Letter to Trustees

Dear Trustee:

Prior to this month’s Carleton Board of Trustees meeting, we are writing to update you on recent developments in the Divest Carleton alumni movement, which continues to gain momentum and to support and partner with student actions on campus.

In the last year, we have added nearly 300 signatures to the alumni petition, for a current total of 1595. This includes 1496 living alumni signatures: over 5% of the entire population, representing 68 classes.

These alumni make their interest in divestment known in multiple ways. Since Carleton missed this June’s deadline to divest its endowment from fossil fuels, $2418.13 was distributed from the Carleton College Fossil Free Fund to the nonprofit environmental organizations 350.org and MN350. This brings the total lifetime distributions from the fund to $9199.76, collected from 121 donations. The fund will remain open for further donations through the upcoming academic year, with its next due date set as June 2020. Its current balance sits at $2100.

June 21, 2019, Goodhue Superlounge

At this year’s reunion, a concerned group of alumni organized a panel discussion on divestment from fossil fuels and socially responsible investing. It featured student, alumni, and faculty panelists speaking on topics such as the economics of Carleton’s endowment, the history of the Divest Carleton movement, and the role of the Carleton Responsible Investment Committee (CRIC) in the college’s ethical investing decisions.

This event filled the Goodhue Superlounge, with 88 audience members eagerly volunteering questions and comments throughout the hour and a half time slot.

As the Divest Carleton movement grows, so do the worldwide movements to divest and the wider awareness of the threat of climate change. So far, 1135 institutions with managed assets of $11.48 trillion have committed to divesting from fossil fuels. Recently, the entire University of California system joined their ranks, committing to divesting its $13 billion endowment and $70 billion pension. UC’s CIO and Investment Committee Chair stated: “We believe hanging onto fossil fuel assets is a financial risk.” Just this past Friday, Smith College announced that it would also divest its $1.9 billion endowment. Both the ethical and the safe choice, these days, is to divest from fossil fuel stocks.

Many Carleton students and alumni joined this September’s Global Climate Strike, which organizers estimate drew 7.6 million people into the streets to demand systemic action in response to climate change. These protesters and all the alumni, faculty, parents, staff, and students of Divest Carleton agree: the time to act is now. We invite you to read a recent Viewpoint article, submitted by alumni and students, on the ways in which the college can better address the climate emergency, including by divesting from fossil fuels.

Thank you for your time, and for all you do for Carleton. Please let us know if we can answer any questions.

The Divest Carleton alumni leadership team

Mindy Bell ‘80
Eleanor Haase ‘79
Rebecca Hahn ‘09
Maddie Halloran ‘14
David Loy ‘69
Kathryn Olney P’15
Peter Scheuermann ‘12
Dimitri Smirnoff ‘15
Brett Smith ‘64
Rev. Dwight Wagenius ‘64


Divestment makes sense for universities (and colleges)

October 16, 2019

Divestment Makes Sense for Universities

To the Editor:

Divestment is a powerful financial tool that reduces the flow of money to the fossil-fuel industry. The purchase of bonds directly finances the company’s exploration and development of new oil and gas reserves. These bonds are paid off by selling the oil and gas 10 to 30 years in the future. In the short term, the cost of borrowing for marginal projects such as Arctic oil may force their abandonment. Divestment also lowers the public’s demand for their stock, and thus decreases the company’s market value. The majority of executive pay is tied to the company’s stock price, and so top executives respond to the stock price in making decisions.

When investors invest in fossil-fuel companies whose value is partly based on proved reserves, shareholders will suffer losses when stock prices decline as they correctly incorporate the continually improved competitiveness of noncarbon energy and the impact of potential stranded assets on future company earnings. The stock market operates with imperfect information as investors and companies make decisions based on guestimates about the future stream of profits. Just as investors compete to be the first to find a new growth industry, they compete to be the first to jump out of a dying one. Divesting early protects our pension and endowment funds.

Market returns for the energy sector have been relatively low compared to other sectors. The cumulative total return to the energy sector from the market peak (Oct 2007) to Dec 31, 2018 is -4.8 percent, compared to the S&P 500 averaged return of 355 percent.  The outlook is ominous. A UK study predicts a global wealth loss of $1 trillion to $4 trillion resulting from continued investments in fossil-fuel discovery and extraction by countries, including the U.S., by 2035. Leaders of over 30 central banks endorsed a report warning that a massive reallocation of capital will be required to reduce greenhouse emissions dramatically.

For the past seven years, thousands of students, faculty, staff, and alumni have repeatedly urged UC to consider both the moral implications and financial dangers of continued fossil-fuel investments. Over the summer the UC faculty approved by 78 percent to recommend that the Regents divest the UC endowment from the top 200 fossil fuel companies. Consequently Jagdeep Bachher, Chief Investment Officer, and Regent Richard Sherman, Chair of the Investments Committee reported that after looking closely at their fossil-fuel assets, they decided that fossil-fuel assets are risky investments without compensating returns. The UC Regents announced divestment of all fossil-fuel investments, including stocks, bonds, and funds of all fossil-fuel companies and major suppliers, from its Endowment and Retirement portfolios, which total $83 billion. Plus UC has pledged to direct $1 billion in funding of alternative energy sources by 2020. At the Regent’s meeting, Bachher credited student activism for raising his awareness about the issue and said the students were his early warning system.

Divestment with reinvestment is one effective policy that universities can use to preserve a functioning biosphere for future generations. Students and faculty should continue their activities that inform their university leaders that divestment is imperative for financial, environmental, and moral reasons.

Clair Brown
Professor of Economics
University of California at Berkeley

Eric Halgren
Professor of Radiology
University of California at San Diego

Reprinted from: https://www.chronicle.com/blogs/letters/divestment-makes-sense-for-universities/

Carleton and Climate Crisis

An Open Letter to the Carletonian, September 29, 2019

Earth is in the midst of a climate crisis. In July of this year, several higher education networks concerned with sustainability recognized this crisis by declaring a climate emergency. Carleton indirectly supported this emergency declaration as a member of Second Nature, a network of about 600 colleges and universities.

The organizations declaring a climate emergency simultaneously published a Climate Emergency Letter that they planned to give to government officials and the media before the UN Secretary General’s Climate Summit in September. The organizations called on other networks and educational institutions around the world to join with them in signing the letter.

So far, despite appeals from dozens of alumni, President Poskanzer has refused to sign Carleton onto the emergency letter individually. We believe that signing the letter directly is important to reaffirm Carleton’s commitment to taking emergency action and to emphasize its awareness that climate change poses a threat to Carleton students. See the email to President Poskanzer and his response here.

But signing the letter is just the first step. We face a climate emergency, and Carleton’s response to date does not reflect that reality. Significant new action is required.

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