Dear Lehigh University,
A Master’s in Environmental Policy is bittersweet in 2015. We are given the tools to do what is morally right but are hindered by what I was told was financially feasible. I graduated in 2015: the year the world will agree a new global accord on climate action (through the UNFCCC) in Paris and set a Post–2015 Sustainable Development Agenda. This is also a breakthrough year for reinvestment strategies: where the word Divestment once seemed like it might stain the ivory towers of our major institutions, it is now a central component to the actions being taken by leading companies, investment funds, and insurers. Educational beacons are now being marked as a call to action.
My Lehigh University experience of increasing visibility on climate change issues is diminished with the failure to inspire more debate surrounding divestment at my university. Did I do enough to fundamentally further the “divestment talks” at my university? In two short years I graduated with a Master of Arts degree in Environmental Policy Design, and while we celebrate our shared achievements, I am haunted by numbers: 1.2 Billion, 80 million, 4 students.
$1.2 Billion Endowment.
A newly minted environmental policy degree in hand, I walked across the grass in the stadium of an institution that has over 80 million invested in fossil fuels—directly in oil in gas and indirectly through private equity firms. By looking at Lehigh University’s 2013–2014 Annual Report and flipping to the financial section, this number represents total accumulation of wealth from investments in a variety of sectors. From the report’s overview: “The endowment fund ended the fiscal year with a value of $1.22 billion, up from $1.10 billion the previous year. The endowment earned a return of 14.0% for the year, outperforming the policy benchmark by 1.6%.” Chevron is the proverbial cherry on top, taking the largest share of that 7%. But when I think back over my two years I remember the few students who built a movement around the identity Lehigh University is striving to achieve—that of being a front-runner for sustainability, innovation and strategic thinking. I participated, but was it enough? So, how much is Lehigh University making off of fossil fuels? To answer this question one number needs to be understood.
80 million dollars invested in Fossil Fuels.
Endowment for whom, and endowment from where? As a student who received significant scholarship and stipends from Lehigh University, are my hands also oil-stained and blackened with GHG emissions? If so, then the student scholarship versus student debt paradigm really is the crisis of my generation, because by accepting funding we become enablers.
This is the 1.2 billion dollar elephant in the scholarship package we generally prefer not to talk about. Do I want to associate my academic achievements with money from fossil fuels? Lehigh has more than 7,000 students, and its professors and staff have the authority to suggest and foster institutional change in how Lehigh is investing its endowment. The administration has the formal authority to divest and reinvest; students have the power to make them do so.
For Lehigh University, there are two arguments: a financial one, and a moral one.
The moral imperative to do so transcends considerations like balance sheets and bottom lines. As Gerardo Calderon, Lehigh University Political Science alum puts it, “It is neither ethical nor coherent that Lehigh is endangering the future of the same students that it is educating by investing millions of dollars in the dirtiest form of energy in the world: fossil fuels.”
I am calling myself and my university out.
Lehigh University, you had plans. I know, as a Graduate Assistant in the Office of Sustainability I became very familiar with them. The 2014 University administration repeatedly stated that the construction of the STEPS building, the adoption of the Climate Commitment in 2009 and the creation of the Campus Sustainability Plan in 2012 were the strategic guidelines required to foster environmental sustainability across the Lehigh community. While these advancements are worthy, they remain almost meaningless when we take into account the amount of CO2 produced by the $80 million that Lehigh invests in the fossil fuel industry.
I don’t know if you remember, Lehigh, but in March 2014, former President Alice Gast and Lehigh University’s Chief Investment Officer, Peter M. Gilbert, met with various students to discuss divesting from fossil fuels. It was very disappointing to find out that Lehigh’s investments are not evaluated by any sort of moral filter.
To further clarify, Gilbert noted that the purpose of having an endowment is to grow it—or, as he put it, “not investing with moral screens of any type, whether that’s alcohol, guns manufacturers, or tobacco.”
In this meeting, Former President Alice Gast stated that she did not conceive of Lehigh’s investments as a political or moral tool. Lehigh University?! Is this true? By the simple fact of investing 7 percent of your $1.2 billion endowment in the fossil fuel industry you, Lehigh University, are making a choice to lend financial and political support to dirty energy. You are investing in publicly traded companies that have woven themselves into the fabric of our politics. Politics is about choices that affect other people, so the choice to support and profit from these companies endorses the harm they cause.
Lehigh, you are making money out of destroying the environment—Lehigh students’ environment. It is shortsighted to think that investments are just “business transactions” when some companies are actually spending the money you give them to run coal plants, to bribe governments into allowing lax regulation on extractive industries, or even to finance the campaigns of Congressmen who fully support the antiquated fossil fuel industry, while overlooking the harm it does to their children and grandchildren.
Lehigh University, look at other schools—“aspirational schools” that are doing much better when it comes to taking socially responsible steps toward divestment. For example, last year Donald P. Gould—a trustee and chair of the investment committee at Pitzer College and president of Gould Asset Management—stated that “The real hypocrisy is saying that you support a world largely free of fossil-fuel emissions, while at the same time betting on their producers to continue delivering a steady profit stream to your endowment.”
Lehigh, from a financial point of view, divesting $80 million from fossil fuels may not generate an immediate impact in this industry, but this symbolic step will certainly provide some substance to the Campus Sustainability Plan, and to what the Office of Sustainability is able to achieve. There are many advocates that want to work with you, Lehigh.
Peter Crownfield founder of the Campus Sustainability Initiative for the Alliance for Sustainable Communities-Lehigh Valley, says “In addition to ignoring moral values and undermining the future of students, the university administration apparently does not realize that divestment from fossil fuels could actually INCREASE endowment earnings—and liberate funds to invest in projects that would reduce the ~60,000 tons of CO2 that Lehigh emits each year, while reducing operating costs at the same time.”
Lehigh University, you have to admit Mr. Crownfield makes a valid point. Further, divestment will send a powerful message to students, parents, alumni, the Lehigh Valley community, and even other universities about our strong and coherent commitment to fostering an environmentally sustainable society. We are, after all, a place for ideas, intelligence, study and innovative collaboration. We can use that human value to achieve something the world could emulate. The credibility such leadership brings might in itself be worth a lot more than a 14% return on $80 million. Ultimately, divesting the 7 percent of Lehigh endowment currently committed to fossil fuels and then reinvesting it in renewables is not a financial challenge at all, and will not put our university in a financial crisis. This change is technically and financially feasible. And students agree.
Divestment is not an empirical challenge, but a political one.
Lehigh, if 100 students held a sit-in for two weeks in a row, and the world focused its attention on this moral and political dilemma you seem caught in, divestment would seem more doable—wouldn’t it? 97 percent of climate scientists agree that climate change is happening, that CO2 is one of the greatest contributors to the greenhouse effect and that fossil fuel industries are the main source of those greenhouse gases. Therefore, may I ask why our forward-thinking, globally prestigious and environmentally minded university is still investing millions of dollars in fossil fuels?
Yes Lehigh University, I am aware that making as much as we can from the endowment is crucial for supporting research, fellowships, scholarships and a number of important projects. Yes, I am aware that fossil fuels are still a very profitable industry for investors. But the same was said of slavery at one point in our history.
Lehigh, I am writing to you because I know you believe that universities should not be money-making machines. On the contrary, higher education institutions have a moral responsibility to lead social change in the world. Beyond that, divesting from fossil fuels is a matter of survival. Our lives, and Lehigh students’ lives, depend on how well this generation preserves the environment.
Last year, a student wrote a similar letter to former Lehigh President Alice Gast who sat on Chevron’s Board of Directors. The student, now an alumnus, was concerned about how Gast’s position may have influenced the university’s unwillingness, your willingness, to divest from fossil fuels. Will the new president be accountable only to the Lehigh community and not to corporate interests? Will the new president take the time to respond to a letter written two years ago that went unanswered?
This summer, Lehigh University, we will celebrate your 151st anniversary, announcing a new era of institutional coherence and commitment to sustainable development. Alongside my support, you can also count on the support of campus offices and associations that hope for a sustainable planet, and on the support of all students who want to live in a safer and healthier environment.
The new university president you are receiving wants change. John D. Simon takes the helm on July 1st 2015.
Will you encourage him to lead the University into Divestment from Fossil fuels? John D. Simon believes in you as an institution to lead. Let’s help him answer the call to action. Because if he is right, then we have a good year ahead of us, Lehigh.
In his own words: “I firmly believe Lehigh has the strengths and assets necessary to continue its impressive evolution into one of the nation’s most important institutions of higher education.”
Let’s hope you do, President Simon. Because this historic leadership opportunity is at your Lehigh University’s doorstep, knocking… will you answer the call?
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Adapted from Gerardo Calderón and written by Sarabeth Brockley—Lehigh University Alumni.