Swimming in a Pool of Oil
Over the past several years, student environmental activists at campuses across the country have developed campaigns to pressure their university administrations to stop investing in companies that profit from the extraction of fossil fuel. For the past four years, students at the New School have been a part of that movement.
In recent months, the issue has come to a head as institutional student groups, like the University Student Senate (USS), join the call for environmental activism.
“I believe that divestment aligns with The New School’s core principles,” said Laura Merli, a student representative of The New School Sustainability Coalition. “This is an area where we have an opportunity to be a leader and show other universities that divestment is possible.”
In 2011, the Advisory Committee on Investor Responsibility (ACIR), which is made up of several students, faculty members and trustees, and meant to advise investment decisions at the university, published the Investor Action Plan for Sustainability: Fostering Equity and Opportunity Across Generations.
USS co-chairs Benjamin Silverman, Jens Astrup and Shannon Swimm, along with Sustainability Coalition representative Laura Merli, met with President David Van Zandt on October 10 to discuss their divestment proposal. They felt that he was more attentive than the administrations at many other universities.
“I think it’s an important issue for The New School,” Van Zandt told the Free Press, “in part because of our commitment to sustainability and all of the things we’ve done internally to achieve that.”
For The New School to fully adopt divestment principles, the Board of Trustees will have to vote in favor of divestment.
Last month, the Advisory Committee on Investor Responsibility renewed its call for divestment while revising their Investor Action Plan for Sustainability.
“We want the Board of Trustees to know that we are not going to give up on this,” Izza Aftub, a student ACIR representative, said. “Even if this does not happen now, it will happen.”
Acceptance of the plan would require the Board of Trustees to first reanalyze their investments and determine how much of our $215 to $217 million endowment is actually invested in such companies. “Right now that’s what we’re trying to figure out,” Van Zandt said.
The ACIR was unable to release information regarding exactly which companies The New School’s mutual funds are invested.
And though Van Zandt said he was open to the idea of considering divestment, he also expressed concerns that it could impact the university’s finances, and ultimately, the size of its endowment.
“When you reduce the range of things you can invest in, it’s going to hurt your return,” he said. “We’re trying to come up with some estimate of what that actually would be. It then becomes a decision of what we would do to make up for the amount of money lost.”
While some proponents of divestment have encouraged universities to move their funds to invest in cleaner sources of energy, Terra Lawson-Remer, chair of the ACIR, informed the Free Press that relying on sustainable alternatives might not be reliable. “Alternative energy sources are risky because there is a lot of uncertainty around their dependability,” she said.
Some proponents of divestment, however, argue that investment in fossil fuels is equally uncertain.
Willi Semmler, an economics professor at The New School for Social Research, told the Free Press that the dependability of fossil fuel energy decreases when the cost of exploration and environmental damages is accounted for. These costs cause an increase in the price of fossil fuels. Many companies, however, do not account for these costs and consider unburned fossil fuels as assets. “From an economic stance, these cross calculations are incorrect.”
According to the Carbon Tracker Initiative, an organization dedicated to researching carbon emissions from a number of companies, natural disasters triggered by climate change have caused some politicians to reconsider the amount of fossil fuels that can be burned.
Semmler explained that when these potential regulations are taken into account, unburned fossil fuels become liabilities to both the companies and their investors.
Environmental student activists have already successfully lobbied some of their administrations to divest, including well-known universities like Hampshire College and San Francisco State University.
Not all efforts to divest, however, have been successful. And university students seem to be fighting an uphill battle.
On October 3, Harvard President Drew Faust released a letter to the Harvard community. “The funds in the endowment have been given to us by generous benefactors over many years to advance academic aims, not to serve other purposes, however worthy,” Faust said in the letter. “We maintain a strong presumption against divesting investment assets for reasons unrelated to the endowment’s financial strength and its ability to advance our academic goals.”
Brown University also refused to divest due to the profitability and overall economic impact of the fossil fuel industry.
A letter released on October 27 to the Brown community by President Christina Paxson of Brown University acknowledged the social harm associated with the burning of fossil fuels, yet at the same time, decided against divestment.
“The existence of social harm is a necessary but not sufficient rationale for Brown to divest,” Paxson said. “I believe that although social harm is clear, this harm is moderated by the fact that coal is currently necessary for the functioning of the global economy.”
But some, like Terra Lawson-Remer, Chair of the New School ACIR, say the economic benefit does not justify the environmental impact. “Who cares if we are getting a one percent increase on our returns if we’re ruining the planet,” she said.
Richard McGahey, Director of Environmental Policy and Sustainability at The New School, told the Free Press that fossil fuel divestment and financial success is compatible. “The trustees have a fiduciary obligation to invest the endowment wisely,” he said.
“I think that a non-fossil fuel portfolio and investment strategy can be devised that still meets financial goals, but that takes some technical analysis and consideration of options,” McGahey said.
While the decision has not yet been made at The New School, the calls for divestment have grown increasingly visible across the university. The USS has hung posters around the campus, and on October 18, made divestment the focus of Campus Sustainability Day.
The ACIR will present its action plan to the Board of Trustees in February 2014, at which time the final decision will be made.
In the meantime, the university community awaits the decision.
“I think divestment will win here,” USS Co-Chair, Benjamin Silverman said during the Campus Sustainability Day Event. “The New School isn’t perfect, the Board of Trustees aren’t perfect. They are far more helpful than most others and I’m happy to be working with them as much as we can.”
While optimistic, student activists are also aware that the process will not be easy.
“It still takes pressure and work and it takes struggle, and there are many battles to be fought,”said Silverman.
With reporting by: Francia Sandoval and Dilara O’Neil
NiQyira is currently an Arts in Context major at the New School. She joined The Free Press in Fall 2013 and enjoys writing for all four of its sections. NiQyira aims to pursue a career in photo journalism, traveling while using photography and writing to explore other cultures. She would like to write for a magazine like National Geographic one day. NiQyira's hobbies include being the sweatiest girl in the gym, wandering the city with a camera, watching cartoons, writing and eating too much peanut butter.
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