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When we hear about divestments in finance class our professors are generally referring to companies selling assets or spinning-off divisions. But one group on campus is campaigning for DU to divest something else entirely; our fossil fuel investments.
Divest DU is sponsored by the Undergraduate Student Government Sustainability Committee (SUSCOM) but is a part of the international 350 movement. Their overall mission is to reduce global Carbon dioxide levels to pre-Industrial Revolution levels (calculated to have been around 350 parts per million). The current observed level is closer to 400 and the group’s leadership calls that cause for concern.
“Never have CO2 levels been so high in all of human history” explains club spokesman John Seydel, “it really is going to affect us all.” With global temperatures widely believed to be rising, more and more scientists and climatologists are beginning to back-up that claim. Even Secretary-General of the United Nations Ban Ki Moon has called on countries to act to curb their carbon emissions before the effects become irreversible.
350 has begun several different campaigns aimed at helping curb those emissions, one of them being the Divest campaign that is gathering momentum among students on campus. In a letter to Chancellor Coombe, the movement calls for DU to “immediately freeze any new investment in fossil-fuel companies, and to divest within five years from direct ownership and from any commingled funds that include fossil-fuel public equities and corporate bonds.” Similar movements have already had success at Stanford and Harvard Universities and the club hopes to replicate other chapters’ achievements’.
The connection may be hard to draw between DU and natural energy companies but most all major endowments hold some and debt in energy sector companies. In our case, those investments go towards increased scholarships, capital investments, and off-setting tuition hikes. How much, exactly, of our nest egg is invested in natural energy is unclear since the endowment’s annual report is only published for members of the board and contributors. This pattern is not uncommon and nearly all major institution’s endowments, which are generally handled by third party managers, include some natural energy component. Most people’s retirement accounts and pensions work in a similar fashion.
Big institutions do this for a good reason: the S&P 500 Energy sector rocked the S&P 500 benchmark in the past three year’s bull market and returned a whopping 170 percent to its investors verses the benchmark’s 70 percent.
However Divest DU believes that the stakes are too high to continue this investment strategy. As shareholders we are beholden to our long term return and not just our short term one. “We are here in school to invest in our future and we believe that the school should be doing the same” Seydel explains.
Much criticism has been leveled at similar movements in the past, like the South African divestments of the 1980s and the tobacco divestments of the 1990s. Though many economists agree that these divestments have little if any economic impact, they do send a clear message, which is exactly what Divest DU wants. “This is becoming a moral issue” stated club member Evan Swaak who made it clear that this is just one movement of a broader initiative to end fossil fuel dependence.
So far their movement has been remarkably collaborative and respectful towards DU’s administration. Nationally 350 is known for somewhat brash shows including students holding mock marriages of their faculty to oil tycoons or misting students with gasoline dew.
Not so at DU where Seydel, Swaak, Evans, and their colleagues have engaged faculty in dialogue and even had several personal discussions with Chancellor Coombe. “He is very amenable to our cause” Evans claims “but we acknowledge that who we are really trying to persuade is the board.”
Her reference is to the club’s May 21 audience with the DU Board of Directors during which they will present their case for divestiture. It will be a tough sell given DU’s direct ties to many in the energy community and an overall reluctance to sacrifice paltry returns from energy investments that have contributed to a large increase in scholarship awards in the past four years. Club leadership recommends the school invest in renewable energy firms over 350’s published list of the worst fossil fuel offenders.
Regardless of their ability to halt our energy investments, the group has been crucial to starting a dialogue on campus between natural energy’s stakeholders and big oil’s current shareholders. At least part of their battle has been won.
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