Board says divestment would NOT “generate tangible and positive change” towards climate goals.
The Investment Committee of the Board of Trustees for Northwestern University has rejected Fossil Free Northwestern’s (FFN) divestment proposal which called for the University to divest its endowment from any holdings in the top 100 coal and oil and gas companies, reports The Daily Northwestern.
According to a statement the committee made on Thursday, divestment would be an empty gesture that fails to address climate concerns or impact the targeted companies’ business.
“The Investment Committee does not believe the proposed divestment would generate tangible and positive change toward FFN’s goals related to climate change. The recommended sale of Northwestern’s holdings in these firms would not have any impact on the ability of the targeted companies to conduct their businesses.”
Divesting would also not change the demand for fossil fuels, the statement said.
The decision follows a protest held by Fossil Free Northwestern in honor of Global Divestment Day. Students staged a “die-in” to criticize the University’s financial investments and called on others to speak out about the industry’s impact on indigenous communities, similar to other protests held at campuses around the world on the movement’s holiday.
The Investment Committee also noted that the proposal did not meet the divestment criteria outlined in the Statement on Investment Responsibility, published November 15, 2019. The statement outlines the threshold for consideration of divestment, listing rare exceptions that the fossil fuel industry simply does not meet.
“The Trustees believe that in most cases, divestment from the University’s Endowment is an ineffective means of exercising investment responsibility, especially in comparison to the value of encouraging the University community to engage in education, research, and debate. However, the Trustees recognize that, on very rare occasions, a continued investment may be so morally reprehensible, such as investments that directly support slavery, apartheid, or genocide, that such investment would necessitate the University’s divestment.”
This guidance mimics a stance taken by other academic institutions opting out of the divestment movement and instead choosing to focus on actionable solutions that will provide real results. Rival school Cornell University’s Faculty Senate is expected to vote on a divestment resolution next month but, similar to Northwestern, the school’s Board of Trustees established in 2016 that the fossil fuel industry fails to meet their “morally reprehensible” standard for divesting.
In a streak of commonality, Northwestern also rejected divestment a few years ago when first raised by FFN in 2015. The student activists launched a campaign in conjunction with the school’s Associated Student Government to pressure the University into eliminating holdings in coal companies but failed to win Board support. The Board of Trustees rejected the proposal but alternatively established the Advisory Committee on Investment Responsibility (ACIR) composed of students, faculty, staff and alumni, which had its first meeting in May 2017.
In early 2019, ACIR submitted the proposal that the Board ultimately ruled on this week. Though ACIR claims they reshaped the proposal to meet the Investment Responsibility guidelines, Northwestern’s Board of Trustees clearly disagree.
Though some students remain unsatisfied, the school remains consistent in its choice to opt for action instead of posturing. Thus far, Northwestern has signed the United Nations-supported Principles for Responsible Investment, incorporated “environmental, social and governance” principles into investment decisions and established several research departments devoted to environmental concerns.
Given the Board’s position, students might be wise to pursue other, more effective ways to combat climate change on campus, as third time is unlikely to be the charm.
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