to no longer hold investments in fossil fuel companies,” according to the announcement.
Together, these bylaws prohibit any future fossil fuel investments from entering the endowment. The College will allow any holdings that remain to expire once their contract expires, College President Phil Hanlon explained in an exclusive interview.
“As the terms of these partnerships approach their legally-contracted conclusions… the [investment] managers will move through the sale processes of those assets,” Hanlon said.
The move comes after Harvard University announced a similar divestment strategy in September, after the 2021 Intergovernmental Panel on Climate Change report outlined the disastrous effects of continued climate inaction, after the student body presidents of the eight Ivy League schools called on the League to divest in April and after years of activism from Divest Dartmouth.
The College’s energy investment strategy consists of transitioning away from fossil fuels and instead focusing on renewable alternatives. According to the statement, “evidence that correlates the production of fossil fuels with the warming of the atmosphere is convincing and widely accepted.”
In the past few years, Hanlon added, the College has found that the investment in sustainable energy companies provides “great returns” and also allows the College to support new technology developments and “make a huge difference.”
“Our investment team’s analysis indicated that there is a continued growing global shift in demand towards renewable and clean energy,” Hanlon said. “What we’ve noticed is that investments in energy transitions are now comparable or better than the investment opportunities in fossil fuel companies.”
The announcement also highlights other College initiatives, including Dartmouth’s intention to invest “more than $400 million to fund programs, centers and institutes that will in some way advance teaching, research, faculty-student partnership, and interdisciplinary collaboration to address climate change.” According to the announcement, these investments include the construction of the Irving Institute for Energy and Society — which is scheduled to be completed by the end of the year — the Tuck School of Business’s Revers Center for Energy and climate-related research in the John Sloan Dickey Center for International Understanding.
In addition to these investments, the College’s 2017 Earth Day Pledge — a collection of sustainability policies — aims to “[reduce] greenhouse gas emissions, waste, water usage, transportation and food consumption,” according to the announcement.
The pledge commits the College to reevaluating its efforts toward sustainability once every five years. As April 2022 — the first re-evaluation date — approaches, the College is currently on a trajectory to meet four of its five overarching goals, with the exception of its objectives in the “waste” category, Hanlon said. When asked, Hanlon declined to comment on the record as to why the College would not meet these goals.
In accordance with the “gas emissions” tenet of the pledge, the statement outlines the College’s commitment to “reducing greenhouse gas emissions from campus operations by 50% by 2025, and by 80% by 2050.”
Hanlon explained that the College previously centered its goal of reduced emissions around finding a renewable fuel source for its heating system. In Jan. 2019, the College announced plans to transition to a biomass heating system, intending to partner with a private firm to construct a steam plant. Those plans were abandoned in Dec. 2020 after a number of student advocacy groups, alumni, and Hanover residents questioned the efficacy of biomass fuel.
“We backed away from [biomass] at the last minute because the technology is moving so fast that we didn’t want to make a huge investment in a legacy fuel source when it may be possible, we now believe, to have a combustion-free campus,” Hanlon said.
In the two years since the College scrapped its steam plant plans, Dartmouth has pivoted away from finding an alternative fuel source as its primary solution. Instead, according to Hanlon, the College is now focused on “efficiency steps” designed to reduce Dartmouth’s carbon footprint, primarily by constructing energy-efficient buildings.
To date, 11 buildings on campus, including all six dorms in the McLaughlin Cluster, have received varying levels of certification from Leadership in Energy and Environmental Design, a sustainability rating system. The Irving Institute will join their ranks once its construction is complete and become the second building to receive a Platinum Certification, the highest LEED accreditation.
The statement also outlines the College’s Infrastructure Renewal Fund, a construction initiative established in March, that aims “to help address critical infrastructure upgrades.”
The IRF receives its funding directly through the endowment and has been allocated $31 million for the 2022 fiscal year. College administration and the Board of Trustees are typically hesitant to spend the endowment on Dartmouth’s operating costs, Hanlon said, citing the importance of “intergenerational equity.”
“In this case, I and the Trustees became convinced this was reasonable, because the expenditures on dorm renewal and the power system were long-term benefits to the campus,” Hanlon said. “And so it actually was appropriate to ask future generations to bear some of the costs.”
Correction appended (11:49 p.m., Oct. 8, 2021): A previous version of this article’s headline stated that the College announced “divestment“ from fossil fuels. In order to clarify that the College announced a plan to do so, but did not immediately relieve itself of all fossil fuel investments, the headline has been changed.
Additionally, a previous version of this article stated that the College “intends to sell off its remaining public holdings in the sector once they expire.“ According to vice president for communications Justin Anderson, the financial instruments in question are not sold off by the College upon expiration; rather, the firm managing the instruments liquidates the investments at the end of a set term unless the investor — Dartmouth — wishes to renew them. The sentence has been corrected to indicate that Dartmouth will allow the financial instruments’ expiration.