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ACSRI Proposes Creation of Broad Climate Plan

Includes divestment from companies seeking new fossil fuels

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The BU Board of Trustees was presented on Friday with a broad-based proposal to expand the University’s sustainability initiatives, as well as a recommendation to divest from companies that continue to explore for new fossil fuel reserves or that extract coal and tar sands. The proposal, put forth by the University’s Advisory Committee on Socially Responsible Investing (ACSRI), also recommends that the University hire endowment investment managers with expertise in renewable energy sources and incorporate a comprehensive Climate Action Plan (CAP) in BU’s Strategic Plan. Following the established practice, the proposal has been referred to the trustees’ Executive Committee for discussion, with further deliberation by the full Board at the next trustees meeting in the fall.

Trustee Rick Reidy (Questrom’82), ACSRI chair, says universities have a responsibility to take action that addresses climate change. “Universities should play a significant role in addressing climate change where divestment may be part of it, but education and research are where we can make our greatest contribution,” says Reidy. “Universities should also be prepared to walk the talk and become as green as we can be while fulfilling our educational and research mission. If we choose to divest, it is not the end of this discussion or of the University’s actions on climate change in the future.”

ACSRI member Steve Brady, a School of Medicine associate professor of psychiatry and chair of the Faculty Council, says the committee’s study, which included presentations from several experts and a close look at the actions of other universities, ultimately persuaded them to expand their proposal beyond its initial focus on divestment to include investment, education, research, and operations. Brady says that the ACSRI believes that the University’s current sustainability efforts “are terrific,” and that notes from a recent committee meeting “applaud the University’s commitment to reduce its carbon emissions by 35 percent in an additional four million square feet of buildings by 2020, and reduce its energy consumption between 2012 and 2017 by 10 percent.”

Brady points out, for example, that BU supports many researchers doing cutting-edge climate studies. “We would like to see the University create an environment where those researchers can be as successful as possible,” he says. “We should also consider that the city of Boston has a 2050 climate plan, and we should make sure that we find ways to link to our community and the city. That means encouraging things like taking public transportation, creating a biking program for faculty, and being mindful of the effects of travel, especially travel by air. It also means designing buildings for the future. We know that the seas are rising. That means building buildings that don’t have mechanicals in the basement.”

“Another thing,” he says, “is we would like the University to support investment advisors with expertise in clean energy. These investment opportunities are expanding, and the goal is for the endowment to invest in those opportunities that meet the University’s return objectives.”

He says that the ACSRI proposed divestment from companies exploring for new sources of fossil fuel because “we think the world has enough known fossil-fuel reserves, and if we continue to look for new reserves, that is problematic.”

The committee’s recommendations also call for the development of a Climate Action Plan outlining strategies for increasing the University’s green energy supply, reducing its power needs, teaching students to understand the ramifications of, and adaptation strategies for, climate change, and expanding cross-disciplinary research related to climate change. And the committee recommends teaching all community members that one’s individual choices have a profound impact on carbon footprints, and preparing for the effects of climate change on the University’s physical plant.

Benjamin Thompson (GRS’18), one of three students and the sole graduate student on the committee, says he is most proud of the ACSRI’s recommendation concerning fossil fuel exploration. “There is no doubt that humans are driving climate change,” says Thompson, “but there is immense uncertainty as to how to best create the social change to combat climate change. Even in hindsight 50 years from now, we will not really know what measures were most effective. And so because the world has been so slow to respond to climate change, I don’t believe we can afford to invest all of our efforts into just one response. We must use every tool in our wheelhouse, be it divestment, investment, research, or education.”

The ACSRI proposal notes: “Recognizing that the operating budget is a zero-sum proposition and that preservation of intergenerational equity for endowment distributions is a fiduciary responsibility for the University’s trustees. The entire community will bear the burden of the compensating operating budget pressures caused by shifting our energy usage from fossil fuels to green alternatives. Hopefully, the savings generated by the University’s efforts to reduce overall energy demand should partially offset this burden.”

Read the ACSRI recommendations here.

In developing its recommendations, the committee sponsored four speaker forums and a panel discussion, heard presentations from two faculty groups and one student group as well as from the director of sustainability@BU and the senior vice president for operations, and received feedback that summarized student perspectives shared during a listening session.

Reidy says the Executive Committee’s consideration of the ACSRI proposal will be guided by principles, previously established by the Board, which include whether divestiture would risk undermining the University’s commitment to freedom of inquiry and whether the degree of social harm caused by the firms in the asset class is clearly unacceptable. Those principles state that:

  1. When the Board, acting on behalf of the University, is asked to prohibit investments of the endowment in a given industry or in companies doing business with a particular government, it is being asked to express an opinion or take action on an external social or political issue that, in the overwhelming majority of cases, is not directly related to the operations of the University.
  2. A fundamental goal of Boston University is to create an environment in which an academic community can productively consider, discuss, and debate a variety of viewpoints on social and political issues and that encourages freedom of inquiry. Such conditions allow scholars to pursue knowledge according to standards of evidence and logic without the encumbrance of an institutional position that may dampen discussion of alternative views. When the University, as an entity, adopts a single viewpoint or takes action relating to divestment, it risks undermining that goal. Therefore, non-investment or divestment actions based on social or political principles should be very rare and occur in only the clearest of circumstances, and should be judged to withstand the test of time in terms of how the wisdom of the University’s decision will be judged by future generations.
  3. Such circumstances exist only when (i) the degree of social harm caused by the actions of the firms in the asset class is clearly unacceptable; and (ii) any potential negative consequences of the decision (including the risk of censorship of competing views within the University or the risk that the wisdom of the decision will fail to withstand the test of time) are clearly outweighed by the importance of taking the divestment action in order to lessen or mitigate the social harm.

The ACSRI is made up of three trustees, three faculty members, and one graduate and two undergraduate students.

9 Comments
Art Jahnke

Art Jahnke can be reached at jahnke@bu.edu.

9 Comments on ACSRI Proposes Creation of Broad Climate Plan

  • Steve on 04.20.2016 at 8:11 am

    China is the biggest polluter using dirty coal and making their cities literally unbreathable. If you want to make a real difference then divest from companies that have manufacturing facilities in China.

  • Rachel Eckles on 04.20.2016 at 8:22 am

    I think something overlooked in this article is that the committee is recommending only divestment of BU’s direct investments. Yet the majority of our endowment is made up of indirect investments (commingled funds). So fossil fuels are a bad investment and yet we should still keep investing in them? Doesn’t sound very socially responsible to me.

    • Itai Vardi on 04.20.2016 at 8:48 am

      And in fact the university has no direct investments in fossil fuel companies, which make this recommendation somewhat empty.

  • Itai Vardi on 04.20.2016 at 9:04 am

    Great that ACSRI has made a recommendation for a certain level of divestment. But people should also read the fine print in the document the committee produced and be cognizant of its implications:

    1. The divestment recommendation is for new exploration in fossil fuels *OR* coal and tar sands. Why do we need to choose between these evils? Especially since it is now clear that the methane emissions from natural gas are in fact worse for global warming than carbon emissions. Not to mention the extraordinary harm done by fracking.

    2. The recommendation for divestment is followed by this line: [Divestment will be] “undertaken in concert with the requirement to meet the university’s fiduciary duties to its endowment.” This clause provides an easy escape route for those not interested in divestment. Unfortunately, it’s a narrow and conservative view on fiduciary duty, which overlooks the Trustees’ OTHER responsibilities, for instance to the present and future welfare of BU’s students and the environment in which they live.

  • Clint Cavanaugh on 04.20.2016 at 9:17 am

    I know this is small potatoes, but could we start by instituting less frigid A.C. guidelines? We are wasting so much energy by keeping our buildings cold enough to refrigerate meat (okay, eggs) and having many, many, many employees wear sweaters and jackets all summer long. It’s just silly! Great job, I have to add, on the automatic lighting in the stairwells around campus! Baby steps…

    • Amen! on 05.10.2016 at 6:16 pm

      Thank you so much Clint! I constantly have to contact “classrooms” (which generates a trail of “tickets” to daunt the bravest of the brave) because my students sneeze, cough, keep their hoods on for the entire lecture, and on occasion, have to leave the room to be sick.
      One went back to her dorm and returned with a fur coat (faux fur of course, Sustainability at BU!); another HAD TO DROP MY CLASS because the temperature in the room would set off her asthma.

      And now for my very own small potatoes: Irrigation! I read a few years ago that Harvard switched from manicured lawns to 19th-century English garden, no need for maintenance: they saved hundreds of thousand dollars, not to mention MOTHER NATURE. Whereas in here, the irrigation goes off at random times, soaks the passersby thoroughly, and is regulated to fiercely flood all surrounding sidewalks. The sidewalks are covered under an inch of running water, everywhere, obstructing every passage so that I have to completely re-route my entire day, or get and stay wet (and turn to an ice sculpture in my office).
      Thanks very much for your attention.

  • CY on 04.20.2016 at 7:23 pm

    I think the ACSRI recommendations are a HUGE step in the right direction! I am crossing my fingers that the Board of Trustees will make the right decision and accept the recommendations!

  • Jim Recht, MD on 04.20.2016 at 7:52 pm

    Professor Vardi’s observations are significant. The “fine print” here, in particular the qualifier cited by Vardi (“recommendations…must be undertaken in concert with the requirement to meet the University’s fiduciary duties to its endowment”), could easily be used to undermine the intent of the committee. Here’s hoping that Dr. Brady, Ben Thompson and so many other forward-thinking BU divestment supporters will succeed in applying pressure and shining a light, when and where needed!

  • Brad Zehr on 04.23.2016 at 1:11 pm

    I applaud the ACSRI for its recommendations to the BU Board, in particular its proposal that BU recruit endowment investment managers with expertise in the renewable energy market. My impression from attending the ACSRI forum on 2/23/16 is that divestment from fossil fuel companies is simply too financially complex because the vast majority of the endowment is invested in “co-mingled funds.” However, future investment decisions are controllable, and by hiring financial advisers with expertise in sustainability and “green investing”, BU can move toward a greener portfolio.

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