Leaning against the walls and sitting in aisles, more than 80 students crammed into a classroom on the second floor of Linsly-Chittenden last Saturday afternoon. A handful wore seemingly normal white “Y” T-shirts, but with a noticeable change: The bottom half of the shirts had been dipped in black dye, intended to make them look ominous, like they were caught in a rising tide of oil.

Saturday marked the kickoff meeting of a campaign to get the University to phase out its endowment investments in the fossil fuel industry for ethical and environmental reasons.

The campaign, called Fossil Free Yale, is part of a national movement started by environmental activist Bill McKibben that has spread to 252 college campuses, including most of the Ivy League. McKibben has said that the effort aims to push universities — whose endowments total about $400 billion — to agree to immediately freeze all new investments in the 200 fossil fuel companies with the largest oil, gas and coal reserves and phase out existing investments in those companies over the next five years. A “green” portfolio, McKibben said, should be as important to universities as an energy-efficient campus.

Though experts are split on whether divestment is the best strategy to slow climate change and only three colleges have agreed to divest so far, Fossil Free campaigns are cropping up at new colleges every day. Last week, members of Yale’s campaign presented a report to the University’s Advisory Committee on Investor Responsibility, or ACIR, an entity that was formed in 1972 to consider ethical concerns surrounding the investments that make up Yale’s $19.3 billion endowment, and the committee agreed to consider Fossil Free Yale’s proposal.

But in its 40-year history, the ACIR has only divested from two causes, University President Richard Levin said in a Thursday email. The first divestment occurred in the 1970s and involved companies related to South African apartheid, and the second took place in February 2006, when the Yale Corporation adopted the ACIR’s recommendation that the University divest from Sudanese government bonds and seven oil companies operating in Sudan.

“Our guidelines recommend using our role as a shareholder to express voice on issues where a company is engaged in causing ‘social injury,’” Levin said. “If the use of voice fails, exit in the form of divestment is the final step: taken when a company is engaged in producing ‘grave social injury’ and after all attempts at persuasion have failed. It is an expression of desperation about the futility of voice.”


The fossil fuel divestment bandwagon started rolling in earnest in fall 2012, when McKibben began a 21-city speaking tour called “Do the Math.” Campaign leaders interviewed said McKibben’s rhetoric captured their attention because it highlighted the urgency of the climate change problem and pointed toward a simple solution for college students to implement on their own campuses.

But socially responsible investing is not a new concept for Ivy League schools, several of which have had committees in place to review issues of ethical investing for more than three decades. Student-led divestment campaigns have been around for just as long, ever since students staged demonstrations in the 1970s calling for schools to divest from companies doing business with apartheid South Africa. Yale historian Gaddis Smith ’54 GRD ’61 said students maintained tents outside Woodbridge Hall to protest Yale’s South African investments at the time. Over a period of many years, the campaigns saw success: At least 155 colleges and universities — as well as numerous cities, states and pension funds — divested from South Africa.

While Unity College, Hampshire College and Sterling College — which have endowments of $13.6 million, $32 million and $1 million, respectively — have announced some form of divestment from fossil fuels, schools with larger endowments, including colleges in the Ivy League, have remained relatively quiet thus far, and Yale is no exception.

Though Fossil Free Yale was only launched last week, several of its members began compiling a report on climate change and the fossil fuel industry last fall. Two days before the kickoff event last Saturday, they presented the report to the ACIR at the committee’s annual open meeting, where members of the Yale community can bring issues or concerns to the attention of the Yale administration. Members of the ACIR said after the meeting that they will consider the report.

Law professor Jonathan Macey, who chairs the ACIR, said he was impressed by the extensive research on climate change in the presentation and added that he looks forward to working with the group.

“We’re excited to work with Yale, not against it,” said Abigail Carney ’15, a member of Fossil Free Yale.


Though the ACIR has agreed to continue discussions with Fossil Free Yale and “investigate” the possibility of divestment, the committee has not endorsed the campaign.

Macey said the ACIR, which relies on a framework outlined in a landmark book published in 1972 by three Yale professors called “The Ethical Investor,” is tasked with balancing the competing missions of ensuring Yale’s assets are invested ethically and maximizing the value of Yale’s endowment to support goals such as “making a Yale education affordable to everyone who is admitted and funding important research, scholarship and teaching here.”

The University must carefully weigh any restrictions it puts on where the endowment can be invested, said ACIR student representative Daniel Shen ’14, because limiting the endowment’s investment options can affect its performance.

But the ACIR has come under fire in recent years for its inefficiency and out-of-date methodology.

More than 500 members of the Yale community signed a 2010 petition written by the Responsible Endowment Project, a group that sought to improve Yale’s approach to socially responsible investing by reforming the ACIR. Proposed changes included more public meetings, elected membership, a full-time staff position and more transparency between the Yale Investments Office and the ACIR. The ACIR’s official response to the group was never publicized, but Macey wrote a column in the News in February 2010 in which he defended the ACIR’s current policies. Former members of the Responsible Endowment Project did not respond to requests for comment for this story.

For Fossil Free Yale, getting in touch with the ACIR has proved difficult. Alice Buckley ’15, a Fossil Free Yale member, said the group who wrote the report on climate change and divestment did not find out that they would be able to present at the annual ACIR meeting until two days before the meeting, despite trying to obtain a response from the ACIR since October. As a result, Buckley said the group had to stay up until late the night before to prepare its presentation.

The ACIR is currently working on its annual report to the Corporation Committee on Investor Responsibility, which makes recommendations on investment policy to the Yale Corporation as a whole, and Fossil Free Yale member Patrick Reed ’15 said he hopes the ACIR’s report will include a section about fossil fuel divestment.

“They indicated that they’re willing to consider it,” Reed said.


In the 1970s, “The Ethical Investor” made Yale a leader in the then-new field of socially responsible investing.

Yale was the first major university to “[abandon] the role of the passive institutional investor” and address the issue of ethical investing, according to a 1972 New York Times editorial. Still, the policy guidelines described in “The Ethical Investor” were hardly radical, the editorial said, commending Yale for not letting its investment decisions be shaped “under the gun of campus activism.”

In the decades since, Yale has decided not to divest from several causes that Yale students have brought to the administration’s attention, including the tobacco industry in the 1990s.

Macey said some Ivy League schools appear only to take divestment initiatives seriously in order to “appease students and to create the impression that initiatives are being taken when they in fact are not.”

“At Yale, we take the intellectual acuity of our students more seriously than that,” he said.

Though Yale’s approach has changed little since the 1970s, most colleges still have not joined the conversation about environmental, social and corporate governance.

Only 149 of the 831 colleges and universities that participated in the 2012 NACUBO-Commonfund Study of Endowments followed some form of ethical investing policies, said William Jarvis ’77, managing director of the Wilton, Conn. investment firm Commonfund Institute, adding that this number has remained stable over the past decade or so. These 149 schools use a strategy known as “negative screening,” which involves avoiding investing in certain securities deemed unethical, Jarvis said.

But he added that these schools only screen 60 percent of their portfolio on average.

“Forty percent of their portfolio can’t be screened,” Jarvis said, adding that the percentage is primarily caused by schools’ investments in asset classes such as private equity and hedge funds that are “not easily susceptible” to screening, as managers can refrain from disclosing the companies in which they are invested. The Yale Investments Office allocates about 35 percent of the University’s endowment toward private equity and 18 percent toward absolute return, which includes hedge funds. Chief Investment Officer David Swensen declined to comment for this article.

Regardless of investing concerns, Yale and other universities will eventually have to respond to the concerns of students and growing numbers of interested alumni. For now, at least, the fate of Fossil Free Yale lies in the ACIR’s hands.