Following similar referenda at Brown and Harvard universities, students at Yale will now formally consider divestment from fossil fuels.
From Nov. 17 to Nov. 20, the Yale College Council will hold a referendum to determine whether there is widespread support among students for urging the University to phase out investments in the fossil fuel industry. The referendum comes almost a year after students involved in Fossil Free Yale — a student group that aims to convince the University to stop investing its endowment assets in fossil fuel companies — first presented their research to the Advisory Committee on Investor Responsibility, an entity that considers and makes recommendations on ethical issues surrounding the University’s investments. On Monday, the student group submitted an 80-page revised version of their report to the committee that outlines how the University should responsibly invest in energy companies.
“Concerted action through divestment would raise awareness and create social stigmas against fossil fuel companies,” said Gabe Rissman ’16, a representative from Fossil Free Yale and a lead author of the recent report. “Divestment is consistent with [Yale’s] values.”
Before divesting, Yale should engage with companies in the fossil fuel industry to quantitatively assess their environmental impact and try to petition them to reduce their carbon emissions, Rissman said. Since Yale has the second largest university endowment in the world, shifts in the University’s investment practices could make an impact, he said.
After receiving a petition from Fossil Free Yale that garnered 1,374 signatures last spring, the YCC announced an upcoming referendum in a Nov. 3 email to the student body, requesting that interested students submit “pro” and “con” arguments about divestment before Nov. 8. As of Wednesday, a “pro” statement authored by Fossil Free Yale had been posted on the YCC website but there was no “con” statement. The YCC hopes to collect rebuttals from both sides of the issue by Nov. 11, and organizations will be allowed to campaign beginning on Nov. 12. Voting will start on Nov. 17.
YCC communications director Andrew Grass ‘16 said the YCC created a referendum process this year to empower student voice and activism on campus.
“YCC does not have a position on divestment since it is a political issue, but we are facilitating an opportunity for students to voice their opinion on the matter,” Grass said. Though Daniel Shen ’14, a student representative on the ACIR, said students have handled the issue of fossil fuel divestment well thus far, he said the referendum could potentially have an adverse effect on the relationship between undergraduates and administrators.
Yale is not the first Ivy League school to conduct a referendum on this issue.
Though 72 percent of Harvard undergraduates who voted on a similar referendum last fall voted “yes” to divestment, the divestment movement at the university failed to convince the Harvard administration. Last month, Harvard President Drew Faust wrote a letter to the Harvard community explaining that the university would not divest from the fossil fuel industry. The purpose of the endowment is to support Harvard as an educational institution rather than to make statements, she wrote.
Divestment efforts at Brown University have also hit a dead end. On Oct. 27, Brown President Christina Paxson said that “our consideration of divestiture is over.” Even if the university had divested from fossil fuels, that action would have had little direct effect on the companies in question, she said.
While Provost Benjamin Polak said he supports the environmental message of the divestment movement, he said he does not think Yale should divest from coal at this time.
“To the extent to which this stimulates serious discussion about global warming and its consequences, I’m very happy,” Polak said.
The Yale Investments Office is not required to disclose specifics about the proportion of the endowment that is invested in the fossil fuel industry. Still, the entire Yale endowment is valued at only $20.8 billion — a small number compared to the combined value of the publicly traded U.S. energy companies in the S&P 500 index, which was $1.4 trillion as of the end of 2011.
Though divestment efforts at other top universities have failed to achieve their ultimate goal, Rissman noted that student efforts have not been futile. Harvard added the position of vice-president of sustainable investing shortly after the referendum.
Yale’s approach to responsible investing is articulated in the 1972 book, The Ethical Investor. Following those guidelines, the ACIR focuses on the concept of “grave social injury” as defined in The Ethical Investor when evaluating investments, according to Jonathan Macey, a professor at Yale Law School who serves as chair of the ACIR. Divestment is only considered as a last resort and only if the committee determines that divestment would have a positive impact.
In the 40-year history of the ACIR, Yale has only divested twice: from companies related to South African apartheid in the 1970s, and from Sudanese government bonds and seven oil companies operating in Sudan in 2006.
More than 250 U.S. colleges currently have student-led fossil fuel divestment campaigns.