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DivestBU Pushes for Green Endowment

Student group wants University to divest from fossil fuels


Some movements start with a bang; others start more quietly, with an idea like the one planted in Benjamin Thompson’s brain after he read Bill McKibben’s July 2012 Rolling Stone article “Global Warming’s Terrifying New Math.”

McKibben, an environmental activist and author of The End of Nature and Eaarth, recapped what climate scientists have said for years—that Earth can sustain life up to another two degrees Celsius, which translates, by the Carbon Tracker Initiative’s calculation, into 565 more gigatons of carbon dioxide pumped into the atmosphere. But the world’s top fossil fuel companies control enough carbon that its combustion would belch another 2,795 gigatons of the greenhouse gas into the air. That’s five times more than the planet’s sustainable threshold, McKibben says, and enough to set off an environmental Armageddon.

McKibben’s calculations struck a chord with Thompson (GRS’17), who read the article just months before starting work on a graduate degree in mathematics. He signed up for a fossil fuel divestment retreat organized by the Massachusetts branch of McKibben’s 350.org and pitched the idea last fall to several BU environmental groups. About a dozen students joined him to form DivestBU, with the goal of encouraging the University to divest the world’s top 200 fossil fuel companies from its endowment.

“This is an industry whose continued existence depends on the end of ours,” says Thompson, whose DivestBU group meets every Sunday evening in the George Sherman Union Ziskind Lounge. “This is not an industry we should be tolerating.

“Students at BU and across the country are incredibly receptive to this idea,” he says, even though their schools’ administrations are not. “I think a lot of it is because this is our future. We’re the ones who are going to be living with this.”

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Benjamin Thompson (GRS’17) spoke at a recent rally organized by Tufts Divest, one of 22 university divestment campaigns in Massachusetts. Photo by James Ennis

Divestment campaigns have been organized at more than 270 campuses nationwide, 22 in Massachusetts, according to Shea Riester, a student divestment organizer with Better Future Project and 350.org. Since the movement began last fall, four colleges—Hampshire College, in Massachusetts, Sterling College, in Vermont, and Unity College and the College of the Atlantic, in Maine—have announced either that they’ve never invested in fossil fuels or that they will divest. Divestment advocates say universities generally carry up to 3 percent of their endowments in fossil fuels, but most do not fully disclose their investments to the public.

One of DivestBU’s first actions was writing a letter last September to President Robert A. Brown, asking him to lead the University in divestment. “Financing our education is not worth selling our future,” the letter read. “Any gains our endowment has at the cost of our future are, simply put, not sound investments.”

Brown replied in early October that he could not support the movement. “The world does not yet have viable technological and political alternatives to fossil fuels to meet its energy demands,” he wrote. “The best near-term solution is to work with fossil fuel producers to mitigate, to the extent feasible, the release of greenhouse gases—the worldwide shift to using natural gas is an important step in this direction—while developing technologically and economically sound alternative energy strategies.”

Brown also wrote that he would refer DivestBU’s request to the nascent Advisory Committee on Socially Responsible Investing, which makes recommendations to the Board of Trustees Investment Committee.

According to a 2009 National Research Council of the National Academies’ report, nonfossil fuel energy sources amounted to only 3 percent of U.S. total energy use, excluding 8 percent from nuclear power.

Brown says in an interview with BU Today that BU has divested twice in the past: first from firms invested in South Africa during the apartheid era, and again from firms doing business in the Sudan during the government-sanctioned genocide. “Divestiture,” he says, “should occur when an overwhelming majority of people conclude that it is an effective means to prevent unambiguous and egregious harm that is fundamentally at odds with the stated mission of the institution.”

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DivestBU handed out cupcakes last fall decorated with 565, representing the amount of gigatons of carbon dioxide the atmosphere could sustain, and 2,795, the amount of gigatons of fossil fuel industries have to burn. Photo courtesy of DivestBU

In the wake of Brown’s letter, DivestBU members continued to collect petition signatures from students in classrooms and dining halls and through events like Break Up with Fossil Fuels on Valentine’s Day, when they handed out chocolates and talked to passers-by about divestment. So far they’ve collected 500 signatures, and the group hopes to hit 1,000 before delivering the petition to Brown. On April 8, DivestBU members will present their case to Student Government members, asking them to pass a resolution in support of divestment.

“The climate change crisis is the most pressing issue of our generation,” says DivestBU member Caroline Birsner (CAS’15). “Divestment is one of the tactics to address this issue.”

“The goal is not really to bankrupt these companies, but to send a message,” says Colby Smith (ENG’14), another DivestBU member. She is frustrated by her generation’s political apathy and feels divestment could be a rallying cause. “If you really want something and you see a problem, you can change it if you put in the effort.”

Laurence Kotlikoff, a William Fairfield Warren Distinguished Professor and a College of Arts & Sciences professor of economics, sympathizes with DivestBU, but doesn’t agree with them. A former protestor against the war in Vietnam, Kotlikoff says the University’s fossil fuel divestment “would have some PR impact, but it wouldn’t have much of an economic impact on these industries.” Even if every university in the country divested, he says, it wouldn’t alter the valuation of Exxon stock. He points out that BU trustees have a “fiduciary responsibility to the University, not to fixing our carbon policy and the environment.” Also, he says, divestment based on social issues is a slippery slope. Does BU then divest from alcohol and tobacco?

“What is needed to fix the environment is a carbon tax,” Kotlikoff says, “and it should be a significant one to deal with dirty energy.”

Other faculty members have fewer reservations about divestment. In December, Cutler Cleveland, a CAS professor of earth and environment, published an op-ed in the Daily Free Press expressing support.

“There are hundreds of stocks and dozens of funds that specialize in energy efficiency and low-carbon energy, and some of these exhibit impressive financial performance,” wrote Cleveland, director of the Center for Energy & Environmental Studies. “If the University views energy as an attractive area of investment, it has some clear choices other than the carbon corporations.

“Brown indicates that he is concerned about (a) climate change and (b) the performance of our endowment. He can address both by selling some fossil fuel stocks and investing the proceeds in energy efficiency on our campus!”

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A sign in the office window of Nathan Phillips, a CAS professor of earth and environment, who supports DivestBU. Photo by Kalman Zabarsky

BU has undoubtedly become greener under Brown’s leadership. Sustainability@BU was launched in 2009 and has made strides in reducing energy use, waste, and greenhouse gas emissions through eco-friendly construction practices and renovations.

But DivestBU members see a paradox here. Smith says the University emphasizes its sustainability measures, but invests in fossil fuels; it wants to “green the campus,” but doesn’t want to “green the portfolio,” she says. “It’s fighting the problem, but it’s not fighting the cause.”

Nathan Phillips, a CAS professor of earth and environment, is inspired by DivestBU and believes student members are part of the University’s long-standing tradition of leadership on social issues—from women’s rights to civil rights.

Divestment is “one of the very biggest issues of our day and the question is, are we going to get serious about it now? And if not now, when?” Phillips says. “If we keep saying ‘foreseeable future,’ we just keep kicking the can down the road.”

DivestBU meets every Sunday at 5:15 p.m. in the Ziskind Lounge, on the second floor of the George Sherman Union, 775 Commonwealth Ave. All students, faculty, staff, and alumni are welcome to attend.

Leslie Friday, BU Today, Boston University
Leslie Friday

Follow Leslie Friday on Twitter at @lesliefriday.

7 Comments on DivestBU Pushes for Green Endowment

  • Mark on 04.05.2013 at 9:16 am

    Very glad to see BU students get active on this issue!

  • BU Employee on 04.05.2013 at 12:06 pm

    Interesting commentary here on all sides.

    As to President Brown’s remarks, I would say that the fossil fuel industry absolutely represents an “unambiguous and egregious harm that is fundamentally at odds with the stated mission of the institution.”

    The overwhelming body of peer reviewed scientific research shows that climate change and the steady rise in global average temperature is a direct result of humans pumping unprecedented levels of CO2 and greenhouse gases into the atmosphere via burning of fossil fuels. Rather than act in the interest of humanity, this industry chooses to continue their pollution, threatening the very existence of the planet and all species on it for short-term profits.

    While I appreciate President Brown’s fiduciary responsibility to BU, and the fact that it is not the endowment’s role to fix policy or environment, to stay invested and profit from such an industry while highlighting the University’s climate change related research and sustainability efforts in the public eye is irresponsible. It is at odds with the mission of the institution.

    Mr. Thompson put it best: “Any gains our endowment has at the cost of our future are, simply put, not sound investments.”

    DivestBU is on the right side of this debate. So long as the University remains invested in fossil fuels, it is part of the problem. I hope they choose to be part of the solution.

  • anon on 04.05.2013 at 3:06 pm

    Divesting from fossil fuel stocks is not as simple as many of the anti-fossil fuel voices think. Most/almost all endowments do not invest directly in stocks, but rather through co-mingled funds that provide the appropriate risk profile and diversification for the university (as well as top return performance, risk-adjusted). So, BU and other universities cannot simply hit “sell” and wash their hands of fossil fuels. And these funds are not ETFs or mutual funds that can be bought on your eTrade account.

    Unless an endowment wants to break relationships with top fund managers, wants to only invest in socially responsible funds or can invest through a separate account, a university cannot dictate the holdings of a fund, so long as the holdings are within the stated risk profile and strategy agreed upon and marketed by the fund.

    The primary responsibility of an endowment is to provide adequate and growing financial resources for current generations, while maintaining purchasing power for future generations. This is THE charge for endowment managers, not environmental activism.

    Furthermore, divesting from fossil fuel stocks will really have no impact on the financial well-being of those companies. It would be a more symbolic move than anything else. Savvy investors would be waiting and willing to pick up those stocks.

    • Ben Thompson on 04.05.2013 at 9:05 pm


      While we don’t know where the BU endowment is invested, everyone advocating for divestment is well aware that most of the capital is in commingled funds. We know it will take time to divest, which is why we ask that it be done over a period of five years, not immediately. But we don’t think that BU would have to break its relationship with fund managers. After having spoken with a VP from Goldman Sachs, it is our understanding that if a client had over 20 million dollars in a fund, the fund manager would likely be willing to create a separate slightly adjusted fund to fit the client’s needs. And, again, while we don’t know how BU’s endowment is invested, I would imagine that the majority of the money is in a handful of large funds.

      And yes, the primary responsibility of the endowment manager is to grow the endowment. But there are exceptions to the rule, and we think the fossil fuel industry is one such exception. Frankly, an industry that kills people to make energy, like, say, an industry that owns people to make cotton, is simply not an industry worth investing in. That the industry does not have malintent, and that both continents and perhaps decades span the space between industry and injury does not change the moral calculus we should be wrestling with.

      A bit to justify the urgency around this issue: The International Energy Agency says that to avoid 2C of warming we need to stop building all new fossil fuel infrastructure in the next four years. If we fail to keep warming below 2C, we will likely kick off feed-back loops that will take warming past 2C to 4C, where the World Bank (who in the past has defended the fossil fuel industry, and is not in any way an environmental advocacy organization) says we have no reason to be confident that human civilization can adapt. It would rocket past 4C to 5.6C, which is the difference between mid-20th century and the global average temperature throughout the last ice age when there was a glacier where we now sit. And then past 5.6C to 6C by the end of the century, when it is estimated that the global carrying capacity could drop to just 1 billion people. Of course, these are very rough estimates, but I’d like never to find out if they are right or not.

      We also are not so sure divestment would conflict with the charge of the endowment manager to grow the endowment. As any first year finance student knows, and as we all learned in 2008, past performance is not an indicator of future returns. It can only take so many more super storms, super floods, and super droughts before the American people decide they want to live a different way. And while we won’t transition immediately, it will become immediately apparent to investors that pipelines and power plants will not run long enough to get out of the red. Exxon’s assets would then truly become toxic in every sense of the word. Some investors are already awakening to this risk. Reports about the risks have started coming from more mainstream institutions like HSBC and the World Bank. It would be prudent for BU to step ahead of the crowd so as not to be caught in this bubble.

      In summary, divestment is possible (albeit hard), right, and responsible. I believe that’s sufficient to make my case. A lot of people, though, wonder if it is also an effective means to a greater end. You are right, Anon, in that it will not directly effect the bottom line or behavior of the industry (Though I do hope that it will give investors pause when they consider the long-term profitability of the industry and its ability to overcome the growing climate movement). My generation, and the lives of billions, depend on our ability to enact aggressive federal (and in-turn international) legislation, like a carbon tax, and soon. But, as we are all aware, the political space for this does not yet exist. The divestment movement allows us to grow a climate movement on college campuses which is sort of home turf for my generation. And it enables us to have important conversations about what it means to allow these industries to operate the way they do. Hopefully after we divest we will be able to move our new-found power off campus and get that legislation we need.

      A turning point in the civil rights movement was Freedom Summer, when southern organizers brought down students from the north on buses to register as many African American voters as possible. To that end, the students did a pretty terrible job – very few African Americans registered to vote – but their presence illuminated to their families back home and to the rest of the nation what was going on down in Mississippi. A nationwide dialogue was started which was able to propel the movement forward. And to this end the immediate effectiveness of voter registration was entirely irrelevant. For us to start a similar conversation is so much more than simply symbolic – it’s strategic, and it’s a matter of life and death.

      • MoonBatman on 04.07.2013 at 12:54 pm

        Preach, Ben Thompson. And Amen.

      • anon on 04.08.2013 at 9:07 am

        comparing the fossil fuel industry to slavery? moral calculus and actual calculus don’t quite jibe. A bit disengenuous to mix slavery and civil rights with what you consider the moral methods to fuel your car and heat your house.

  • Paula Kline on 05.12.2013 at 10:11 pm

    We are a group of alums from different schools and regions that support the heroic effort of current college students who are courageously acting on behalf of the future of the world community. We encourage you to reach out to the alumni community to strengthen your numbers and gain more support. Post your stories with us on Facebook at Alumni Supporting Fossil Fuel Divestment.


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