See the PDF for citations.
A Note on the Revision
The power of fossil fuel divestment lies in the political statement that it makes, not the financial impact on targeted fossil fuel companies. On October 27th, 2015, the Board of Trustees responded to our initial proposal for fossil fuel divestment, indicating that they were committed “to honor [this] proposal and to demonstrate that [the Board agrees] with its objectives.” At that 1 time, however, the endowment’s makeup did not allow the Board to divest as we outlined in our original proposal. As a result, no public response was issued, no political statement was made, and the potential for impact was lost.
It is with this in mind that we are resubmitting our proposal with three crucial changes. These changes give the Board the opportunity to follow through on their stated commitment.
- We have expanded our request to now include the top 200 companies, rather than the top twelve;
- In addition to withdrawing current holdings in these companies, we request that the Board publicly commit to not invest in these companies in the future;
- We request that the Board issue a public statement to The Source regarding Oberlin’s current holdings in the targeted companies and their policy on investing in these companies in the future.
All changes that we have made are colored in red.
Climate change is considered by many students, faculty, and alumni of Oberlin College to pose the greatest threat to humanity of our time. This destabilization of the global climate is a direct effect of the burning of carbon-based fossil fuels. While the consumption of these fuels is widespread, their extraction is concentrated within a small number of corporations.
The scientific community has warned for decades of the consequences that will result from the extraction and subsequent combustion of these fuels: extreme weather, drought, disease, destruction of homelands, forced migration, civil strife, ecosystem collapse, and rising sea levels. Many of these dangers are already present today, and are causing disproportionate damage in developing and island nations where the means to adapt to a changing climate are not readily available. The long-term and devastating drought that preceded the Syrian Civil War or the catastrophic typhoon that struck the Philippines in 2013 and shattered records for storm intensity are merely two examples of climate change directly contributing to a degree of suffering and loss of human life that shocks the conscience and compels us to action.
Any economic investments Oberlin holds in the companies that contribute to these catastrophes reflect a tacit approval of the harm inherent to these corporations’ business models. Furthermore, these investments are a missed opportunity to align our institutional actions with the beliefs and values of our community. We believe that the timely and public divestment of Oberlin’s endowment from the fossil fuel industry would once again position us as a leader of social and political advancement. Oberlin’s pioneering role in this movement would encourage our peer institutions to follow and make a recognizable contribution to the ongoing dialogue about the real consequences of our nation’s dependence upon fossil fuels. We therefore call upon the Board of Trustees to direct the Oberlin Office of Investment to divest any direct holdings from the twohundred corporations in possession of the largest fossil fuel reserves, and to publically state that Oberlin will not invest in these companies in the future.
In recent years the dominant political dialogue about climate change has shifted away from a discussion about the nature of the problem and towards a conversation about how best rise to the challenges of transitioning into a low-carbon world while continuing to foster human development across the planet. It is widely understood among the scientific community that if the United States is to meet its commitment to the global goal of climate stabilization at 2° C above Holocene mean temperature, it must reduce its greenhouse gas emissions by 80-90% relative to 2010 levels by 2050. In light of this reality, it is hard to imagine a medium-term future in which the carbon-based fuel industry could be called a sound investment opportunity, economically, politically, or reputationally.
Fossil fuel divestment is not just good policy, it’s sound economics. The financial argument for divestment accounts for the fiduciary obligation to maximize endowment performance. At the same time, it recognizes the considerable risk of continued investment in the fossil fuel industry. Current market valuations of fossil fuel companies are based in large part upon their extensive fuel reserves, which vastly exceed the scientifically established “carbon budget,” an emissions threshold above which planetary warming of 2° C becomes inevitable. Many economists have written that these so-called “unburnable” reserves have the effect of creating a market bubble, which will become increasingly strained as governments adopt policies to prevent the burning of these reserves. In fact, the industry is already showing signs of instability: in four out of the the five years from 2009-2013, a fossil-fuel free S&P 500 outperformed the unmodified index.
Divesting Oberlin’s endowment from fossil fuels does not appear to pose a threat to the College’s future financial stability. This investment strategy, confirmed by analysts to be realizable without loss of portfolio performance, has already been pursued by cities as large as San Francisco, by renowned academic institutions such as Stanford University, and by private foundations such as the Rockefeller Brothers Fund.
As students at Oberlin, we are increasingly aware of the dissonance between our own institutional commitments to sustainability and the allocation of our resources. Oberlin College proudly announced its leadership role in environmental stewardship upon becoming a founding signatory to the American College and University Presidents’ Climate Commitment (ACUPCC) to carbon neutrality by 2025. We have arrived at an irreconcilable contradiction by investing in an industry whose products we’ve judged too irresponsible for our own consumption.
Oberlin has an opportunity to set a precedent among our peer institutions by becoming the first college or university with an endowment of our size to divest from the fossil fuel industry. Nearly all of our peer institutions including Wesleyan, Middlebury, Swarthmore, Carleton, and Reed have active and growing divestment campaigns. What’s more, Pitzer and Hampshire Colleges recently joined the ranks of several smaller institutions who have already committed to remove their endowment holdings from the fossil fuel industry, generating national media attention. Such publicity has achieved the primary goals of the fossil fuel divestment movement; it stigmatizes the fossil fuel industry, it generates international recognition for these colleges, and it provokes concern among fossil fuel corporations and their investors. Given the current political and economic reality, it seems surprising that neither Oberlin nor any of its peer institutions have committed to divesting from fossil fuels. The window for Oberlin to be a leader in this movement is quickly closing.
While the burning of fossil fuels depends upon a complex network of actors and individuals, the limited number of corporations engaged in the extraction of these commodities creates an opportunity for a divestment process that is straightforward, clean, and politically resonant. We ask the Board of Trustees to oversee, within the next two years, the reallocation of any direct endowment holdings in the two-hundred companies in possession of the largest fossil fuel reserves, as measured by Fossil Free Indexes in January 2015. The companies, ordered from most to least based on the potential carbon emissions of their reported reserves, are attached to the end of this document.
- Investment in the fossil fuel industry materially contributes to the civil strife, disease, drought, destruction of homelands, forced migration, and other consequences of climate change that shock the conscience;
- Oberlin’s divestment from these corporations will have significant reputational impacts on this industry and will encourage our peer institutions to join us; and
- Fossil fuel divestment is welcomed by the greater Oberlin community;
We ask the Board of Trustees:
- To divest Oberlin’s direct endowment holdings from the two-hundred corporations cited below within the next two years;
- To not invest in these companies at any point in the future; and
- To publish a statement in The Source detailing their decision on divestment and their policies regarding future investments in the targeted companies.
We would like to reiterate that for their response to have the intended impact of divestment, the Board must: 1) withdraw current direct holdings in fossil fuel companies, 2) commit to not invest in these companies in the future, and 3) do so in a public manner. We also hope that the Board consider reinvesting endowment capital in socially responsible ways.
We believe that Oberlin’s history and ethos not only make us well suited to the task of leading our peers in this movement; indeed, they compel us to do so. Above all else, the call to divest is a call to end our complicity in a set of actions that precipitate disastrous consequences. We ask that the Board act in the interest of Oberlin’s future, with support of the present Oberlin community, and in accordance with Oberlin’s legacy.