How Clark Can Truly Go Green
A Look at Inconsistencies Between Clark’s Message and Actions
Fossil fuel assets account for $37 million of Clark’s endowment portfolio. These traceable investments highlight the inconsistencies between the university’s message and actions.
With so much effort poured into university-sponsored climate teach-in events, one might believe that Clark is on its way to becoming a carbon-neutral institution tomorrow. Carbon-neutrality is actually slated for 2030 and while Clark proudly marches towards its sustainability goals, sadly, we remain financially invested in the future of fossil fuels.
In a report entitled “Fossil Fuel Asset Risk Analysis: Clark University Endowment,” B. Maiwand Akbari (‘16), Travis A. Dodge (‘17), and Miga Lee (‘15) were able to trace roughly 76 percent of the university’s invested endowment funds. Of that traceable 76 percent, “fossil fuel assets” account for 12.1 percent ($37.2M) of the endowment portfolio. These assets range anywhere from stock in crude oil businesses to drilling equipment to refinery plants.
Clark’s inflation hedging funds had the highest levels of investment in fossil fuel assets at 85 percent and 50 percent of the fund. Inflation hedging funds act as a safeguard against devaluing currency. Say the dollar begins to weaken, an inflation hedge fund invested in relatively stable commodities like gold or oil protect against a loss in buying power.
Fossil fuels have traditionally been considered a safe investment because for a long time prices remained on a relatively stable upward trend. Have you driven lately, though? This perceived trend no longer exists. Thanks to oil-speculation hangover and increased global oil production I no longer have to consider auctioning off my organs to fill my tank with regular unleaded. Good for me; bad for the boys in North Dakota, the environment, and Clark’s endowment.
According to the Uniform Prudent Management of Institutional Funds Act, which Massachusetts signed into law in 2009, “… assets should be invested prudently in diversified investments that seek growth as well as income…” Oil’s price volatility proves that an investment in fossil fuels is neither prudent nor progressive. Case in point; the two funds most heavily invested in fossil fuels at 85 percent and 50 percent respectively those funds lost 11.9 percent and 20.9 percent of their value in the fourth quarter of 2014 – dismal.
Now let’s take a step back and look at the cognitive dissonance of these investments. This university, which has won EPA awards for sustainability efforts, committed to increasing the amount of real food in its dining halls, and plans to be carbon neutral by 2030, is losing money by investing in assets that do irreparable damage to our environment. Financially and ethically, it makes no sense to remain invested in such dirty and violent commodities.
Twenty-six other colleges and universities have already committed to fossil fuel divestment with more committing every day. These institutions, unsurprisingly, haven’t closed their doors due to their new investment strategies. Whatever hits their endowments may or may not have absorbed from divestment haven’t phased these institutions.
We must not tolerate oil and other non-renewables any longer. Sustainability and green-energy isn’t just a passing fad. Nearly the entire student body, the faculty, and the administration understand this. So, for the sake of the University, and more importantly, our planet, we need to add our voice to the chorus of institutional dissent and say “no more” to dirty energy. Let’s demand full reinvestment away from detrimental and socially irresponsible assets.
First published in The Scarlet