Reed College’s Board of Trustees recently published its official rejection of Fossil Free Reed’s petition to divest the college endowment of fossil fuels (Reed College won’t divest fossil fuel holdings, web story, July 17).
Divestment, the act of selling financial holdings in a company or group of companies, historically has been used as a powerful tool — such as in the case of ending South African apartheid — to affect major systemic change.
We, the students and alumni that form the group Fossil Free Reed, are disappointed that the trustees’ formal response seems to ignore the months of discussion that have taken place, fails to meaningfully respond to many of the issues raised in our original letter demanding divestment (published in early February; see reedquest.org) and does not engage with our counterpoints to trustee concerns raised in two meetings between Fossil Free Reed and the trustees.
In the statement from Roger Perlmutter, chairman of the Reed College Board of Trustees, Reed made clear its recognition of the threats of climate change, stating, “climate change poses quite possibly the biggest challenge in human history.” Yet instead of taking commensurate action, Reed instead uses stale arguments to defend its cowardly decision not to take meaningful action.
The first reason given by the trustees against divestiture is that the board’s primary investment objective is fiduciary, and so should act on a proposed divestiture only “where the action taken reflects widely held, perhaps almost universally held, social or moral positions,” as stated in Reed’s Investment Responsibility Policy.
We have two main problems with this argument. First, climate change, which is supported by overwhelming scientific consensus and was described by Perlmutter as “possibly the biggest challenge in human history,” merits primary consideration over financial returns under the college’s Investment Responsibility Policy, if Perlmutter stands by these words.
Second, as the executive secretary of the U.N. Framework Convention on Climate Change points out, divesting from the fossil-fuel industry acknowledges the fact that the majority of known fossil-fuel reserves must be left unburned if we are to avoid catastrophic climate disruption. The possibility for assets to never become monetized has been recognized by the International Energy Agency, insurance companies and big banks. Therefore, a comprehensive approach to fiduciary responsibility must consider the increasing risks of fossil-fuel investments.
Incredibly, the trustees acknowledge having made their decision without yet providing even a shred of financial evidence substantiating their position. Fossil Free Reed has twice been denied the offer to bring an expert in sustainable finance to the discussions with the trustees. In addition, we have repeatedly detailed and made available a growing body of financial research that highlights the financial comparability of fossil-free portfolios while warning against the increasing risk of holding carbon assets in long-term investments, risks established in research by the University of Oxford, and backed by the large financial firms.
The second reason given by the trustees for their decision is their “responsibility to sustain Reed’s intense commitment to academic freedom,” which they deem to “require limiting the political role of the institution or the enlistment of the institution’s name in political causes.”
We reject the implied conclusion that investing in the fossil-fuel industry is politically neutral while canceling these investments is politically charged. Acting on scientific consensus, while often including politicized action, is a human — not bipartisan — concern.
In the words of Pitzer College Trustee Donald P. Gould, “At its heart, climate science has nothing to do with politics; CO2 has no political leanings. On issues of great moral consequence — and climate change is surely one — the academy has a duty to educate not only its students, but also society at large. Divestment is an educational statement, not a political one.”
While other institutions like Pitzer College and Stanford University demonstrate leadership on this issue, Reed has decided to avoid engaging in the intellectually challenging conversation around divestment. We are frustrated by the college’s sluggish and meek approach to addressing the biggest challenge in human history. We believe a comprehensive environmental policy requires that we divest our endowment.
There are a lot of students and alumni who aren’t satisfied by the trustee response, and we will keep pushing Reed to display a fiduciary and moral backbone by divesting from the fossil-fuel industry that is degrading, if not destroying, our future and our children’s futures.
Maya Jarrad and Austin Weisgrau are leaders of Fossil Free Reed. Jarrad is a 2014 Reed graduate in environmental studies economics. Weisgrau is asenior in economics.
(Our response can also be found here)