Ryan Chiao

Student activists, faculty members and Chief Investment Officer David Swensen debated whether Yale should reevaluate its ethical standard for investment at the Faculty of Arts and Sciences meeting Thursday afternoon.

The FAS Senate’s first-ever meeting focusing on Yale’s investment practices follows a string of student protests demanding that Yale divest all of its fossil-fuel-related holdings. While the Senate typically opens its meeting to faculty members and a few administrators, the group invited student activists, Swensen and experts on ethical investing to present their cases for or against divestment. According to FAS Senate Chair John Geanakoplos, the Senate discussed whether the University should revisit the Investments Office’s manual for ethical investing: the 1972 book “The Ethical Investor.” In interviews with the News after the meeting, four senators said that many attendees expressed concern over the book’s relevance, especially since it makes little mention of the environmental issues that have recently sparked demonstrations across the globe and at Yale.

“‘The Ethical Investor’ was published in 1972,” Senator Bill Nordhaus ’63, a Nobel Prize-winning economist, told the News after speaking at the meeting in Connecticut Hall. “I think it’s always time to revisit something that’s been around that long.”

According to Geanakoplos, attendees of the meeting agreed that Yale should not invest in “bad actors” of the fossil fuel industry, such as companies that spread fake news about climate change and abuse the political process through lobbying. Still, they could not reach consensus on how broad the scope of divestment should be, Geanakoplos said. Specifically, he explained that the senators diverged on whether the University should divest in the industry as a whole. Still, Geanakoplos added that practically all attendees agreed on the need for a carbon tax.

Geanakoplos added that it is impossible to sum up where the attendees stood on the issue overall because not every senator spoke at the meeting. Still, many suggested that revisiting Yale’s investment strategy would be a good idea, the senate chair explained.

It remains unclear how the Senate will proceed following Thursday’s meeting. Geanakoplos said the group may revisit the issue in future meetings. Though the Harvard Faculty Senate passed a resolution calling for divestment earlier this month, Yale’s Senate has not yet considered such a vote. The minutes of the meeting — which will detail what each attendee said — will be posted on the Senate website in March.

“Debates like this [are] critical because it forces people to define carefully what they’re after and what the rules are that they’re following,” Geanakoplos said. “If you don’t have a meeting of the minds, it’s too easy to just say divestment is the only moral thing to do or to say that divestment is crazy.”

Swensen’s presence at the FAS Senate meeting marked one of the only times thus far when activists have been able to discuss divestment face-to-face with Yale’s most important financial leader.

“I was honored to be invited to participate [in] the FAS Senate event, which turned out to be an excellent conversation,” Swensen wrote in an email with the News. “I differ with divestment proponents about the means to transition to a greener economy, but I emphatically share their belief in the importance of that goal and its urgency. The Yale Endowment will continue to work with its external managers to incorporate the costs of carbon emissions into investment decisions, and my team and I will continue to seek the strong financial returns necessary to support Yale’s research and teaching — which together hold tremendous potential to make a critical difference in this fight.”

Prior to the meeting, Swensen told the News that he aimed to point out his perceived flaws in the divestment argument and to outline Yale’s policies for ethical investing.

In Connecticut Hall, the investment expert expressed doubts over how beneficial divestment would truly be to the environment, despite the activists’ claims. He reiterated that Yale already takes steps to consider the climate when making investment decisions.

For their part, two of the four student activists discussed why the University should completely divest from fossil fuels at the meeting. While each of the two students were allotted two minutes to present their case, Elea Hewitt ’21 told the News that both activists went over their allotted time.

During their presentation, the students argued that climate change is worrisome because it affects the most vulnerable and demanded access to more information about Yale’s current investment holdings. In addition, they expressed frustration over their long unsuccessful history of working to change endowment policies through the Advisory Committee on Investor Responsibility. In the past years, activists have used mandatory government filings to allege that Yale has substantial indirect stakes in the world’s top fuel suppliers, which are coordinated through obscure third-party investment managers. But they are unable to confirm claims about specific holdings in the endowment past the information available in the latest public forms from the Internal Revenue Services and U.S. Security Exchange Commission.

Hewitt told the News that she performed a land acknowledgement during the meeting for the native Quinnipiac people. She introduced herself in Navajo, her native language, and sought to provide an “alternate perspective and another lens” to view divestment, Hewitt said.

Earlier this week, activists told the News that they had no intentions to demonstrate during or after Thursday’s meeting. And as police officers congregated in the cold, the activists had stuck to their word.

Members of the FAS also said the meeting — which was stretched for an extra 15 minutes — was more or less cordial.

According to FAS Dean Tamar Szabó Gendler, Thursday’s debate was “Yale at its best.”

“It was a sophisticated, civilized, conversation among a group of people who felt deep principled commitment to views they expressed,” she said. “It was a respectful climate in which each person spoke and listened with care and respect to others.”

Months after the halftime protest at Yale-Harvard game drew national attention, students and faculty members across the country have been calling for divestment. In addition to the Harvard faculty vote, Columbia University announced that it would sell off its holdings in the coal and tar sands industries. Earlier this month, the Washington Post reported that Georgetown University pledged to phase out investments in publicly traded fossil fuel companies by 2025 and in private companies by 2030.

The Yale endowment has grown to over $30 billion.

Valerie Pavilonis contributed to this report.

Matt Kristoffersen | matthew.kristoffersen@yale.edu