VPIRG calls out college on fossil-fuel support
Middlebury College has missed two opportunities to take a strong stand against global warming that could have set an example for other institutions of higher education around the country, according to Paul Burns, executive director of the Vermont Public Interest Research Group.
Last month, after considerable debate, the college declined to divest its fossil fuel-related endowment investments. The college is also on record supporting a proposed natural gas pipeline that would extend the Vermont Gas Systems’ pipeline from Chittenden County to Addison County.
“In choosing not to do so, I think they’ve called into question the college’s real commitment to addressing the issue of climate change,” Burns said last week, two days after a Public Service Board public hearing on the pipeline in Middlebury attracted scores of opponents.
The college debated the issue of divestiture throughout the year, seeking input from students, faculty and staff. In making the decision last month not to divest its holdings in companies and funds with fossil fuel interests, President Ron Liebowitz said the board of trustees determined that divestiture wasn’t feasible.
“Given its fiduciary responsibilities, the board cannot look past the lack of proven alternative investment models, the difficulty and material cost of withdrawing from a complex portfolio of investments, and the uncertainties and risks that divestment would create,” Liebowitz wrote in his Aug. 28 statement.
Of Middlebury’s nearly $970 million endowment fund, the college’s investment firm, Investiture, estimates that between 3 percent and 5 percent is invested in the fossil fuel sector.
Although several colleges have divested from fossil fuels, Liebowitz said given the college’s endowment, divesting even a small percentage would be difficult.
Investiture manages endowments for 13 colleges and universities with total assets of $10 billion, with the funds pooled and invested.
“It is unlikely that any of the 150 fund managers who today invest Middlebury’s endowment in their commingled funds would adopt a policy of fossil-free investing,” he said. “Whether or not they hold such investments today, investment managers who are incented to maximize their returns do not wish to limit their investment choices.”
Burns isn’t buying the argument that the college couldn’t find a way to divest its fossil fuel-related investments.
“A number of colleges and universities have divested themselves from holdings in one corporation or another or one group of corporations or another,” he said. “This has been done numerous times so this is not a technical problem or a logistical problem, it’s problem of a lack of commitment on the part of the college.”
He also said the school’s refusal to divest gives “cover to the many, many colleges and universities who may not have such a strong stated commitment to climate change.”
College spokeswoman Sarah Ray said schools that did divest probably did not have an endowment as large as the one held by Middlebury, which makes a difference.
Green Mountain College is one of several schools that have moved to divest fossil-fuel-related companies from their endowment.
The college’s board of trustees this spring made the decision to divest its endowment of all investments in the fossil fuel sector, said Robert Gould, GMC vice president of finance.
Gould said trustees voted to block any investments in the top 250 fossil fuel companies.
He said less than 2 percent of the college’s $3.1 million endowment was in fossil-fuel-related stocks and bonds. Gould said he expects the divestiture to be completely implemented this month.
However, unlike Middlebury, which has its nearly $1 billion endowment co-mingled with other schools, GMC’s endowment is handled independently.
“The board of trustees controls the investment policy statement and they designate the manager that manages those funds,” Gould said. “So the board along with the college gets to make decisions about the parameters of the investments and divestment is one of the ones they can act on.”
Gould said financial considerations were not the determining factor in making the decision to divest. “We’ll see how the market performs, but in our case it was a value-based decision not solely a financial decision,” he said.
In his August statement, Liebowitz said the college is taking additional steps to further its commitment to the environment, including developing a set of stronger environmental, social, and governance, or ESG, principles that can be applied to the college’s investment portfolio, and creating ESG guidelines to monitor investments and operations on the campus.
Lastly, he said, Middlebury will make a significant increase in the amount of its endowment directed toward investments in clean energy, green building projects, and other steps to reduce greenhouse gas emissions.
The college also has made long-standing efforts at environmental stewardship. Those include a goal of making the campus carbon neutral by 2015, investing $12 million in solar, wind and biomass energy generation on campus, and creating the country’s first environmental studies program.
The college’s support for the natural gas pipeline also upset those who argue it would only exacerbate the problem of global warming.
But Liebowitz said the benefits to the college and the greater Middlebury community should not be overlooked.
“While we continue to listen to, and understand, the arguments against the pipeline, we believe that they do not fully take into account the economic needs of the communities around us, or the lack of sufficient alternative sources of comparable energy in the near term,” Liebowitz said in a May statement supporting the project.
“Ultimately, we believe the pipeline will contribute to the economic welfare of the region and that it would be unacceptable for us to stand in the way of real and measurable progress toward goals broadly shared in our community.”
Burns said support for the pipeline is a second strike against the school’s environmental record.
“These were two missed opportunities to do the right thing,” he said. “And it doesn’t mean they can’t reverse their position, and we among many others would encourage them to reconsider on both counts.”
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