Oct

16

What’s This Divestment Thing?

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HEELPPPPP MEEEEE
HEELPPPPP MEEEEE

This guy, but in fuel form

If you haven’t already voted–and you should!–learn something about this Divestment thing, which is on the ballot as part of the ballot initiative.  Hailey Riechelson, part of BCDivest, provides an explanation for you to peruse:

Though the Barnard Columbia Divest Campaign has been working hard to establish itself on campus, many students are still unaware of what Divestment is. As a university, Columbia has a large endowment, some of which maintains investments in successful companies o further increase the endowment. The Divestment Movement is a push for the removal of investments from companies tied to undesirable policies. Barnard and Columbia’s first divestment campaign led to the successful divestments of companies supporting Apartheid.

The club’s current goal is to have Barnard and Columbia Divest from fossil fuels. Columbia has not released information about how much of its $7.8 billion endowment is invested in fossil fuels. 3.6% of Barnard’s $215 million endowment is invested in fossil fuels amounting to a $9 million investment. Assuming the percentage of Columbia’s endowment invested is the same as Barnard’s, this would mean a $288 million investment.

In the grand scheme of the fossil fuel industry, a combined $297 million investment may not seem like much, but nationwide universities have $400 billion dollars invested in the fossil fuels industry. 450 colleges and universities have divestment movements and so far 6 colleges and universities and 16 cities have divested.

Aside from the obvious environmental concerns involved in supporting fossil fuels, human rights must be considered as a main reason for divestment. While developed countries are the main users of fossil fuels, the underdeveloped countries will be most effected by the ensuing climate changes. Developed nations have resources to recover from environmental disasters, but underdeveloped nations will be less able to recover.

Another issue is the hypocrisy of Columbia supporting fossil fuels. Columbia spends large amounts of money on its Earth Institute, a leader in renewable energy research, but at the same time invests in unclean forms of energy.

Many students worry that divestment will lower the schools’ endowments and student financial aid, but research has shown that this is not the case.

A petition to put the issue of Divestment on the ballot for the upcoming Senate election got over 450 signatures from Columbia College students, meaning it is on the ballot. Make sure to go vote!

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15 Comments

  1. Anonymous

    "Many students worry that divestment will lower the schools’ endowments and student financial aid, but research has shown that this is not the case."

    Can someone provide a link to this research? Presumably the endowment is currently being invested in a way to maximize return. If you place a restriction on it (not allowing it to invest in one of the world's largest industries no less) surely that would cause a suboptimal return? Otherwise why would they invest in that industry in the first place?

    I understand that people don't want Columbia to invest in certain industries, but let's not act like there would be no downside to making such a decision.

    • Anonymous  

      http://www.impaxam.com/media/178162/20130704_impax_white_paper_fossil_fuel_divestment_uk_final.pdf

      "...let's not act like there would be no downside to making such a decision"

      There wouldn't. See the above. There is even a good chance there would be BETTER returns.

      "Presumably the endowment is currently being invested in a way to maximize return."

      That's a big assumption. Perhaps oil is just more of a safe bet, but that doesn't mean there aren't any alternative "safe bets" out there.

    • Anonymous  

      impaxam.com/media/178162/20130704_impax_white_paper_fossil_fuel_divestment_uk_final.pdf

      "...let's not act like there would be no downside to making such a decision"

      There wouldn't. See the above. There is even a good chance there would be BETTER returns.

      "Presumably the endowment is currently being invested in a way to maximize return."

      That's a big assumption. Perhaps oil is just more of a safe bet, but that doesn't mean there aren't any alternative "safe bets" out there.

    • Here's a link to a short piece in the Chronicle of Higher Education about a report by the Aperio Group, an SRI investment firm. They found that divesting from fossil fuels adds a risk of about .01% or less to the portfolio. http://chronicle.com/blogs/bottomline/divesting-in-fossil-fuels-shouldnt-harm-endowments-report-finds/

      Also, check out this piece in the Guardian (and elsewhere) about a report by the bank HSBC on the Carbon Bubble. Essentially, fossil fuel reserves are over-valuated, as eventually governments will HAVE to keep them underground to preserve civilization and all fossil fuel investments will become worthless. http://www.theguardian.com/environment/2013/apr/19/carbon-bubble-financial-crash-crisis

      As for financial aid, that is not tied to adding a < 1% risk to the endowment. At Brown, during the recession in 2009, the endowment went down but financial aid went up. We have spoken to someone from University Senate who said that Columbia's financial aid was not impacted by the recession either, even though the endowment was hit.

      When you have close to an $8 billion endowment, financial aid is a matter of prioritization and most impacted by the values of the university's leadership - not fossil fuel divestment.

      Please feel free to reach out with any more financial questions to [email protected] - we'd love to talk. :)

    • Anonymous  

      That poor $8 billion dollar endowment, how will it ever cope with a reinvestment of a fraction of its money? I'd be truly sad if it meant that we had to give up a yacht for the sailing team.

    • anon  

      if, hypothetically, we invested in fossil fuels a similar percentage of our endowment to that of Barnard (~4%), the change in returns would only impact 4% of our endowment / return on investment. so, it would be marginal.

      I think one of the most important factors regarding divestment is that once more universities get on board, it will raise public awareness--especially regarding the amount of subsidies given to the fossil fuel industry. If public opinion is shifted, then there's a stronger likelihood of significant change.

  2. Anonymous

    Columbia's endowment (without Barnard or TC) is now 8.2 billion.

  3. Anonymous

    Columbia doesn't need one penny of that 8 billion. Columbia runs on hate. In fact, the University is already looking into putting that money to good use — more ramps in Lerner hall, hiring more expensive professors that speak less English, starting classes at dawn, putting an electric fence around the lawns, remodeling dormitories to fit double the capacity, and tripling administrative staff by hiring veterans of the Department of Motor Vehicles (minimum 20 years experience)— all to spread the hate.

  4. meh  

    In the grand scheme of things, fossil fuels will not be a safe investment in the next 15-25 years. I don't see why Columbia can't just divest now to make a bold and progressive statement.

  5. YungMoney$  

    The number of corporate shills here for the oil industry is amazing... trying to dominate the discourse with your demagoguery. IT WON'T WORK YOU FASCISTS! If you hate our planet so much why don't you just get out!

  6. Julian  

    I'm all for divestment, as long as this club is not also calling for transparency from our investment management team. Our endowment has the best returns in the country. Don't want the other schools stealing our investment secrets!

  7. King  

    I have no problem with the school making money from this. The investments will be used on us. Who cares if they invest in fossil fuels anyways? It is not like the industry will shut down if Columbia withdraws its investment. We may as well take advantage of the opportunity to make money.

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