Should Hamilton Divest From Fossil Fuels?
Hamilton welcomed a panel of four experts from diverse fields Monday to discuss local efforts on the Hill to combat the effects of climate change, in a debate titled Should Colleges and Universities Divest from Fossil Fuels? Participants were the Director of Investment Risk Management at the University of Michigan Rafael Castilla; Associate Analyst for 350.org Victoria Fernandez; National Association of Scholars Research Associate Rachelle Peterson; and Katelyn M. Kriesel, a financial advisor for Koenig & Selzer Asset Management Group and president of Syracuse Sustainability Enterprises.
Divestment from fossil fuels has been considered at Hamilton before. A resolution that would seek to remove companies involved in the fossil fuels industry from the college’s endowment portfolio was passed by the student assembly in December 2013 with support from a number of faculty and staff. After nearly three months of engagement with involved students, faculty and staff, the administration announced its disinclination to undertake divestment in March of 2014, citing many of the same doubts that were expressed by Castilla and Peterson Monday, the two participants in the debate in opposition to the divestment movement.
Divestment, argued Peterson, does not fundamentally affect the finances of targeted companies, rendering it economically toothless as a method of direct emissions reduction. Additionally, she claimed, making moral claims against oil and traditional energy companies is dubious, as she argued that morality ultimately lies with the individual consumers of cheap energy, not with the systems and institutions that produce it. “Basically this is saying that the industry is to blame and you’re off the hook,” she said, adding that “it’s a bit of a convoluted moral calculation… it’s like blaming Dunkin Donuts for your addiction to coffee.”
Peterson also argued that, contrary to the claims of proponents of the divestment movement, the net effect on a given institution's portfolio of divestment can be largely negative. This echoed the primary argument issued by Hamilton Trustee Investment Committee Chair Henry Bedford in his 2014 letter announcing the committee’s dismissal of divestment; that the ultimate goal of Hamilton College, namely providing students with the best possible education, is best served by preserving and maximizing investment return on items within the endowment portfolio.
These claims were contested by Kriesel and Fernandez, who argued for the financial viability of divestment and the moral imperative for such action, respectively. Kreisel, a financial investor specializing in socially responsible investing, stated that “we have two groups that we have to make happy, one who wants their values reflected in the portfolio, and one who is interested in returns on investments.” To achieve this, she said, for any given investment that would constitute a portion of the endowment portfolio both a quantitative and a qualitative analysis must be undertaken. Citing a financial analysis of socially responsible mutual funds published by Morgan Stanley, Kriesel claimed that, on average, socially responsible funds were as profitable or more profitable and less volatile than the market average. “Divestment is not the only way to make one’s opinions known,” she said, “but it is one way.”
The debate was co-sponsored by a number of on-campus organizations and clubs, including Hamilton Divests!, Hamilton Environmental Action Group, the Alexander Hamilton Institute Undergraduate Fellows, the Hamilton College Democrats, the Hamilton College Republicans, the Environmental Studies Program, the Government Department and the Dean of Faculty Office.