Headlines

Like Harvard, Middlebury Endowment Debates Fossil Fuels

University endowments around the country--both big and small--are pondering the role of fossil fuel investments in their portfolios, and endowments' social responsibilities more broadly.

(January 23, 2013) -- From the mammoth $30.7 billion Harvard endowment to the roughly $900 million endowment of Middlebury College, institutions nationwide are delving into the social impact of their investments.

In November, more than 70% of Harvard University's roughly 3,600 undergraduate students voted to ditch fossil fuel investments from the school's endowment. Students had voted for the $30.7 billion university endowment to divest from the top 200 publicly traded companies that own the majority of fossil fuel reserves. “Members of the Corporation Committee on Shareholder Responsibility will meet with students this semester to discuss endowment investment policies and the students’ concerns regarding fossil fuels,” Harvard University spokesperson Kevin Galvin told Campus Reform. He added that Harvard operates with a "strong presumption against divestment" from any industry.

At Princeton University, its Coalition for Endowment Responsibility even created a committee to lobby Nassau Hall, the centerpiece of the university campus.

Students from significantly smaller universities are also making their voices heard. A panel this week at Vermont-based Middlebury College explored the ongoing debate among students and faculty nationwide. It analyzed the factors that college trustees should consider in determining whether to place restrictions on how the endowment is invested along with the advantages and disadvantages of using divestment as a means of addressing climate-related concerns.

“The college administration and the board of trustees are interested in engaging our students’ interest in the endowment," Middlebury College President Ronald Liebowitz has said. According to Liebowitz, roughly 3.6% of Middlebury’s endowment is directly invested in fossil-fuel companies, and that the endowment finances about 20% ($50 million) of the college’s annual operating cost.

“It is vitally important to understand both the risks and rewards of one’s investment decisions as we are the stewards not only of the endowment for the current generation of Middlebury students, faculty and staff, but for future generations as well,” Liebowitz wrote in a December email to students and faculty with a subject heading, “On the College’s Endowment."

While Middlebury College's endowment is $900 million in size, it's part of a consortium of university funds--run by Investure--that in total amount to $9 billion. "We're invested in commingled funds, so we're really all in it together. To do something like divest from fossil fuels, we would need to get consent of our other partners--Barnard and Dickinson colleges, for example. So if we take a broad action like this, we need to convince our partners," Patrick Norton, vice president for finance and treasurer at Middlebury College, told aiCIO. He noted that while he believes it's not impossible to collectively decide to divest from fossil fuels, Middlebury College--and others like it that are part of a consortium of endowments--just have another level of overhead.

"The general trend for universities of all sizes is pressure among students and faculty to divest from fossil fuels and other environmentally-hazardous investments," Norton added. "It's becoming a louder conversation."

Watch Middlebury College's full panel discussion here.

| pvasan@assetinternational.com | 646-308-2742