Recommendations on Climate Impact, Sustainability, and Divestment
— Originally published in The Grinnell Magazine, Summer 2018.
At the spring 2018 meeting of the Grinnell College Board of Trustees, the Fossil Fuels and Climate Impact Task Force issued its recommendations about climate impact and divestment. The board voted to accept our recommendations, which are briefly outlined below.
We — Michael Kahn ’74 (chair), Kathryn Jagow Mohrman ’67, and Edward Senn ’79 — spent nearly a year researching, reading, listening, and discussing the issues related to fossil fuel divestment and other actions the College could take to positively impact climate. We made it a priority to conduct our work in an open-minded, intellectually rigorous, transparent, and inclusive manner. Our detailed final report and all research materials are available online (grinnell.edu/about/trustees/fossil-fuels-task-force).
Recommendations related to climate change and sustainability
We believe that the most effective way for Grinnell College to have a positive impact on climate change is to reduce its carbon footprint. To this end, we strongly endorsed the Grinnell College Sustainability Plan, also available at the link above. Since energy consumption is the largest single source of greenhouse gas emissions at the College, we particularly recommend the continuation of efforts, referenced in the Sustainability Plan, to replace the College’s fossil-fuel–based electricity supply with renewable energy alternatives.
We also recommended creating a standing campus Sustainability Committee composed of faculty, staff, students, and alumni to coordinate efforts and bring greater focus, visibility, and momentum to the many excellent recommendations included in the Sustainability Plan. We recommended annual progress reports to the Board of Trustees and the College community on the implementation of the Sustainability Plan and other campus climate actions outlined in our report.
Recommendations related to divestment
During our deliberations about whether or not to recommend divestment of fossil fuel holdings, we considered many factors and sought to answer a series of questions, including:
- Does divestment from fossil fuel companies directly and effectively impact climate change?
- Would divesting from fossil fuels adversely impact our endowment returns and thereby diminish our ability to fulfill our educational mission?
Having considered a great deal of information and diverse perspectives, we recommended that the College should not divest from fossil fuel holdings in our endowment. Although divestment actions have been effective in raising public awareness, there is little evidence that such actions have had any direct impact on climate or changed the policies and behavior of fossil fuel companies. To the contrary, there is growing evidence that engaged investors are having increasing impact in changing the policies of these companies. We further concluded that divestment would introduce significant investment risk in the endowment, jeopardizing the generous financial aid and educational excellence that are so heavily dependent on endowment funding and strong investment returns.
We recommended that Grinnell’s Investment Committee and Investment Office take actions to enhance existing environmental, social, and governance (ESG) capabilities and increase shareholder engagement, where appropriate, reporting to the full Board of Trustees with a plan for accomplishing this goal. We believe enhancing the application of shareholder engagement and ESG diligence and monitoring enables us to have impact on issues such as climate change without having to change the way we manage our endowment.
We also recommended that the Investment Committee assess the feasibility of creating a separately managed fund within the endowment that would allow future contributions to be managed in a fossil-fuel–free portfolio at the request of the donor and that the Investment Committee consider the use of additional socially responsible investment criteria in the construction of such a fund.
We were inspired by the Grinnell College community’s passion for confronting the climate change issue. We believe our collective Grinnellian commitment to implementing the report recommendations can and will make a difference in addressing climate change.