In recent months, the divestment campaign in New York has faced a string crushing blows as CUNY, Columbia, Cornell, and now Vassar becomes the latest university in the state to openly reject divestment — and not for the first time either.
In an in-depth op-ed in the school’s paper, Vassar President Catherine Hill reiterated why the Trustee Investor Responsibility Committee, Campus Investor Responsibility Committee and Board of Trustees’ unanimously rejected divestment in 2013, and why the university has stood firm in their opposition years later. Hill also highlights Vassar’s dedication to a wide variety of sustainability initiatives, including a dynamic GHG reduction plan and the inclusion of over 100 interdepartmental courses and award-winning programs that focus on sustainability and climate change.
While these programs and active engagement has produced tangible results for Vassar, divestment would do nothing to address climate change and directly prevents shareholder influence. As Hill states, “Divestment will not change incentives to reduce such consumption and production.” Furthermore, divestment also risks imposing a high financial cost to the university. Hill states,
“In addition to not providing effective incentives for change, divestment could reduce the resources that colleges and universities with endowments have to spend on higher education by reducing expected returns and increasing investment risk and volatility. If returns on the endowment decline as a result of constraining investment options–which most investment professionals say will be the case–Vassar would need to cut expenditures on something to make up for the lost revenue. These expenditure reductions could fall on projects to improve the sustainable use of energy or perhaps on financial aid for lower-income students, hurting efforts to improve our access and affordability. These are real possibilities to bear in mind as we continue our discussions.” (Emphasis added)
Not only would divestment prevent the endowment from providing financial aid for low income students, funding for academic programs and even sustainability initiatives, but Hill states it is inappropriate to “use endowments for political purposes.” While duly acknowledging the various faulty arguments activists use to push divestment, Hill systematically points out why divestment falls short on the environmental, economic and political front.
As DivestmentFacts.com noted recently, Cornell University also rejected divestment this month on the grounds that fossil fuel production does not qualify as “morally reprehensible” action. In the announcement, Chairman of the Cornell Board of Trustees Robert Harrison states, “Other avenues besides divestiture may be more effective and not merely symbolic.” Similarly to Vassar, Cornell proposed engagement, research, education and other real, tangible solutions that were not merely political or social instruments.
In November, Columbia University’s Advisory Committee on Socially Responsible Investing (ACSRI) also released a report rejecting Columbia Divest for Climate Justice’s proposal to the Board of Trustees. As we noted, the report bluntly called divestment a “matter of symbolic speech” that was “too narrow a lens through which to consider Columbia University’s engagement with the climate change issue.” Like Vassar, Columbia has rejected multiple proposals from Columbia Divest beginning in 2013 but seems to have put a final moratorium on the question by restating their firm opposition again in 2015.
Vassar, Columbia, Cornell and CUNY—who also rejected fossil fuel divestment in August of 2015—have shown that divestment falls flat under the analysis of New York universities. What’s more, all of these schools have recognized the serious financial risk that divestment poses to students, faculty and the overarching academic mission by significantly lowering endowments’ returns. In fact, a study by Caltech Professor Bradford Cornell found that under a divested portfolio, Harvard, Yale, MIT, Columbia and NYU would collectively lose more than $195 million by divesting from fossil fuel related equities for each and every year moving forward.
Together, these New York schools have joined the growing ranks of divestment opposition among leading institutions across the nation who see divestment as nothing more than a risky symbolic gesture with little to gain and a lot to lose.