Swarthmore’s Divestment Potential: a Response to President Chopp
By Hannah Jones
Swarthmore Mountain Justice
The article below was written in response to an open letter to Mountain Justice from Swarthmore president Rebecca Chopp. President Chopp’s letter can be found here.
As members of Swarthmore Mountain Justice, our ongoing research has convinced us that Swarthmore can, and should, effectively promote social and environmental justice through divestment and responsible reinvestment, while still ensuring the financial health of the college. However, we have encountered skepticism from various members of the campus community, the most recent instance of which was President Chopp’s Op-Ed “Swarthmore’s Enduring Commitment to Sustainability.”
We are disappointed to see that President Chopp, along with other members of the campus community, have not addressed the justification and research we have laid out on divestment and reinvestment in previous publications and personal meetings. It seems that the conversations stop at the word “divestment,” rather than critically engage with discussions about the effectiveness of divestment as a tactic, or of socially responsible alternatives.
Many of the hesitations we have heard about divestment have revolved around the idea that it is too extreme, too drastic, or even “divisive and adversarial,” according to President Chopp. Divesting from these companies will create too many waves. Shareholder resolutions and moral appeals are how we do business here. If that does not work, then we should go through legislative bodies because they have the power to change regulations. With this column, we aim to clarify our own understanding of divestment, and address some of these concerns.
While we appreciate President Chopp’s support of various green initiatives on campus, as we have said in a number of other publications and in our proposal to her, we do not believe those to be enough. Nowhere does President Chopp address the inconsistency of greening our buildings while pouring money into companies like ExxonMobil and Arch Coal. Chevron does not even blink when we build another LEED certified building, but when we publicly withdraw our money from funding their destructive practices, they, along with politicians, students, CEO’s, and activists, hear and feel the impact.
We have been told by others that we should explore the possibility of a shareholder resolution. President Chopp discusses a shareholder resolution that pushed three Fortune 500 companies to adopt equal opportunity employment practices. While we applaud this effort, we do not believe that a shareholder resolution will accomplish our goals of taking a strong stand against fossil fuel extraction. In our previously published FAQ Sheet, we wrote this of shareholder resolutions:
“Shareholder resolutions are useful in cases where a company can reform its practices…but are virtually impossible when the reform undermines the economic purpose of the company in question…Companies can, and frequently do, throw out shareholder resolutions that are “related to the company’s ordinary business operations.””
The embedded link leads to a report on a shareholder resolution proposed by Green Century Capital Management at an ExxonMobil shareholders meeting. The proposal called on ExxonMobil to prepare a report on the possible social and environmental risks of the oil sands. However, the U.S. Security and Exchange Commission allows companies to dismiss a shareholder resolution if it “deals with matters related to the company’s ordinary business operations.” Hence, ExxonMobil dismissed the resolution. This particular shareholder resolution was merely asking for a report on the effects of ExxonMobil’s practices. Now imagine how quickly a proposal to stop drilling for oil, or to even drill for oil more “safely,” would be shut down.
Some think it is inconsistent with our college’s values to be confrontational or to bypass traditional lobbying routes in an effort to effect social change. Swarthmore’s Quaker history and values around dialogue are part of what makes it such a unique institution. However, sometimes we use these values to justify talking about injustice without taking concrete action. We equate taking a strong stand with unreasonable “extremism.” As we teeter on the brink of climate crisis, now is the time to act boldly. Swarthmore College has a long history of political confrontation, of taking bold stands in directions that others are not willing to go due to their “extremism.” To remain complacent in the face of climate injustice is an affront to our values. To abandon communities fighting for their health and lives is an affront to our values. To excuse our millions of dollars in investments as apolitical is an affront to our values.
Every day, the “Sordid Sixteen” blatantly disregards human and non-human life, violates health and safety regulations, destroys ecosystems, and poisons surrounding communities. Why should we wait and hope for them to change their ways? Why should we expect even more legislation to make a difference when they violate existing regulations daily while paid politicians turn a blind eye? Why do we consider a principled stance against climate injustice “extreme,” while we consider investing in companies that blow up mountains to be par for the course?
In contrast to the extreme effects that the fossil fuel industry’s practices have on the planet and its inhabitants, the effect that divestment would have on our endowment would not be extreme at all. In her Op-Ed, President Chopp repeats the Board’s policy that the Investment Committee should “manage the endowment to yield the best long-term financial results, rather than to pursue social objectives.” However, as we have demonstrated in our proposal and in previous publications, this choice between financial stability and social responsibility is a false one.*
Divesting from 16 companies would have minimal, if any, effect on the endowment, as they only make up a small percentage of our total investments. According to Swarthmore’s 2010-2011 Financial Report, the college invested 20% of its endowment in domestic stocks. The “Sordid 16” makes up only a small fraction of the possible domestic stocks we hold. There are thousands of other companies in which to invest our money, and it is a big leap to assume that divesting from these 16 would negatively impact the educational mission of the college.
The political and economic impact that divestment will have on fossil fuel companies, however, vastly outweighs the minimal risks it poses to the endowment, particularly as we continue to work with a growing national coalition of universities fighting for fossil fuel divestment. As more institutions loudly and publicly condemn these companies for their massive contributions to human suffering, environmental destruction, and climate change, the effect of those individual voices is magnified. Swarthmore is a visible, respected institution and has the responsibility to use that power to make waves. It is said that money talks and it is said that money is power. Divestment gives Swarthmore students, faculty, staff, administrators, and Board members a unique opportunity to speak truth to power in a language that power understands. If there ever was a time to use that opportunity in innovative and responsible ways, it is now.