Middlebury College Divestment discussion continues
By LUCIA SUAREZ
STAFF WRITER | January 24,2013
MIDDLEBURY — The consideration of divestment of Middlebury College’s $900 million endowment was the topic of conversation during a wide-ranging panel discussion that only touched the surface of the complex issue.
College students, faculty and staff packed the McCullough Student Center Tuesday night to listen to facts and points of view regarding the advantages and disadvantages of using divestment as a means of addressing climate-related issues. The panel was the first of several that college officials hope to host to continue the dialogue.
“This fall several student groups raised questions regarding Middlebury’s endowment, specifically whether, and to what extent, environmental or social issues should affect our investment policies and practices,” said college President Ronald Leibowitz before the program started. “The management of our endowment is complex and has evolved over time. Yet the concerns of our students and our community are real.”
The students were asking for the college to consider investing in socially responsible companies and cutting ties with those against the college’s mission of environmental sustainability.
“We have been leading in our environmental practices,” said Bill McKibben, founder of 350.org and a proponent of divestment at Middlebury. “It makes no sense greening up the campus without greening up the endowment.”
He said the hope is not to bankrupt companies like ExxonMobil, but instead that the attention generated by divestment can change the course of events, as seen during the anti-Apartheid movement several decades ago.
“There is no silver bullet,” McKibben said.
Middlebury’s endowment is $900 million, of which less than 3 percent is invested in companies of the fossil fuel industry. They have hired Investure, an investment management company based in Virginia, to manage a portion of the endowment.
The company’s founder and president Alice Handy said her company is willing to listen and work with the college on the topic of divestment, but because of how her company’s management policy is set up, she would need a unanimous buy-in from all her 14 clients to move forward.
“In practice, our clients pool their assets together into communal funds managed by Investure which have varying levels of liquidity,” she said. “This allows all our clients to have access to our very best ideas and so we don’t have issues of favoring one over another.”
According to Patrick Norton, president for finance and treasurer at Middlebury, about 5 percent of the endowment is used as part of the college’s annual $286 million operating budget. For fiscal year 2013, this amount is about $50 million or 18 percent of the budget.
He called the endowment a balancing act.
“First the endowment is used to support the education of the current generation of Middlebury students which is after all the college’s core mission,” Norton said. “The endowment is also used to support the education of future generations of Middlebury students with the concept of intergenerational equity whereby the purchasing power of the endowment is preserved.”
One of those students to speak was senior Charlie Arnowitz, president of the Middlebury’s Student Government Association, who spoke about ongoing results of a current survey the student government is conducting on divestment.
He said about 63 percent of the more than 1,000 students who had responded to the survey believed the college should apply the principles of socially responsible investing to the endowment, while 14 percent were opposed. He said 62 percent of students supported divestment while 15 percent were opposed.
“All things considered, we can see that a plurality of students and by students I mean respondents to my survey, care deeply about this issue and support some kind of action,” Arnowitz said. “Every students’ voice is legitimate.”
Opposed to the idea of divestment on the panel was Ralph Earle, a renewable-focused venture investor and former assistant secretary of environmental affairs for the state of Massachusetts. He said although climate change is the most critical issues of this generation, he does not believe divesture will be successful or have any impact.
“A significant number of the world’s largest fossil fuel companies aren’t publicly traded. That means that divesture wouldn’t affect, it might help competitively some of the largest oil companies in the world,” said Earle, adding that the fossil fuel industry is too broad of a target. “While I question the effectiveness of divesture as a step in addressing climate change, I strongly believe that there is ample room for college and universities to play a more central, coordinated and aggressive role in promoting our need to move to a carbon-free economy.”
At the end of the evening, Leibowitz said he was happy with the discussion though he felt a certain tension throughout. He said he hopes the discussion is the first of many in continuing the conversation of such a complex issue.
“I think some people held back on their comments,” he said as people were filing out. “I think we have only tapped the surfaced of the entire thing (and) I look forward to continue direct conversation with students.”