Wellesley's Board of Trustees has carefully considered proposals of fossil fuel divestment.
Over the last year, there has been much discussion on our campus—and on other campuses around the country—about fossil fuel divestment (withdrawing endowment investments in fossil fuel companies) as a way to help curb the effects of climate change around the world.
This past fall, the student group Fossil Free Wellesley (FFW) formally requested that the Wellesley College Board of Trustees freeze any new directly held investments in fossil fuels and within two years divest all direct holdings in the 200 largest publicly traded fossil fuel companies. FFW further requested that this divestment be reviewed (for the next five years) by a committee of students, faculty, administrators, and trustees to evaluate the impact on investment performance and returns. Finally, FFW asked that at the end of the five-year period, the College be fully divested from all fossil fuel holdings, directly and indirectly held.
In response to the FFW request, the Board of Trustees appointed a working group of trustees, faculty, and administrators (including myself), and that group met with and heard from FFW students throughout the fall. In the course of these discussions, the working group considered FFW’s specific request and its impact on endowment earnings and on the yearly operating budget. The working group also considered what we as citizens—and what we as an institution of higher learning—can and should do to address climate change and to support efforts of sustainability and other environmentally responsible actions. With the encouragement of FFW, discussions occurred on campus—most recently with the Sustainable Choices panel and a series of sustainability events during the first week of second semester.
The Board of Trustees has decided that divestment is not a good option for Wellesley College. The Board, and I, do not support the idea of using the College’s endowment as a lever for social change and determined that such an action would conflict with the purpose of the endowment. This decision was based on the conclusions of the working group, research on the consequences of divestment, and a discussion with the Board of Trustees.
In examining the effect of divestment on Wellesley’s endowment, analysis indicated that the impact over a ten-year period would be significantly adverse and that such a policy would seriously compromise our ability to serve our educational mission. (For more specific details on the impact of divestment on the endowment, read the Divestment Fact Sheet.) The result of that examination was conclusive: the cost to Wellesley would be high and the economic impact on fossil fuels companies inconsequential.
The working group and the Board of Trustees fully agreed with FFW that climate change is a significant issue—one that must be addressed if our world is to remain a viable habitat for future generations. In the time since FFW brought their requests to the Board, the conversations have never questioned the causes or effects of climate change, nor has there been any doubt about the social and moral imperative to address this crisis. As a scientist, I recognize that climate change is a formidable problem—one of the most serious problems in the history of humankind—and one that demands an immediate and broadly multifaceted worldwide response.
The imperative to act responsibly in support of sustainability is too great for Wellesley not to act. Therefore, we are undertaking the following four specific actions:
- We will continue and even increase our efforts to educate students and provide a supportive environment for inspired and informed activism. Ultimately, it is this commitment that will make the most difference, as our students have a strong sense of social responsibility and are prepared to exercise their leadership skills and education in service of creating a better future.
- The Campus Renewal program (W2025), which is composed of major renovation projects that will upgrade more than 16 percent of the College’s physical facilities over the next 7-10 years, offers an unprecedented opportunity to curb the energy usage of the College for the next 25 to 100 years. The choices the College makes in the program overall, and in each of the individual projects, regarding sustainability, energy usage, and other aspects of operations will have a significant and long-lasting effect on the College’s environment impact and carbon footprint, as well as its sustainability overall. The Advisory Committee on Environmental Sustainability, a committee of Academic Council created this year, has begun studying what environmental and energy standards other schools have committed to when they build new buildings or renovate existing ones, and is developing a new, likely more stringent, proposal for Wellesley this semester. This recommendation would include a policy covering investments in renewable energy as well as ways to reduce future energy usage, and is expected to be complete at the end of the spring semester, in time to be part of the vast majority of all Campus Renewal projects.
- To further speed progress toward making the rest of the campus more sustainable, particularly reducing energy usage and greenhouse gas emissions, Wellesley will evaluate implementing a Green Revolving Fund by the end of this semester, or if not feasible, will commit to establishing a similar mechanism to fund reductions in campus energy usage. (Green Revolving Funds facilitate investment in capital projects that lower energy usage and costs by funding those investments based on an initial seed fund that is replenished by future energy savings.) The College will make it a priority to fund and implement all such projects that have a payback of seven years or better (that is, the cost of the project can be covered by seven years of resulting energy savings).
- While Wellesley has practiced socially responsible investing for years—and has a trustee Proxy Voting Subcommittee that includes the participation of faculty and students—a new working group will be charged to create a guide to detail and formalize standards and practices of our socially responsible investing going forward. Members of the community will be appointed to this working group later in the spring following consultation with faculty and students.
The request from the FFW students has sparked important conversations on campus, and I am grateful that a core group of activists—with the support of their peers and alumnae—has brought this important issue to the forefront. There is no question that our community has benefitted from the recent discussions about climate change and also has a better understanding of the issues of inequality that result from the effects of climate change. Thoughtful activism can be a powerful force for change. This was one of the precepts held by our founder, Henry Durant, and I applaud our students for having taken on this very timely issue.
I want to thank the FFW students for their active engagement with the Board over the past few months. I am grateful for their concern and continued attention to this issue and their dedication to educating the community. I also want to thank those trustees, faculty, and staff who were so generous with their time in considering this important issue and working with Fossil Free Wellesley.
H. Kim Bottomly
March 7, 2014