Posted by The Editorial Board
On April 30, 2013, the Student Government Association (SGA) adopted the divestment resolution, Resolution 23-51: A Resolution to Support the Development of a Socially and Environmentally Responsible Investment Policy, as drafted by SGA's Sustainability Committee (SuCo) and the Environmental Action Club. The resolution was supplemented by a petition with over 500 signatures. This represents the Skidmore student body at its finest - students not simply contemplating in a creative manner, but actually mobilizing - actually initiating a call to action.
On May 2, 2013, the divestment petition was delivered to President Philip A. Glotzbach, and this past October, the Board of Trustees empowered him to appoint a divestment task force. On February 9th, students received an email from SGA President Sam Harris '13 explaining the nature of the task force, the SuCo resolution, and Glotzbach's general plan for the divestment campaign.
The question remains, however, whether or not this initial plan will ultimately lead to results, or if it will instead be an empty gesture of environmental responsibility used as an impressive advertising ploy for prospective students. The goal is to adopt an environmentally responsible investment policy, where none of our endowment stays invested in fossil fuels. These organizations are defined in SuCo's resolution as "any of the two hundred publicly traded companies with the largest coal, oil, and gas reserves, as listed in the Carbon Tracker Initiative's 'Unburnable Carbon' report".
The obvious downsides to this decision stem from the desire to protect the College's endowment. At approximately $280 million, according to U.S. News, it is one that is already fairly small in comparison to other small liberal arts schools of similar caliber (Vassar's endowment, for example, is over $860 million). Swarthmore, Tufts, Harvard and Brown's administrations have all rejected the possibility of divestment campaigns, though they control significantly larger endowments than our own.
A very small percentage of our endowment goes annually to campus operations and programs, while the majority of the funds are reserved for future projects as well as greater investment to increase the school's endowment. The freeze or decrease of this fund could potentially put a hold on several of the College's projects as well as threaten the school's public ranking.
Additionally, there is a direct link between strong academic talent of professors and a College's endowment, in that the account affects both teacher salary and benefits, perhaps ultimately denoting a decline in the value of our professorial staff if we follow the campaign through. Being that this fund is small, it is a fair concern that we are not in a position to be so selective with our investments - we must maintain financial relationships that have already proven to be beneficial.
These are, however, risks the student body has expressed an interest in taking. The pros in this scenario stretch far beyond the cry for good sustainable citizenship. Divestment from fossil fuel companies implies a move against climate change at a much more fundamental, holistic angle. It approaches from the source, at an institutional level, rather than merely attempting to alleviate the symptoms of environmental decline.
While there is little information released as to exactly where our endowment is tied up, SuCo's Emily Singer '16 has reported that approximately five to ten percent is invested in fossil fuels. This could represent a fairly significant decline in our endowment if we freeze all assets tied up in fossil fuels, however, there is in fact evidence depicting a hopeful future for more sustainably responsible investments.
"Fossil fuels investments, in next economy terms and indeed in general economic terms, no longer appear to be the attractive source of risk-adjusted returns they have historically been," reported "green economist" Garvin Jabusch to the Green Alpha Advisors with regard to the Green Alpha Fund.
It is predicted that ultimately it will be a much more financially sound decision to invest in environmentally conscious organizations than companies that depend on fossil fuels. Shell Oil company geologist M. King Hubbert in his recent Financial Post article predicts that by 2060, solar power may eclipse oil as we reach a point of "peak oil" - a point where the world oil production plateaus and then inevitably begins to decline.
"About 80 percent of the world's fossil fuels must remain buried in the ground if we have a chance of avoiding catastrophic climate change, according to the International Energy Agency," Hubbert said, meaning that not only is it environmentally responsible to divest but it could potentially be a fiscally-prudent decision. Renewable energy sources are a quickly developing industry and a potentially worthwhile investment.
Regardless of the evident pros and cons of the campaign, it still remains to be seen if Glotzbach and the administration will in fact follow the divestment plan through to its completion. The plan calls for extensive research by the task force, culminating in a presentation to the administration and the board of trustees in 2015.
The force will issue a report to the Board of Trustees and the College community, "understanding that any recommendations would not be binding upon the Trustees or the Administration" according to Gloztbach's plan of action. The rhetoric here makes clear that the College is in no way committed to the act of divestment but rather to engaging in a divestment campaign.
We can publicly claim that we are in the process of divesting from fossil fuel companies, of developing an environmentally responsible endowment, and we can continue to make that claim until 2015. At that point, the Board of Trustees and the administration have full power to put an immediate halt to the plan. It is important to acknowledge that until then, the College reaps the benefits of choosing to divest without actually risking any part of the endowment.
The College's history with divestment in South Africa instills very little faith in a new reinvestment plan. During apartheid, many colleges divested from the South African steel industry in the interest of aligning their investments with their mission statements of responsible citizenship. As a result of international pressure, the South African government was compelled to end apartheid so to avoid economic collapse.
Skidmore did not divest. The Tisch Learning Center is, in fact, built of South African steel - the College supported the industry throughout apartheid.
There is a 1985 Schenectady Gazette article entitled "Skidmore Trustees Waffle on Investment in South Africa" despite the implemented plan to freeze all such accounts. Divestment from the fossil fuel industry presents a perfect opportunity for redemption and the Editorial Board commends the student body as well as Glotzbach for mobilizing effectively thus far. There is still reasonable doubt, however, as to whether or not the plan will come to fruition. Ideally, the start of the campaign would guarantee its achievement, but due to the non-committal rhetoric of Glotzbach's plan and in light of our history with divestment, this appears to be a somewhat na??ve expectation.