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February 24, 2017

Barnard Set to Vote on Empty Gesture Partial Divestment Measure

As student activists at NYU embrace new tactics in their divestment push, fellow New York City school Barnard College is preparing for a vote on a divestment measure at its March Board of Trustees meeting.

Last December, the college’s Presidential Task Force to Examine Divestment recommended selling shares in coal and oil sands as well as putting forth a “good faith effort” to divest from companies that “deny climate science,” in a presentation to the school’s Committee on Investments.  That Committee is largely expected to endorse a partial divestment recommendation when it officially presents to the Board next month. The Trustees will then take a final vote on the matter before reporting out to the full college community.

So what does Barnard’s divestment proposal look like? As Divestment Facts first reported back in December, the college’s proposed divestment plan is nothing more than an empty gesture, in line with the likes of Syracuse or Georgetown.

For starters, their comprehensive divestment report actually rejects larger divestment. The report lays out five scenarios to reduce the endowment’s exposure to fossil fuels, including a full divestment option.  The Task Force decided against this option, noting “its coverage is too broad and that it lacks the science-based differentiation and connection to Barnard’s academic mission presented in Option 4 [partial divestment].”  The report continues:

“Moreover, a blanket ban on an entire industry would raise questions of academic and scientific bias; Barnard-based research relating to fossil fuels could be questioned because it is supported by an institution that has taken a stand against the sector as a whole.”

The Task Force instead opted for the easier option of partial divestment from just some energy companies involved in coal and oil sands development. What Barnard has yet to explain, however, is how it can divest funds from its incredibly complicated investment structure.  As the report notes, “there remain serious questions about how such an approach could be put into practice. Defining climate-denying behaviors and continually monitoring the industry are key challenges.”

Barnard’s endowment is also pooled with 13 other schools and consists of nearly 900 individual funds.  The report itself admits that the fund’s manager, Investure, does not directly invest Barnard’s endowment in fossil fuel companies, but rather invests with third party managers who seek fossil fuel investments to achieve diversification and manage risk.  So, in addition to being a complicated act to carry out, it’s unclear how divestment would even be implemented.  This may explain why several of the schools that Barnard’s endowment is pooled with have already rejected divestment, including Middlebury and Dickinson College.  Differing investment preferences and requests will make it almost impossible for Investure to continue to manage these endowments in the same manner.

It also remains unclear what, if any, exposure the endowment has to coal and oil sands specifically.  As we’ve seen in the past, it’s very likely the endowment has no exposure to begin with.  Some estimates note that Barnard’s total fossil fuel investment exposure is about seven percent of its portfolio, yet many universities that have partially divested in the past turn out to have no coal or oil sand investments included in that group.

Barnard has also recommended divesting from companies that “deny climate science,” but have yet to  define what exactly that means and how that will be measured.  If this option is approved, a working group will be constructed to create these criteria and report to the Investment Committee – imposing more management fees and confusion on an already complicated process.

Barnard recently held a town hall to discuss the opinions of various stakeholders regarding the Task Force’s recommendation and the upcoming divestment decision.  Interestingly, it seems that outgoing Barnard President Debora Spar inadvertently made the case against divestment when she rightly noted that selling off fossil fuels does nothing to impact the school’s carbon footprint:

“I hate to say this because it goes against everything I’ve done, but if we really wanted to cut our own fossil fuel use we wouldn’t have international students or we wouldn’t let them go home.”

Fellow New York City colleges NYU and Columbia have rejected divestment on the grounds of its high costs and ineffectiveness.  Even at Columbia, where efforts to push coal divestment continue, leaders agree that such an effort is purely symbolic with no impact on companies themselves. Hopefully the Board will agree in the pointless nature of fossil fuel divestment and reject the Task Force’s recommendation next month.