On January 27th, Swarthmore Mountain Justice revealed the considerable conflicts of interest held on the part of three Board members, Rhonda Cohen ’76, Samuel Hayes III ’57, and Harold Kalkstein ’78. As of June 30, 2015, firms associated with these three Board members held more than $25 billion worth of investments in energy companies, severely compromising the integrity of any board decisions on divestment. In order to ensure that future discussions on divestment are transparent and in good faith, Mountain Justice asked that these Board members recuse themselves from all future discussions of divestment and notify us of their decision by the end of the Board meeting on February 20th. The failure of these board members to recuse themselves leaves us no choice but to take further escalated action.
The Board’s conflict of interest policy is clear: “Manager[s] having a duality or possible financial conflict of interest on any matter should not use his or her personal influence in the matter and, if a vote were to be taken, should not vote thereon nor be counted even in determining the quorum for the meeting.” Investments Committee member Harold Kalkstein founded an energy practice that recently recommended Arctic drilling and repealing the ban on crude oil exports; Vice Chair Rhonda Cohen manages a trust with nearly $1 billion in fossil fuel assets, and Board Member Emeritus Samuel Hayes II served 20 years on the boards of the Eaton Vance family of mutual funds, whose second-largest holding is its $845 million dollar stake in ExxonMobil. Eaton Vance has $2.6 billion invested in dirty energy, or eight percent of its $32.7 billion total holdings. The amount Eaton Vance has invested in energy is almost equal to the entirety of Swarthmore’s endowment. Yet despite their egregious conflicts of interest, these managers are allowed to vote on fossil fuel divestment, one of the most urgent issues of our generation.
It is necessary and urgent that Swarthmore take a leading role in the fight against climate change. We hold immense clout in the academic, intellectual and moral spheres of the US, and we must add our voice to the chorus calling for a just and sustainable future. Our Board of Managers continues to ignore community mandates from students, faculty, alumni and now honorary degree recipients including Noam Chomsky, John Braxton, Arlie Hochschild, Lorene Cary, and Lotte Bailyn calling on the college to step out of the moral shadows and embrace the values we purport to uphold. Divestment is a powerful tool in the fight against the rogue fossil fuel industry. It helped bring down the apartheid regime in South Africa, and now, with the help of peer institutions, governments, pension funds and philanthropic organizations, it can serve to socially stigmatize and delegitimize an industry that causes millions of deaths each year and is literally incompatible with the future of every human on this earth. Despite the moral imperative we have to stop what may prove the worst crisis our generation will face, one that will disproportionately harm the poor, women, racial minorities and the Global South, our college continues to stay on the wrong side of history.
Though the carbon tax initiative pushed forward by faculty and adopted by the Board this past week is an important step in accounting for our own personal consumption of fossil fuels, it does nothing to reshape the international economic and political forces that maintain the fossil fuel industry’s stranglehold on meaningful policy to combat global climate change. With the ink of the Paris Climate agreement still fresh on the page, setting the ambitious goal of reducing fossil fuel consumption enough to keep warming below 1.5 degrees celsius, the stakes could not be higher for stigmatizing the fossil fuel industry. Even mainstream financial institutions like Morgan Stanley have accepted that fossil fuel investments pose a risk to future financial solvency. Just this past month, the entire city of Copenhagen proposed to divest its 6.9bn fund from all holdings in coal, oil and gas. Divestment commitments have passed the $3.4 trillion mark with over 500 institutions as of COP 21. The world is taking notice of the divestment movement, and this may very well be our last chance to dramatically reshape the course of history.
Divestment offers us the opportunity to affirm to the global economic system that the fossil fuel industry and investments in that industry have no place in a just and sustainable future. The continuing value of fossil fuel investments is literally dependent on our failure to combat climate change. Those who maintain their investments in fossil fuels are betting that we will fail to meet the threshold set by the Paris Climate Talks. Even though we must keep 80% of fossil fuel reserves in the ground in order to prevent catastrophic climate change, those like the Board of Managers who choose to remain invested in fossil fuels are gambling that all of the immense reserves held by the industry will be burned for profit. By continuing to invest in this rogue and dangerous industry, our college is betting against the success of the very efforts that a carbon tax entails. History will not speak kindly of the compromised obstructionism practiced by our Board.
Because the stakes could not be higher, because the lack of judgement on behalf of the Board could not be clearer, we have no choice but to take further escalated action to combat the greatest threat humanity faces. We will soon release a pledge asking fellow students and members of the Swarthmore community to take action with us at the beginning of April. We cannot stand by idly as the Board continues to legitimize an industry that increasingly threatens the very existence of frontline communities around the world, and we hope you will join us.
This piece was authored by Sophia Zaia ’18 and Lewis Fitzgerald-Holland ’18
Note: Information on Board members’ connections to the fossil fuel industry was compiled by Little Sis, a research tool run by the Public Accountability Initiative, a “non-profit, public interest research organization investigating power.”