This week, Green Mountain College in Vermont became the fifth campus around the country to announce it will pull its endowment money from fossil fuel companies. Students on hundreds of campuses are calling on their colleges to take a stand on climate change by divesting from the oil and gas industry.
Now one college has come up with a price tag. Swarthmore College in Pennsylvania estimates fossil fuel divestment could cost its $1.5 billion endowment as much as $200 million in lost returns.
Students at Swarthmore have been stepping up the pressure to divest. A few weeks ago, a group called Swarthmore Mountain Justice stood before the Board of Managers and demanded the college take steps by fall to stop investing its endowment in fossil fuel companies.
“If the Board of Managers does not agree to this timeline, then we will intervene in business as usual,” freshman Nathan Graf told the Board, in a video students posted of the meeting.
Much of Swarthmore’s endowment is pooled with other clients’ money, says Maurice Eldridge, vice president for college and community relations. He says moving it could mean higher fees or lower returns, which could squeeze programs.
“Since our budget is dependent largely on tuition income and endowment income, this could be programmatically quite difficult,” he says.
Dan Apfel is with the Responsible Endowments Coalition. He says Swarthmore is making some false assumptions about divesting.
“There are active managers out there that are willing to screen out fossil fuels from their portfolio,” he says. “Those managers can perform as well as the managers that Swarthmore has in their portfolio now.”
Swarthmore says it cost the college around $2 million to divest from companies doing business in South Africa — over apartheid — more than 20 years ago.
Eldridge says the endowment is larger and more complicated today. Students say the costs of not dealing with climate change could be much higher than lost investment returns.
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