The University Should Divest from Fossil Fuels
Blair LibbyTHE SANTA CLARAMarch 31, 2016
[dropcap]I[/dropcap]n January of 2016, we, Fossil Free SCU, released a response letter criticizing the university’s decision to not remove its investments in commingled funds that include fossil fuel-extraction companies.
Although the university committed to a small number of new, sustainable investments, it made no commitments to reduce its stock in fossil fuels, nor offer any transparency on the school’s portfolio. Divestment, we argue, is crucial to Santa Clara’s mission for a more “just, humane and sustainable world.”
Climate change is the greatest threat the world has ever known. Crop failure from droughts and rising sea levels are already leading to the displacement of millions of people, which causes political unrest and exacerbates conflicts in Southwest Asia. If you’re looking into how Daesh (formerly known as ISIS) created an extremist state so quickly, look no further than the impoverished, jobless, former wheat farmers of Syria who moved to the city.
Even the Pentagon identified climate change as an “immediate risk” to national security. Carelessly emitting greenhouse gases, which are derived from the burning of fossil fuels, will create a world where no human, or any other species for that matter, is safe.
The university’s Socially Responsible Investment Guidelines already establish a list of companies to avoid investing in, including those repeatedly cited for gross ecological violations or for harming human life. However, this protocol only applies to direct investments, while the other 73 percent of our investments in commingled mutual funds “cannot be screened by the university,” as explained by Santa Clara’s former Vice President of Finance and Administration, Michael Hindery.
This lack of oversight means that Santa Clara may also be investing in other industries that aren’t in line with its Jesuit values, including alcohol, tobacco, firearms and nuclear technology. If these circumstances are true, then it would directly contradict the university’s generalized statements regarding its socially responsible investment policies.
Nearly three quarters of our investments lack any sort of ethical considerations. In order to take conscientious action toward addressing the issue, the university must begin conversations with fund managers and enter into the growing world of ecologically responsible mutual funds.
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, the rapidly growing renewable energy sector will overtake the fossil fuel industry, making investments in oil, gas and coal a fiscally unsustainable decision. Fossil fuel investments also carry considerable risk.
Take the recent example of Shell Oil, which lost billions of dollars after abandoning its plans for drilling in the Arctic. In the past six months alone, the price of oil has been sliced in half, affirming the fossil fuel industry’s volatility.
Fossil Free SCU advocates for reinvestment in companies that have sustainable business plans, like those that produce renewable energy. In contrast to their oil, gas and coal counterparts, wind and solar returns are growing at an increasing rate, which presents a highly profitable opportunity.
We also advocate for reinvestment in funds that support cooperative, local, “living economies,” which helps to create a more just and democratic society.
Divestment from fossil fuels is a crucial step towards curbing irreversible damage to our planet, and showing through action, rather than through words alone, that Santa Clara does not support these corporations’ morals and practices. By divesting, Santa Clara 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 wrote in his encyclical Laudato Si, “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 to embody this principle and make new beginnings. To be part of the conversation on fossil fuel divestment, sign our petition, or ask any further questions, please contact us at fossilfreescu@gmail.com or find us at fossilfreescu.wordpress.com and facebook.com/fossilfreescu.
Blair Libby is a senior environmental science major.