Swarthmore College has dealt a blow to the climate change movement by rejecting calls to divest from fossil fuels, an unexpected move given the college’s status as a birthplace of the college divestment drive.
In a statement, the college’s board of managers cited its fiduciary responsibility in managing the institution’s $1.87 billion endowment, saying that fossil fuel divestment would cost between $10 million and $20 million per year, based on past performance.
“It would be difficult, if not impossible, to replace our current investment managers with ones of similar quality, if we were only to invest in funds that were fossil fuel free,” said the board in a statement after its Saturday meeting.
The prestigious Pennsylvania college’s endowment is “large but it is still finite. If returns were lower we would be facing difficult budget choices,” the statement said.
Divestment supporters were caught off guard, given that the board had agreed to revisit its Sept. 2013 decision against divesting from oil, gas and coal stocks. Students recently held a 32-day campus sit-in protesting the college’s holdings in fossil fuels, while the faculty voted in favor of a resolution recommending divestment.
Swarthmore Mountain Justice, the pro-divestment student group, said in an online posting that the board had come out “on the wrong side of history.”
“The Swarthmore community has spoken: over 2,000 Swarthmore faculty, students, and alumni, including UN climate chief Christiana Figueres ‘79, have called for fossil fuel divestment,” said the online statement. “But today, our Board of Managers chose to reconfirm its commitment to an industry that has no place in a sustainable future.”
Bill McKibben, founder of the climate change group 350.org, which has fueled the campus divestment movement, blasted the board’s decision.
“The students @SwarthMJ have worked longer and harder than just about anyone in climate fight. The college board is a corporatist disgrace,” said Mr. McKibben on Twitter.
The board’s decision to reject divestment may be out of step with campus fossil free advocates, but not other top U.S. colleges. About 50 universities have rejected divestment. Last month, the University of Colorado board of regents voted not to divest, following similar decisions by American University and the University of California.
The four-year-old campus divestment movement’s biggest successes came when Syracuse University agreed on March 31 to divest from fossil fuels, and last year at Stanford University, which agreed to divest from companies whose primary function is coal mining, but not from oil or natural gas.
Matt Dempsey, spokesman for the Independent Petroleum Association of America, applauded Swarthmore for keeping its holdings in fossil fuel companies.
“Today Swarthmore joined numerous schools across the country like Harvard, Yale and Middlebury in rejecting an anti-fossil fuel political campaign,” Mr. Dempsey said in a statement. “While activists are clearly good at getting headlines, schools understand that divesting would be all cost for no environmental gain.”
The Swarthmore board cited a 1991 policy against using its endowment to “take positions on social issues, believing that it could lead to a continuing stream of other divestment initiatives that in the aggregate could significantly harm the College’s long-term financial standing.”
“After long and deep discussion and debate, the Board decided not to modify its investment guidelines to allow for use of the endowment to meet social objectives,” the statement said. “This decision effectively ratifies the Board’s September 2013 decision not to divest from fossil fuels, either on a full or partial basis.”
The board also cited its many environmental sustainability endeavors, including spending $12 million on a new biology, engineering and psychology building to make it a “model for environmentally intelligent construction practices and energy usage.”
Swarthmore sophomore Stephen O’Hanlon said the student movement would be back in September to continue its push.
“We know it is only a matter of time before Swarthmore divests,” Mr. O’Hanlon said in a statement. “All that remains to be seen is whether Swarthmore is remembered as a leader or an institution forced by economic and social necessity to follow along.”