On Monday, the Committee on Investments and Social Responsibility rejected GU Fossil Free’s proposal to divest from the 200 largest fossil fuel companies from its endowment. Instead, it recommended that the university’s Board of Directors should target coal companies for divestment and become an activist shareholder as it continues to invest in other fossil fuels. GUFF was quick to express its disappointment in response to CISR’s decision on its website on Monday night, insisting that complete divestment from fossil fuel is a moral imperative.
The Editorial Board has, on multiple occasions, fully supported GUFF’s divestment proposal, and we maintain that Georgetown cannot claim to commit to sustainability while continuing to invest in fossil fuels. However, GUFF should welcome CISR’s compromise and settle for partial divestment as a first step forward when it meets with the Board of Directors in February. Fully divesting from fossil fuel companies may send a strong message, but it might come at the expense of negative financial effects on students, faculty, and administrators. Instead of outright rejecting GUFF’s proposal, CISR made the right choice to balance the university’s financial needs and to recognize its obligation to support environmental sustainability.
Many residential projects have emerged since GUFF first announced its proposal in May 2013. In its rush to fulfill the 2010 Campus Plan’s many legal requirements, the university has diverted crucial funds away from other areas of campus life such as Henle Village renovations and Kehoe Field repairs to the Old Jesuit Residence. Tight finances have also affected academics. This semester, the registrar cancelled almost twenty undergraduate classes that did not meet minimum enrollment requirements in order to cut costs. The university is also committed to growing its endowment so that it can improve financial aid and increase socioeconomic diversity on campus.
If full divestment is truly a sustainable financial option for the university in the future, GUFF should let the success that comes from a partial divestment from coal companies support their case for further divestment from more fossil fuels.
At the same time, ambiguities lie in CISR’s recommendations. CISR failed to offer a timeframe by which the university should identify and divest itself from the endowment’s coal companies. Moreover, there is no guarantee that Georgetown’s stakeholder activism can exert any substantive pressure for energy companies to change their policies and practices, especially if the endowment’s stake in these companies are small compared to other, less environmentally-conscious shareholders.
Moving forward, GUFF should continue to collaborate with the university to fill in the gaps in CISR’s proposal. With sustained efforts on both sides that build upon what they have achieved thus far, the university can back its commitments to sustainability with environmentally and financially sound investment decisions.
Editor’s note: A earlier version of this editorial incorrectly identified the date on which the Committee on Investments and Social Responsibility released their response to GU Fossil Free’s proposal. The date was, in fact, Monday Jan. 26, and GUFF released their response on Monday night, not Tuesday.