Subject: Why SCU Should Divest from Fossil Fuels: A Response from Fossil Free SCU
Dear Students, Faculty, Staff, Alumni, and other members of the Santa Clara University community,
In June of 2015, Michael Hindery, SCU’s Vice President for Finance & Administration, sent an email to all campus affiliates on the topic of fossil fuel divestment. This letter formally laid out the administration’s stance on the issue for the first time.
For the past two and a half years, Fossil Free SCU has advocated for the immediate cessation of new investments in fossil fuel extraction companies and complete divestment from these corporations within five years. The fossil fuel industry perpetuates an oppressive system that marginalizes the poor and disenfranchised communities our Jesuit values call us to protect. To fund this extractive economy is to perpetuate an unjust world in order to profit from the wreckage. In our many meetings with members of the Board of Trustees, Michael Hindery, President Michael Engh, CIO John Kerrigan and others, Fossil Free SCU members voiced their wide range of concerns in financially supporting the companies that contribute most to climate change.
The Administration’s current response to our call to divest, summarized from the letter, is as follows:
- Continuation of all current and future fossil fuel investments with no reduction commitments.
- A minimum $5 million investment in the Catholic Endowment Fund.
- $5-10 million investment in funds focused on sustainability and renewable energy sources, such as the recent Shared-X investment.
- Introduction of the Campus Sustainability Investment Fund.
While we support the new, sustainable investments, the University’s decision to not divest is unacceptable. In the following paragraphs, we respond to this decision.
A large part of the University’s decision rests on the fact that all of SCU’s fossil fuel investments are in commingled funds (no direct investments). The administration has maintained that individual investors cannot mandate that certain holdings be screened out of these funds. However, the University’s Socially Responsible Investment Guidelines already establishes a list of companies and industries to avoid, including those repeatedly cited for gross ecological violations or for harming human life. For this reason, we divested from South African Apartheid decades ago and Massey Energy in 2009. The fossil fuel industry, just like the focuses of past successful divestment efforts, violates many of the University’s preexisting socially responsible criteria. Therefore, it should already be excluded under our current investment policy. If we trust the Administration’s assertion that our commingled funds do not include any investments that violate our socially responsible criteria, implying they can sufficiently influence the composition of funds, why can’t fossil fuel extraction companies be included in our investment screens?
While fossil fuels are an undeniably lucrative short-term investment, they are also a stranded asset, meaning that they are overvalued in the long-term. In the near future, fossil fuels will be succeeded by renewable energies – the definition of fiscally unsustainable. Fossil fuel investments carry risk, as well. Take the recent example of Shell Oil, who after abandoning their plans for drilling in the Arctic lost billions of dollars. For reinvestment, Fossil Free SCU advocates for companies that have sustainable business plans, like renewable energies. In contrast to their oil, gas and coal counterparts, wind and solar returns are increasing at a growing rate, a highly profitable opportunity. We also strive to reinvest in funds that support cooperative, local, “living economies”, which helps to transition to a more just and democratic society.
This past November, SCU hosted “Our Future on a Shared Planet: Silicon Valley in Conversation with the Environmental Teachings of Pope Francis”, a conference focusing on the recent papal encyclical Laudato Si. The conference’s final panel (video recording available here) focused on the encyclical’s implications for Santa Clara’s mission, community, and social responsibility. The speakers discussed how a rapidly growing portion of the human family is being displaced by the negative consequences of climate change: sea level rise and flooding of ancestral lands, drought and resulting crop failure, and, as seen in southwest Asia, political instability and the rise of global terrorism. Climate refugees, and most people in the developing world, often do not have the resources or time to advocate for environmental justice. Consequently, as privileged members of the Western world, and as part of a wealthy, predominantly white Catholic institution, it is our duty to mitigate the effects of climate change for which we are most responsible. Santa Clara needs to show that it cares about the plight of our impoverished brothers and sisters when it actually matters, not only when it is fiscally convenient to do so. In this case, that action is to divest.
In agreement with the Administrative letter, the University has done well in campus sustainability. Our STARS report (Sustainability Tracking, Assessment and Rating System) is higher than many other schools in the nation. Yet, under the “Investment” category, we score a miniscule 0.76 points out of 7.0 points possible, a significant loss. Unfortunately, the University’s action on sustainability does not currently extend the boundaries of our campus to encompass the wider community of which we are a part. We are not a leader in climate neutrality, nor in sustainable practice, until we begin to take necessary progressive action like divestment.
Divestment from fossil fuels is a critical step in curbing irreversible damage to our planet, and showing through action, rather than through words alone, that Santa Clara University does not support the morals and practices of these corporations. By divesting, SCU will create an avenue for long term financial stability, return to its core values, and finally take its place as a leader among Jesuit universities in sustainable action and social justice. As Pope Francis writes, “Human beings, while capable of the worst, are also capable of rising above themselves, choosing again what is good, and making a new start.” It is time for Santa Clara University to begin that start.
Fossil Free SCU, a joint campaign by SCCAP’s BLEJIT program and the student-run GREEN Club.
To be part of the conversation on fossil fuel divestment, sign our petition, or to ask any further questions, please contact us at email@example.com or find us at fossilfreescu.wordpress.com and facebook.com/fossilfreescu.