This week, Skidmore released the Phase 1 report of its review of divestment from fossil fuels. The report explains the implications of divestment for Skidmore, which the Editorial Board has since reviewed.
Phase 1 was the process of evaluating what divestment would mean for Skidmore, and what the implications are for divestment on a global scale. After reading the 32-page report, we identified some tension between the Skidmore Task Force, which is clearly advocating for divestment, and Skidmore’s investment advisors, Colonial Consulting, who state that divestment would be incredibly difficult and damaging for Skidmore. Colonial specifically states that divestment “would be challenging, costly, and would likely impact the Colleges ability to fund student financial aid, academic and related program support, employee pay and benefits, capital projects and other expenditures that are essential to carrying out the College’s educational mission.”
The report also states numerous times that the act of divesting from fossil fuels ultimately would not have a significant impact on the larger issue of climate change, but would instead be more of a symbolic move to aid stigmatization of fossil fuel companies. So, where does this leave Skidmore?
Skidmore College has a reputation to uphold as an environmentally aware institution. It also has an obligation to stay true to its goals of social responsibility, and its endeavor to produce globally conscious citizens. As President Glotzbach stated in a meeting with the Skidmore News, while discussing divestment, the College is addressing the “most important issue that humans have ever faced,” namely, climate change.
However, full divestment would have drastic negative implications for Skidmore. Of all Skidmore’s total investments, only 4% of its assets are connected to fossil fuels. However, because Skidmore’s endowment is invested in outside-managed investment funds that almost all contain fossil fuel holdings, Skidmore would have to liquidate and relocate about 100% of their endowment. Thus, in-turn, Skidmore would be forced to reallocate funds to less reputable and less capable investment managers, described by Colonial as “simply not the best investors,” causing significant long-term and short-term losses to investment returns. According to Colonial Consulting, the college would lose about $127 million in returns over 10 years, which is a significant loss, since the endowment currently stands at $335 million. This means that in enacting a primarily symbolic move of divestment, Skidmore would have to sacrifice its financial security
Significant endowment funds go to financial aid. In forfeiting some of this endowment money, Skidmore would compromise the opportunity to admit large numbers of students from different socioeconomic backgrounds. In this process, Skidmore would lose sight of one of its core missions, which is to have a “diverse population of students.” So, while the school would certainly be setting an environmental precedence, it would be neglecting other social responsibilities—such as having a diverse study body, and providing opportunities to less privileged students.
Skidmore would also be forgoing other opportunities for sustainability—such as sustainable infrastructure, or further educative programs in the field of sustainability. Skidmore could instead allocate the money it would be losing in divestment towards a sustainability minor, or to the Skidmore Environmental Action Club. Middlebury College has taken a similar approach. They decided not to divest from fossil fuels, but they chose to allocate $25 million of their endowment towards “investments focused on sustainability business such as clean energy, water, climate science, and green building projects.” They also allowed $150,000 to be managed by their Socially Responsible Investment Club, a student-run organization. We believe an approach like this would be ideal for Skidmore.
Skidmore College is not a large enough institution to lead the charge in addressing climate change or divestment. The damage divestment would cause to Skidmore as an institution does not make divestment a reasonable option right now, or in the near future. However, Skidmore should maintain its role as a socially responsible school, and must respond the best it can to climate change, be it not full divestment from fossil fuels.
While we believe that divestment from fossil fuels is an unrealistic goal for Skidmore at this time, we certainly recognize the institutions need to act responsibly, act quickly and act sustainably. We hope that ultimately, Skidmore does revisit the issue of divestment, at a time when it is a more realistic accomplishment.