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Op-ed: Lessons Learned from Vassar’s Divestment Decision

Jason Angell '00

After a five-year campaign organized across multiple classes of student environmental leaders, for the first time, the demand to divest Vassar’s endowment from fossil fuels reached the board’s Trustee Investor Responsibility Committee (TIRC) for formal consideration. After one day of deliberations at the November Board of Trustees meeting, TIRC voted unanimously against the recommendation to divest.

While this decision was personally disappointing to me as an alumnae/i representative of the Campus Investor Responsibility Committee (CIRC) who is very much in favor of divestment from fossil fuels, in follow-up discussions between CIRC members and President Bradley, we all agreed that this decision might provide an opportunity to push forward other impactful climate actions by Vassar in the near future. My greatest hope is that it does.

But before the board’s decision fades from view, I wanted to share my reflections on what I’ve learned from this process, our meeting with TIRC, and the nature of the barriers we face to taking transformative action to address the root causes of climate change.

The positions people take on issues like divestment—which combine questions of financial gain and social responsibility—are based largely on deeply held foundational beliefs and cultural norms. The foundational belief in question in the divestment debate is also the primary barrier to progress on climate change: the intractable conflict between protecting and maximizing short-term financial gains and forgoing some gains in the short term to promote long-term sustainability.

As the Board of Trustees wrote in a letter explaining its decision to CIRC,

The idea of using Vassar’s endowment as an instrument to express social views is of great concern to both TIRC and the Board of Trustees. The board believes that the endowment of the college exists solely to support the mission of the college and that it is the fiduciary duty of the board, derived from our founding documents, governance, and the state law, to preserve the endowment solely for achieving the best risk-adjusted return. This enables the college’s investment managers to invest in the complete opportunity set of available investments allowed by the college’s investment policy and the law, while permitting the college to use the earnings from the endowment to fulfill the college’s mission.

I am not saying that TIRC’s decision is neither reasonable nor rational; in fact, it represents the dominant thinking of the day for most elite institutions. The logic goes that Vassar’s social views should be expressed by the institutional actions it takes to achieve its mission, not by how it invests its endowment. The endowment is simply a means to an end of fulfilling the college’s mission and any restrictions on investment decisions could negatively impact that goal.

I think most alums would agree that we all care about supporting Vassar’s mission. I have been particularly proud over the last few years as Vassar has become a national leader in attracting and graduating low-income students by becoming need-blind, doubling its financial aid budget. Maximizing endowment returns plays an important role in supporting this type of progress.

The fossil fuel divestment debate is not valuable because proponents believe it’s the most impactful way we can fight climate change. As most people know, there is no silver bullet to addressing climate change; it will take a multitude of actions taken at the individual, community, national, and international levels. The value of the divestment movement is that it forces institutions, and the powerful individuals who sit on their boards, to confront the right question: is where we choose to put our money an extension of the values of our institution?

As the board’s decision notes, it sees its core responsibility as preserving the endowment solely for achieving the “best risk-adjusted return” by enabling the “college’s investment managers to invest in the complete opportunity set of available investments.” But we must distinguish between short- and long-term risks.

I have been proud as Vassar has committed to public actions to fight climate change by

-       Becoming a signatory of President Obama’s American Campuses Act on Climate Pledge in 2015, which expressed support for the Paris Climate Accord by calling upon world leaders to “reach an agreement to secure a transition to a low-carbon future”;

-       Approving a Climate Action Plan in 2016 to become “carbon neutral” by 2030; and

-       Joining over 20 other university and college presidents in 2017 calling for a national carbon price because it “won’t create new dependencies on profits from carbon-based energy.”

All of these positions would make remaining invested in fossil fuels incredibly risky in the long run. Can any of us—individually or institutionally—claim integrity if we claim to support efforts to fight climate change in the long term while we benefit from fossil fuel profitability in the short term?

We live in an America where maximum short-term gains rule the day. Higher education institutions, often led by board members who have been highly successful in the finance and investment field, compete against each other much like financial investment firms and celebrate top honors for the highest-ranking endowment returns. We are deeply resistant to allowing non-economic variables related to social well-being into the simplistic black box of economic decision-making; it’s hard to restrict the “opportunity set of available investments” when there is so much money to be made.

This ethos invades all aspects of our modern lives. It’s in the food we eat, which is processed for shelf life and profitability instead of healthfulness. It’s in the communities we have built, which are soul-deadening in their efficient, box-cutter constructions that homogenize the landscape. It’s in the growing dominance of Amazon.com, which with every click of a purchase is shutting down a small business on Main Street. It’s at the heart of our addiction to convenience and cheapness, valuing what we can get right now over what may be lost in the future. If it does not change, it will prove to be extinctionist thinking.

We’re in real trouble. America’s growing ranks of the economically insecure are too stressed and busy keeping their heads above water to give priority to climate action, middle-class Americans don’t want to rock the boat away from their nearly-there upper-class future, and most wealthy Americans, while making up the disproportionate number of self-identified environmentalists, won’t allow non-economic considerations like the negative externalities of capitalism to enter the sacrosanct space of their investment portfolios.

Moving beyond this paradigm will not be easy, but I am certain it is the primary challenge we face. I truly believe President Bradley when she says that this decision is an opportunity to push forward other impactful climate actions. I truly believe TIRC Chair Christianna Wood ’81 when she calls for immediate and decisive climate action.

Let us turn the page of the board’s divestment decision by congratulating the VC Divest student leaders for their perseverance in raising this issue and exemplifying Vassar’s commitment to “engaged citizenship.” And as we discuss how Vassar can lead on climate action, let’s begin by asking if we are willing to forgo any short-term gains in order to keep the abundance that we all have.

-Jason Angell ’00, Alumnae/i Representative, Campus Investor Responsibility Committee