Last week, the University of Dayton (UD) announced they will divest fossil fuels from their $670 million endowment – the first Catholic university in the nation to do so. Carbon Tracker 200 and “Filthy 15” corporations will be phased out, and investments in sustainable and clean energy firms will increase.
Naysayers claim divestment won’t work. But I’m hopeful, along with many others, that it will, and, with good reason.
The momentum for fossil fuel divestment is building. Since May, Stanford University divested from coal and Union Theological Seminary divested from fossil fuels, joining many other universities, religious institutions, foundations and municipalities. These efforts have been prompted by campaigns including 350.org’s Fossil Free, GreenFaith’s Divest and Reinvest Now and Divest Invest Philanthropy.
The frightening facts serve as motivation. At the Do the Math Chicago tour stop in November 2012, where I first learned about fossil fuel divestment, Bill McKibben outlined how 80% of global coal, oil and gas reserves must stay in the ground to avert catastrophic climate change. Meanwhile, the fossil fuel industry is funding climate denial, refusing to advance clean alternatives and blocking climate policy. The divestment movement aims to shake the entrenched interests and move forward meaningful solutions.
Powerful allies, including Archbishop Desmond Tutu, have added a persuasive voice of support. “We need an apartheid-style boycott to save the planet,” said Tutu in a recent op-ed. “We must stop climate change. And we can, if we use the tactics that worked in South Africa against the worst carbon emitters.” Nelson Mandela acknowledged the University of California’s $3 billion divestment played a significant role in ending apartheid.
At UD, the Board of Trustees’ unanimous decision to divest was mission based, reflecting the University’s commitment to environmental sustainability, human rights and its religious mission. Following Catholic Marianist values of leadership and service to humanity, UD’s President Daniel Curran asserted in the press announcement, “We cannot and will not ignore the negative consequences of climate change and a warming earth, which disproportionately impacts the world’s most vulnerable people, but hurts us all.”
Catholic universities are uniquely positioned to make an enormous impact because of their moral mission and sheer size. There are 196 Catholic universities and colleges crisscrossing the country. These schools represent millions of students and alumni, and untold billions of dollars in endowment assets. The University of Notre Dame’s endowment is over $8 billion alone. Imagine the sea-change if all these universities banded together to divest? While there is no official Catholic position on divestment, Michael Galligan-Stierle, president of the Association of Catholic Colleges and Universities, applauded UD’s leadership and added, “This is a complex issue, but Catholic higher education was founded to examine culture and find ways to advance the common good. Here is one way to lead as a good steward of God’s creation.”
Stewardship of the earth is a Catholic teaching. The U.S. Conference of Catholic Bishops (USCCB) has acknowledged that human activity is contributing to global climate change, and stated, “Significant levels of scientific consensus…justifies, indeed can obligate, our taking action intended to avert potential dangers.” Along these lines, last month USCCB urged the EPA to set carbon pollution rules for existing power plants, noting, “wise action to address climate change is required now to protect the common good for present and future generations.”
Mindful of stewardship, widespread student interest, and expanding clean energy economic opportunities, UD has comprehensively integrated sustainability. Silver Star efforts include reducing the campus’s carbon footprint, offering studies in Sustainability and Renewable Energy to prepare nextgen leaders, and conductingleading research on fuel efficiency and alternative fuels. Sustainability has become a priority at most Catholic universities (Loyola Chicago may be one of the nation’s greenest schools) and divestment is a fitting component.
Respecting human life, particularly the poor and vulnerable, are other Catholic teachings that make these schools ripe for action. As witnessed by the Catholic Relief Services, climate change is causing destruction and human suffering around the world from heat waves, droughts, flooding, wildfires, extreme weather calamities, infectious disease and conflicts over dwindling resources, which disproportionately affect the poor. Catholic colleges are preparing students to promote human dignity and social justice. UD has actually pioneered the nation’s first human rights studies program, and recently opened a Human Rights Center, joining others found at Boston College, DePaul, Notre Dame and Georgetown.
The consideration of compelling human and moral factors, beyond maximizing profit, is already an investment practice at Catholic universities. Investment policies may restrict objectionable companies from investment portfolios regardless of financial attributes. With screens ranging from adult entertainment to tobacco, socially responsible standards may also restrict fossil fuels.
One of the biggest claims against divestment is that endowments will be doomed without fossil fuels. Not true. Fiduciary duties can be fulfilled with values-based investing. After a year long process and analysis with numerous investment consultants, UD’s investment committee concluded that divesting from fossil fuels is unlikely to harm the endowment. This assessment of risk and performance has been backed by multiple reports. It’s also prudent to protect portfolios from the underpriced risk of stranded carbon assets.
Until recently, it hasn’t been easy for institutions to exclude fossil fuel stocks from mutual funds and indexes. For instance, 8% of the S&P 500 consists of Carbon Tracker 200 companies. Fortunately, the market is responding to demand. New fossil-free investment services and products have emerged, such as Aperio, Trilium,Impax and BlackRock/NRDC/FTSE. Smart, creative, mission-focused managers can grow fossil free endowments. If you question whether divestment makes financial sense, check out this must-see Bill Moyers interview, for fuller discourse.
With climate change directly impacting the future of students, it’s no surprise that Fossil Free campaigns have been organized at 300 universities across the nation. Catholic universities include Notre Dame, DePaul, Georgetown, Fordham, Villanova, Spring Hill, Tulane, Gonzaga, Santa Clara, and others. Students, faculty and alumni are seeking leadership.
Catholic teachings have already laid the groundwork for taking climate action. We simply cannot continue business as usual. Burning fossil fuels with reckless abandon will devastate creation and humanity. The bottom line Catholic universities must wrestle with is this: are their investments observing or undermining the Catholic mission? Far more important gains are at stake. A divestment wave among Catholic colleges could spark powerful change. Ideally, UD’s breakthrough decision will reinvigorate the dialogue in Catholic higher education and serve as roadmap helping others follow suit.
Amanda Hanley is co-Director of the Hanley Family Foundation. Her husband, George Hanley, serves as a Trustee of the University of Dayton. Originally posted on the Huffington Post here.