The Yale Corporation has voted not to divest the University’s assets from fossil fuel companies.
The decision came in the context of a report by the Yale Corporation’s Committee on Investor Responsibility (CCIR) on what actions Yale, as an institutional investor, should take to address climate change. University President Peter Salovey announced the Corporation’s decision in an email to the Yale community Wednesday afternoon that also introduced several sustainability initiatives.
Students affiliated with Fossil Free Yale (FFY) — a student group advocating divestment — and the Yale College Council, which held a referendum last year that found that a majority of Yale students were in favor of divestment, expressed their frustration with the University’s actions. On Wednesday night, FFY hosted a vigil outside of Woodbridge Hall in which over a hundred students — many of whom had not been previously involved with divestment campaigns — gathered in a circle to mourn the decision, taking turns to share their thoughts.
Gabe Rissman ’17, policy coordinator for Fossil Free Yale, told the crowd that the vigil did not mark the end of student divestment campaigns at Yale.
“We’re not giving up,” he said.
Reflecting on previous student efforts to effect change, other students called for a more confrontational approach in the future.
“The inside game is over. We tried it for two years. It didn’t work. Big and loud is what we have left,” said Patrick Cage ’15, who helped lead a demonstration last spring of nearly a dozen students who were not formally affiliated with FFY or any existing organization but considered themselves concerned Yale citizens.
Yale College Council President Michael Herbert ’16, who also attended the vigil, told the News that some of the new sustainability initiatives seem like positive developments. Still, he deemed Wednesday a disappointing day because Yale chose to go against the “very clearly expressed will of the student body.”
While members of the CCIR acknowledged that climate change poses a grave threat to human welfare, they said divestment or shareholder engagement as a precondition to divestment were neither the right way to address this issue nor likely to be effective.
Yale is not alone in its decision against divestment. Harvard University President Drew Gilpin Faust rejected divestment in a letter to the Harvard community last October. No Ivy League school has divested from fossil fuel companies to date, though Stanford University voted to divest its assets from coal companies this past May.
Still, the CCIR expressed support for investor efforts to encourage companies to become more environmentally friendly.
“Yale will generally support reasonable and well-constructed shareholder resolutions seeking disclosure of greenhouse gas emissions, the impact of climate change on a company’s business activities and products, and strategies designed to reduce the company’s long-term impact on the global climate including through the support of sound and effective governmental policies,” the CCIR’s report read.
Salovey’s email said that during the coming year, the campus-based Advisory Committee on Investor Responsibility (ACIR), which serves as a liaison between students and the CCIR, will implement the CCIR’s guidelines when voting on shareholder resolutions.
In an interview with the News, Salovey said the report does not make clear whether the ACIR should take an active role in crafting such resolutions seeking disclosure of greenhouse gas emissions or merely vote in favor of them.
“The ACIR now has guidance from the CCIR and will decide how to respond to that,” Salovey said.
In addition to the ACIR’s actions, Yale’s Chief Investment Officer, David Swensen, will write to Yale’s external investment managers indicating that they ought to take into account the consequences of climate change in their investment decisions. Salovey told the News that the decision whether or not to make the letter public will be up to Swensen.
Still, Salovey suggested that Yale’s role as an investor is less important than its role as a center for teaching and research when it comes to combating climate change.
“We must stay attentive to what more the University can and should do in its schools, institutes and centers, as well as through University-wide programs,” Salovey’s email read.
Shortly before announcing the decision, Salovey met with members of FFY and the Yale College Council. While members of FFY were happy that the University acknowledged the gravity of climate change and was prepared to reduce its own carbon emissions, they felt that the actions of the University were inadequate.
“We think the things they’re doing are good, but it’s unacceptable that they’re not doing divestment,” said Alexandra Barlowe ’17, Outreach Coordinator for FFY. “We’re here for divestment. We’re not going away. They know that.”
Others expressed even stronger views.
Patrick Reed ’16, a founding member of FFY, said that Salovey was “lecturing us” and that the meeting was a “painful conversation.” He added that the administration “didn’t seem confident in their moral decision.”
In addition, FFY members were unsatisfied with the CCIR’s decision to have Swensen send letters recommending environmentally conscious business practices to the University’s external investment managers.
“It’s a show tactic,” said Project Manager of FFY, Mitch Barrows ’16. “The research has shown that shareholder engagement doesn’t work.”
FFY members also expressed frustration with how they were informed of the decision. Several leaders of the group received an email at 7:00 a.m. Wednesday morning requesting their presence in Woodbridge Hall at 11:30 a.m. The email announcing the decision was sent out while members were still meeting with Salovey.
In its statement, the CCIR said Yale should continue to be a leader in sustainability and sound environmental practices. However, FFY members who met with Salovey on Wednesday questioned whether Yale would live up to that ideal.
“The documents released today show that Yale is serious about tackling climate change, but only on campus,” Barrows said. “They’re taking seriously their own greenhouse gas emissions, but when it comes to fighting that problem globally, they’re not taking it seriously.”
In Salovey’s email, he noted that the University is engaged in several projects to advance its sustainable practices. Specifically, the letter outlined six initiatives to reduce its contribution to climate change.
Those initiatives are a $21 million investment in energy reduction and greenhouse gas reduction, expanded deployment of renewable energy on campus, disclosure of the University’s greenhouse gas initiatives, Green Innovation Fellowships, school-specific sustainability goals and the consideration of an internal carbon pricing mechanism.
Salovey has charged a committee, led by economics professor William Nordhaus ’63 and called the Presidential Carbon Charge Task Force, to examine whether Yale can implement an internal carbon pricing mechanism in an effort to reduce its greenhouse gas emissions.
Salovey told the News that he would like to have students serve on the committee. He has asked Nordhaus’ task force to report early next year whether such a mechanism is feasible for Yale.
Salovey added that he considers the University’s initiatives to reduce its greenhouse gas emissions very important.
“Where I think there is complete alignment between various constituent groups is that greenhouse gas emission and global climate change is the most important issue that faces the world in our time,” Salovey said.
Salovey emphasized that he played no role in the CCIR’s decision, telling the News that he last participated in a CCIR meeting early this spring.
Will Lana, a partner at Trillium Asset Management — a firm that incorporates environmental, social and governance features into its investment process — said that Wednesday’s announcement was unlikely to be Yale’s last word on divestment.
“I wouldn’t be at all surprised if Yale finds itself facing the same question in three, five, 10 years, but making a different decision,” Lana said.
The new CCIR members are Maureen Chiquet ’85 and Peter Dervan GRD ’72. They join Neal Keny-Guyer SOM ’82 and Catherine Bond Hill GRD ’85, who were on the CCIR last year.