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Monday, Mar 4, 2024

A New Wave in the Divestment Movement

In late September, the Rockefeller Brothers Fund announced its plan to divest its money from investments in fossil fuels. The fund, with nearly $860 million in assets, announced that it would divest roughly seven percent of its funds currently invested in fossil fuels. 

The Rockefeller Brothers Fund, established by Rockefeller heirs in 1940, is a smaller organization in assets than the better-known Rockefeller Foundation. The fund’s announcement of divestment, a small amount of money when compared to the vast amount of capital in the fossil fuel industry, attracted great attention.

The announcement, part of a broader initiative, was timed to follow several large environmental marches around the world, and to precede the United Nations climate change summit in New York City.

At the College, the announcement triggered discussion and reinvigorated the divestment movement that had started. The move by the Rockefeller Brothers Fund is of particular interest to the College because it is divesting its investment from Investure, the money manager the college entrusted its endowment to. Students from two campus organizations, the Sunday Night Group and Socially Responsible Investment Club, gathered last Sunday to discuss their plans to carry the current momentum to campus and push for change.

Greta Neubauer ’14.5, a leader of the divestment movement at the College, stressed the importance of the movement. “I think divestment is important is because of the power we have as an institution to shift the narrative around the fossil fuel industry... I believe Middlebury has responsibility to use its social capital and its real capital to make a statement that is in alignment with its mission by divesting from fossil fuels,” she said.

She added, “The movement is saying that we need to take this part of our orbit into consideration. What happens on campus is not all that happens. Our institution actually has an impact in other places and we cannot be actively funding the extraction of fossil fuels.”

The College’s one billion dollar endowment is currently in a collective fund that has around three percent of its money in the fossil fuel industry.

Talking about her motivation to join the movement, Taylor Cook ’18 said that she was shocked by the fact that the College, a symbol of sustainable environmental practice, is invested in fossil fuels. She wants to join the movement to push the College to a higher standard. 

Sophie Vaughan ’17 talked about her motivation to join the movement. She said, “If we don’t help push for a sustainable planet, who is? Because if you look historically, a lot of movements have been powered by students.”

The primary obstacle for divestment comes from the outstanding performance of Investure and its close business relationship with the College. 

Neubauer commented on this complication in the process. “The board doesn’t want to leave Investure. Investure has done really well for the College, especially in the recession, and since the college has worked with them, they have gotten really good returns for the College, done better than peer groups, peer financial managers... We think that there is a way the College can divest that won’t hurt the endowment,” she said. 

Neubauer talked about the long-term risk of fossil fuel investment in the context of the worsening climate crisis and emerging renewable energy prospects. She said that it seems that either Investure has to change or the College has to leave for the divestment to happen. Good investment return is not good enough, she claimed.

Last month, Governor of Vermont Peter Shumlin, responded to questions regarding the divestment of Vermont’s pension fund from fossil fuels during the governor’s debate. “It is not the sharpest tool in the drawer,” he said. He stressed his effort spent on the renewable energy implementation in the state.

“Peter Shumlin, as governor of Vermont, has a lot of tools in his toolbox. And I would like him to use some of them,” Jeannie Bartlett ’15 said in response to the governor’s opinion. Neubauer agrees that the state should use some of its tools more effectively than it does now. 

Though the record of success of the movement is mixed, the momentum of the movement seems growing. Harvard and Yale both declined to divest. Stanford agreed to divest, but only from coal, while still invested in fossil fuels. However, in recent years, a huge number of individuals and organizations have pledged to sell assets tied to fossil fuel companies. The amount pledged by individuals and 180 institutions, including pension funds and local governments, is worth more than $50 billion. 

“We want the College to divest in conjunction with carbon neutrality. We would love to see that the College divests by 2016, so that we are really, honestly and truly carbon neutral in all of our operations. And we also think that it would be really powerful for [President of the College Ronald D. Liebowitz] to divest before he leaves the school. He is going to leave a legacy, and to leave a legacy of not divesting from fossil fuels when that is the direction of history is not the one that we think he should choose. So we are really hopeful that Liebowitz, who is committed to making Middlebury a climate leader, makes that choice,” Neubauer said.