what is divestment?
Divestment is the opposite of investing — we are calling on our University to stop investing in fossil fuels. Investing in any market is inherently political, and we’d like our endowment’s investments to reflect the values of our student body and the University mission statement. We ask that the Board of Trustees and President Roth call on the Investing Office to work with the Committee on Investor Responsibility to create a careful, feasible plan for divestment.
why fossil fules?
Climate change is an urgent issue for our generation. According to the most recent IPCC report released in October 2018, carbon dioxide emissions must be cut by 45% from 2010 levels by 2030 and emissions must be net zero by 2050 in order to cap global warming to 1.5°C. Humans have already caused about 1 degree of warming above pre-industrial levels. At this point, 1.5°C of warming is considered inevitable and 2 degrees of warming in this century is likely. But this difference of 0.5 degrees of warming is significant and could mean pushing past the tipping point for irreversible effects of climate change such as the disappearance of almost all of Earth's coral reefs and millions more people impacted to extreme heat, water scarcity, and flooding. Global temperature rise is projected to further deprive people of resources and push many into poverty. Wesleyan has a responsibility to its students and their futures to commit to divesting from fossil fuels and reinvesting in renewable energy.
Fossil fuel extraction destroys communities. Fossil fuels do not just threaten the climate; they also threaten the people in the communities where oil, coal and gas are taken out of the ground. Mountaintop removal coal mining, hydraulic fracturing ("fracking") for natural gas, and oil drilling (and pipelining) each pose incredible risk to water supplies and to the health of local residents. We have seen these effects time and again, but lobbies of powerful fossil fuel companies keep change from happening. Wesleyan has the power to back up its high community standards of social and environmental justice by ending financial support of these industries.
Fossil fuel extraction destroys communities. Fossil fuels do not just threaten the climate; they also threaten the people in the communities where oil, coal and gas are taken out of the ground. Mountaintop removal coal mining, hydraulic fracturing ("fracking") for natural gas, and oil drilling (and pipelining) each pose incredible risk to water supplies and to the health of local residents. We have seen these effects time and again, but lobbies of powerful fossil fuel companies keep change from happening. Wesleyan has the power to back up its high community standards of social and environmental justice by ending financial support of these industries.
Will this hurt the endowment?
There is no evidence that divesting is any riskier than remaining invested. In fact, according to the Institute for Energy Economics and Financial Analysis' report from July 2018, the returns for coal, oil and gas are no longer worth the risk. In January of 2019, Middlebury College agreed to divest from fossil fuels within a reasonable time frame of 15 years without significantly altering the performance of their $1 billion endowment. Other studies and known facts (listed below) prove that with proper financial analysis and time, divestment is certainly financially possible.
- Wesleyan’s endowment is $1.065 billion as of 2018. The endowment contributed almost 19% of the University's operating budget this year.
- Wesleyan is invested in Cabot Oil and Gas, ARC Resources, Range Resources, and a handful of other fossil fuel companies.
- A study by the Aperio Group concluded that divesting from fossil fuels does not negatively affect a portfolio's return.
- There are currently 1,042 institutions (approximately $8.68 trillion in value) divesting from fossil fuels and over 58,000 individuals divesting about $5.2 billion.
- Wesleyan has had two major divestment campaigns in the past – one against weapons contractors during the Iraq War in 2005, and another against apartheid in South Africa in the late '70s through the '80s.
- Wesleyan’s current Chief Investment Officer is Anne Martin, who used to work at Yale, primarily with Natural Resources and Private Equity portfolios.