- The Washington Times - Friday, November 21, 2014

The American University Board of Trustees has rejected a proposal to sell off all fossil-fuel investments from the D.C. school’s $550 million endowment, infuriating student activists and handing another defeat to the campus divestment movement.

Board of Trustees Chair Jeffrey A. Sine said in a memo Friday that the proposed divestment from oil, coal and natural gas would have conflicted with the board’s “primary responsibility” to manage and safeguard the university’s financial assets.

With the vote, AU joined a string of major U.S. colleges and universities that have rejected the call to divest all energy stocks in their endowments. In the last several years, 12 academic institutions — mainly small colleges — have agreed to divest from coal, oil and natural gas, while at least three dozen universities have refused to do so, including Harvard, Cornell and the University of California.

Divestment “is likely to have negligible financial impact on the affected companies,” Harvard President Drew Faust wrote last year in opposing the divestment idea. “And such a strategy would diminish the influence or voice we might have with this industry.”

The AU board also said Friday it could not justify the change.

“Since the conditions for board’s primary fiduciary responsibilities cannot be satisfied, the Finance and Investment Committee concluded that divestment is not an option the board can take to express a position on climate change,” Mr. Sine said.

At the same time, the board approved the launch of a Green Investment Fund, which would be made available to donors, and directed its investment advisory firm, Cambridge Associates, to consider the “environmental practices and policies of a prospective investment” in its future financial evaluations.

Still, students with Fossil Free American University who attended Friday’s forum at the Kay Spiritual Life Center on campus, were bitterly disappointed, as evidenced by a string of posts on the group’s Twitter account @FossilFreeAU.

“This board is not a leader. You didn’t stand with climate justice, you didn’t stand with students, you stood with the CEOs of Exxon,” said one post.

Said another, “Your decision puts @AmericanU on the wrong side of history.”

The two-year-old divestment campaign had won significant campus support. In April 2013, 79 percent of students voted to urge the board to freeze new fossil-fuel investments and “facilitate an open dialogue” on divesting from coal, oil and gas companies.

Among those who disagreed with the divestment strategy was Caleb Rossiter, an adjunct professor at the AU School of International Service, who said in a statement Friday he was “relieved that our university has rejected divestment of energy stocks.”

“Energy companies perform an important social function in delivering reliable, inexpensive and increasingly clean energy to residents and businesses around the world,” Mr. Rossiter said. “This work is particularly important in Africa, where only a quarter of households have access to reliable electricity and businesses are regularly hampered by power interruptions.”

Mr. Sine said in his memo that divesting from fossil fuels would cost the university an additional $1.1 to $2.2 million per year in management fees. He also said committee members concluded “they could not provide assurance that the effect of divestment would not be insignificant.”

In May, the board’s Advisory Committee on Socially Responsible Investing recommended a limited response that included partial divestment, investment in green energy and shareholder engagement with fossil-fuel companies.

“We know that some AU community members are disappointed that the board has chosen not to divest,” Mr. Sine said. “However, ACSRI’s work and recommendations from the campus community have inspired vigorous discussions and prompted the board to look at meaningful ways to remain true to AU’s values and support of green initiatives without jeopardizing the board’s fiduciary responsibilities.”

He also credited divestment advocates with highlighting “the challenges of global warming as an issue requiring serious thought and ongoing action at AU.”

Activists say they are not giving up. Just this week, seven Harvard students took the debate to court Wednesday, filing a lawsuit to compel the university to divest from fossil fuels.

And Bill McKibben, founder of the climate-change group 350.org, said in a Twitter post Friday that the battle over fossil-fuel investments at AU isn’t over.

“Now the fight really starts for @FossilFreeAU,” Mr. McKibben said. “We’re so proud of all you for pushing it this far already.”

• Valerie Richardson can be reached at vrichardson@washingtontimes.com.

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