As we come to the end of the academic year I wanted to write to update you on the status of the fossil fuel divestment campaign.
Lest I bury the lead, I’ll say right up front that the biggest news is that Monday, May 1 the Gonzaga Student Body Association (GSBA) Senate voted nearly unanimously (only one “no” vote) in favor of the fossil fuel divestment resolution!
Resolution: We request that Gonzaga University’s Board of Trustees commit by 2020 to divest Gonzaga’s endowment from the current 200 most carbon-intensive companies. Doing so will formally recognize the reality and urgency of the climate crisis and show fidelity to our Jesuit, Catholic, humanistic mission and to our endowment Investment Policy and Guidelines. (See justification here.)
Join me in congratulating the student activists from GEO who have dedicated countless hours to researching and advocating for this measure. They are motivated because they believe in what Gonzaga says it stands for: “The Gonzaga experience fosters a mature commitment to dignity of the human person, social justice, diversity, intercultural competence, global engagement, solidarity with the poor and vulnerable, and care for the planet.”
Remembering the context of the debate:
Latest NOAA Assessment:
- The March temperature across global land and ocean surfaces was 1.89°F above the 20th century average of 54.9°F. This was the second highest for March in the 138-year period of record, behind 2016 by 0.32°F.
- This was the first time the monthly temperature departure from average surpassed 1.80°F (1.0°C) in the absence of an El Niño episode in the tropical Pacific Ocean.
- The March globally averaged land surface temperature was 3.56°F above the 20th century average of 40.8°F. This value was also the second highest March land global temperature in the 1880–2017 record, trailing 2016 by 0.68°F.
- March 2017 had the highest monthly global land temperature departure from average of any month since March 2016 and the third highest land monthly temperature departure among all months (1,647) on record.
- The March globally averaged sea surface temperature was 1.28°F above the 20th century monthly average of 60.7°F—the second highest global ocean temperature for March in the record, behind the record year 2016 by 0.18°F.
- This was the highest global ocean temperature departure from average since October 2016 (+1.30°F).
Fossil Free Gonzaga student campaign
- The students of the Fossil Free Gonzaga campaign hosted two lectures this year with the support of the Office of Sustainability and the President’s Office. You can find the lectures online here:
- The students have also collected 360 signatures in support of divestment. More here.
- As mentioned at the top, the students created a fossil fuel divestment resolution and justification and submitted it to the Gonzaga Student Body Association (GSBA). After having been approved by the relevant subcommittee, it was then voted on by the GSBA Senate and was approved at their May 1 meeting. According to the GSBA Speaker of the Senate Nick Ramos, the vote tally was 22 yes, 1 no, 2 abstain.
Fossil Free Gonzaga faculty campaign
- The faculty campaign crafted a fossil fuel divestment resolution and justification, which can found here.
- To date, 144 individual faculty (approximately 33%) have added their signature in support of the resolution. See the list here.
- The faculty leaders of the divestment campaign met individually with many faculty senators and made a presentation to the full faculty senate.
- The faculty fossil fuel divestment resolution is on the Senate’s agenda, but it is unlikely that it will be able to take up the issue in its last meeting of this academic year. It will remain on the Faculty Senate’s agenda be taken up in the fall.
- President McCulloh signed on behalf of Gonzaga a letter to President Trump and the new Congress. A copy is here. It urged:
- Participation in the Paris Agreement, with the resulting national carbon reduction and clean energy targets, to protect the health of our current communities and our future generations.
- Research in our academic institutions and in federal agencies to ensure that our national climate, energy, and security policies are based on leading scientific and technical knowledge.
- Investments in the low carbon economy as part of a resilient infrastructure to ensure the country can adapt to changing climate hazards. These investments will also help grow American jobs and businesses.
- At the urging of the faculty and student divestment campaigns, the Gonzaga Board of Trustees paid for an “Endowment Fossil Fuel Exposure” analysis, the results of which were shared by Associate VP for Finance Joe Smith at two open meetings in February.
- The analysis revealed that 4.4% of the analyzed endowment holdings are in fossil fuels (.5% in thermal coal; 3.3% in natural gas; 3.4% in oil).
- Though a small portion of the endowment, given that these fossil fuel holdings are often held in mutual funds, eliminating these fossil fuel holdings would require dropping some funds, thereby affecting a larger percentage of the whole.
The History of Divestment at Gonzaga
- With the help of a student, I collected Bulletin coverage four year push by students in the 1980s to convince the administration to divest from Apartheid South Africa. The Board of Trustees initially voted against divestment and only agreed after student protests grew. We were on the right side of history then, hopefully the same will be true now. The history of the current movement and the movement from the 1980s can be found here.
- You may know of Archbishop Desmond Tutu–whom you might recall Gonzaga recently recognized with an honorary degree—played a significant role in ending Apartheid in South Africa. This 3-minute video by Tutu links the divestment movement in the 80s to the current fossil fuel divestment movement: http://divestinvest.org/individual/desmond-tutu-on-climate-change/
Fall 2017 Divestment Event
- There is broad and deep support for Gonzaga to divest. Some of the lingering concerns are financial in nature. To help continue the work of informing the community, the Environmental Studies Department, the School of Business Administration, and the Fossil Free Gonzaga campaigns will host an expert on finance to discuss the divestment from a financial point of view.
“Gonzaga Divestment Perspectives”, Randy Cerf, Financial Advisor, Waddell and Reed, Seattle
Wolff Auditorium, September 19, 2017, 5:30-7:00
Sponsors: Environmental Studies Department; School of Business Administration; Fossil Free Gonzaga
FB Event page
Abstract: Rather than focus on the moral or political rationale for fossil fuel divestment I will focus on the economics and practical challenges. I will attempt to address common finance committee level concerns that are commonly raised about divestment in a balanced way. I would anticipate answering these three questions:
- Is Fossil Fuel Divestment likely to make a material difference to portfolio performance? Let’s keep perspective on the very limited aggregate performance differences relative to the massive uncertainty about the performance of the broader markets. And let’s keep perspective on strategies to manage or take advantage of any modest performance differences.
- Will Fossil Free Divestment Be Good or Bad for Portfolio Performance? The punch line: there will be differences in performance but they will likely be very modest and it is unknowable whether they will help or hurt performance. Most divestment opponents raise legitimate concerns about the superior historical returns of the energy sector (until about 10 years ago), the impact of reduced diversification, transaction costs and ongoing costs. I will demonstrate the irrelevance of historical returns to future expectations, explore the importance of efficient market theory, examine the risk implications of divestment and burrow into transaction and ongoing costs.
- What are some of the less obvious issues that need to be considered? Divestment raises a host of management and philosophical questions.