Swarthmore Mountain Justice is pushing Swarthmore College to divest from a list of “Sordid Sixteen” domestic fossil fuel companies. These include ExxonMobil, Chevron, Arch Coal, Halliburton, Patriot Coal, and others. For more information, visit their site.
As members of Swarthmore Mountain Justice, our ongoing research, conversations with investment professionals, and communication with institutions that already screen their investments for social responsibility have shown us that Swarthmore does not need to make a choice between socially responsible investing and financial security. However, we have encountered skepticism from various members of the campus community, the most recent instance of which was President Chopp’s Op-Ed “Swarthmore’s Enduring Commitment to Sustainability.”
We are disappointed to see that President Chopp, along with other members of the campus community, have not addressed the justification and research we have laid out on divestment and reinvestment in previous publications and personal meetings. It seems that the conversations stop at the word “divestment,” rather than critically engage with discussions about the effectiveness of divestment as a tactic, or of socially responsible alternatives.
Many of the hesitations we have heard about divestment have revolved around the idea that it is too extreme, too drastic. Divesting from these companies will create too many waves. Shareholder resolutions and moral appeals are how we do business here. If that does not work, then we should go through legislative bodies because they have the power to change regulations. With this column, we aim to clarify our understanding of divestment, and address some of these concerns.
While we appreciate President Chopp’s support of various green initiatives on campus, as we have said in a number of other publications and in our proposal to her, we do not believe those to be enough. Nowhere does President Chopp address the inconsistency of greening our buildings while pouring money into companies like ExxonMobil and Arch Coal. Chevron does not blink when we build another LEED certified building, but when we publicly withdraw our money from funding their destructive practices, they, along with politicians, students, CEOs, and activists, hear and feel the impact.
We have been told by others that we should explore the possibility of a shareholder resolution. President Chopp discusses a shareholder resolution that pushed three Fortune 500 companies to adopt equal opportunity employment practices. While we applaud this effort, we do not believe that a shareholder resolution will accomplish our goals of taking a strong stand against fossil fuel extraction. In our previously published FAQ Sheet, we wrote this of shareholder resolutions:
Shareholder resolutions are useful in cases where a company can reform its practices…but are virtually impossible when the reform undermines the economic purpose of the company in question…Companies can, and frequently do, throw out shareholder resolutions that are “related to the company’s ordinary business operations.”
The link leads to a report on a shareholder resolution proposed by Green Century Capital Management at an ExxonMobil shareholders meeting. The proposal called on ExxonMobil to prepare a report on the possible social and environmental risks of the oil sands. However, the U.S. Security and Exchange Commission allows companies to dismiss a shareholder resolution if it “deals with matters related to the company’s ordinary business operations.” Hence, ExxonMobil dismissed the resolution. This particular shareholder resolution was merely asking for a report on the effects of ExxonMobil’s practices. Now imagine how quickly a proposal to stop drilling for oil, or to even drill for oil more “safely,” would be shut down.
In her Op-Ed, President Chopp also said that divestment is too “divisive and adversarial.” We do not think that taking a principled stance against the unequivocal injustices that these companies perpetuate is divisive or adversarial. What these companies do on a daily basis is divisive and adversarial. Every day, the “Sordid Sixteen” blatantly disregards human and non-human life, violates health and safety regulations, destroys ecosystems, and poisons surrounding communities. Our support of these companies is clearly inconsistent with Swarthmore’s values of social responsibility. However, sometimes we use those values to justify talking about injustice without taking concrete action. We equate taking a strong stand with unreasonable “extremism.” Why do we consider a principled stance against climate injustice extreme, while we consider investing in companies that blow up mountains to be par for the course?
Children are dying of lung cancer in West Virginia, families cannot drink their own well water in Pennsylvania, fishermen cannot find work in Mississippi, all because of the companies we are invested in. What these companies do is atrocious, violently irresponsible, and unjust. As we teeter on the brink of climate crisis, now is the time to act boldly. Swarthmore College has a long history of political confrontation, of courageously moving in directions that others are not willing to go due to their “extremism.”
In contrast to the extreme effects that the fossil fuel industry’s practices have on the planet and its inhabitants, the effect that divestment would have on our endowment would not be extreme at all. In her Op-Ed, President Chopp repeats the Board’s policy that the Investment Committee should “manage the endowment to yield the best long-term financial results, rather than to pursue social objectives.” However, as we have demonstrated in our proposal and in previous publications, this choice between financial stability and social responsibility is a false one.*
Divesting from 16 companies would have minimal, if any, effect on the endowment, as they only make up a small percentage of our total investments. According to Swarthmore’s 2010-2011 Financial Report, the college invested 20% of its endowment in domestic stocks. The “Sordid 16” makes up only a small fraction of the possible domestic stocks we hold. There are thousands of other companies in which to invest our money, and it is a big leap to assume that divesting from these 16 would negatively impact the educational mission of the college.
The political and economic impact that divestment will have on fossil fuel companies, however, vastly outweighs the minimal risks it poses to the endowment, particularly as we continue to work with a growing national coalition of universities fighting for fossil fuel divestment. As more institutions loudly and publicly condemn these companies for their massive contributions to human suffering, environmental destruction, and climate change, the effect of those individual voices is magnified. Swarthmore is a visible, respected institution and has the responsibility to use that power to make waves. It is said that money talks and it is said that money is power. Divestment gives Swarthmore students, faculty, staff, administrators, and Board members a unique opportunity to speak truth to power in a language that power understands. If there ever was a time to use that opportunity in innovative and responsible ways, it is now.
–Hannah Jones ’12 of Swarthmore Mountain Justice
*For more in-depth discussion of how responsible investing could work at Swarthmore, we encourage all who are interested to watch the videos of our panel on divestment. For this particular issue, please listen to Dan Apfel, the Executive Director of the Responsible Endowments Coalition.