Bottomly says Wellesley will commit to sustainability through Campus Renewal, other projects
By EMILY BARY ’14
Co-Editor in Chief
In a statement released to the College community on Friday, March 7, President H. Kim Bottomly announced that Wellesley would not divest its endowment of holdings in fossil fuel companies. Fossil Free Wellesley (FFW), a student organization, asked the Board of Trustees in October to immediately freeze all new direct holdings in fossil fuel companies, sell off direct holdings in the 200 largest public fossil fuel companies within two years and sell off all holdings in all fossil fuel companies within five years.
“The Board, and I, do not support the idea of using the College’s endowment as a lever for social change and determined that such an action would conflict with the purpose of the endowment,” Bottomly wrote in the statement.
The announcement didn’t come to a surprise to members of FFW because they had seen college administrations across the country reject plans for divestment.
The Board discussed FFW’s divestment proposal at its annual winter meeting in early February. Bottomly also commissioned a group of trustees, administrators and faculty members to look into the possible long-term effects of divestment on endowment returns. The group concluded that Wellesley’s endowment would lose value if the College sold its shares of fossil fuel companies and if it declined to invest in funds that included fossil fuel holdings.
“The result of that examination was conclusive: the cost to Wellesley would be high and the economic impact on fossil fuels companies inconsequential,” Bottomly wrote.
Divestment is complicated because many institutions like Wellesley use outside firms to manage the endowment. Outside managers invest Wellesley’s money in co-mingled funds, alongside the money of other investors, and Wellesley would have to withdraw its money from managers it deems well-performing if it tried to impose restrictions.
Members of FFW have not given up on their push for divestment and believe that they can find socially responsible investment funds that do as well as or better than Wellesley’s current managers. They are working on conducting research on these funds that they will be able to present to the Board in the future.
Fossil fuel divestment has become a hot issue on college and university campuses recently, and hundreds of colleges have student groups aimed at convincing their institutions to divest their endowments of fossil fuel stock. Only a handful of colleges have opted for divestiture, and they are small schools with small endowments. Wellesley’s large $1.576 billion endowment contributed roughly 41 percent to the operating budget of expenses last year, meaning that Wellesley is very dependent on its endowment and that a decline in the value of the endowment could hurt the College.
Members of FFW have reached out to other college campaigns for advice about strategy. They’ve collaborated with representatives from Swarthmore’s Mountain Justice, the school’s divestment group, and have helped new campaigns at other schools get on their feet.
Other colleges and universities that rejected divestment proposals have suggested alternate ways for institutions to take action on climate change. Harvard administrators announced the establishment of a social choice fund separate from the main endowment in late 2012. The fund is meant to serve as a vehicle for socially and environmentally conscious investing.
Bottomly wrote that Wellesley has already been engaging in socially responsible investing via a proxy-voting subcommittee, but announced that she would establish a group to “formalize standards and practices of our socially responsible investing going forward.” She also said that Wellesley would fund green investments that pay for themselves through energy savings and use the Campus Renewal project as a way to make College buildings more environmentally friendly.
Meredith Wade ’17, a core organizer of FFW, said that FFW is interested in playing a role in the College’s drafting of ethical investment standards and that members plan to be in contact with some of the College’s trustees as Wellesley goes about formalizing its guidelines. However, she noted that FFW would continue to advocate divestment. The group is now reaching out to alumnae in hopes of demonstrating to the Board that there is widespread support for the divestment movement
“The Board of Trustees was really impressed that we got so many student signatures in support of divestment—we had over 1,000—but having alumnae support would be coming from a different angle,” Wade said. “Their voices carry a lot more weight and the Board of Trustees is very invested in what they think.”
Meanwhile, FFW will continue its on-campus divestment push today at 12:30 p.m., when supporters of the movement will gather outside the campus center and march to Green Hall to read a statement to President Bottomly in response to the College’s divestment decision.