Student activists have rekindled the Claremont Colleges’ fossil fuel divestment movement this semester and are focusing their attention on pressuring Pomona College to divest its endowment from fossil fuel interests.
Students in Pitzer College’s “Energy and Humanity: Past Present Future” class started Divest Claremont Colleges in September to push for Pomona’s institutional divestment from fossil fuels, or withdrawal of school investments from fossil fuel corporations, according to Julianna Diebel PZ ’23.
Student activism helped persuade Pitzer College to divest its endowment from fossil fuels in 2014.
The student movement calls for the board of trustees at each of the 5Cs to “announce their intention to institutionally divest from all companies involved in the extraction of fossil fuels,” according to the group’s petition.
So far, Divest Claremont Colleges has focused on Pomona, “but we hope that as more students at CMC, Harvey Mudd and Scripps join … we can begin working on the other colleges,” says Divest Claremont Colleges’ “Nuts and Bolts of Divestment” document, written by Malcolm McCann PZ ’21 and other student leaders.
“I think it’s time to divest … Pomona should be a leader, not a follower.” – Alex Hall PO ’93, Director of UCLA’s Center for Climate Science
“Right now, we’re just focusing on Pomona,” co-leader McCann said. “If we get one of the most influential colleges to divest, it will help facilitate the conversation better than if we disperse.”
The petition, published Oct. 17, has been signed by over 450 students, faculty, trustees, alumni and community members as of Nov. 1, and has support from director of UCLA’s Center for Climate Science Alex Hall PO ’93, the keynote speaker at a 5C United Nations Day celebration Oct. 24.
“I think it’s time to divest,” Hall said. “Pomona should be a leader, not a follower.”
McCann said the group aims to secure Pomona’s divestment by April 2020.
“By owning part of a fossil fuel company, Pomona is complicit in their actions,” McCann said.
Representatives from the group met with the Pomona President’s Advisory Committee on Sustainability on Nov. 12, according to Pomona sustainability assistant director Alexis Reyes.
Reyes declined to comment on divestment at Pomona.
Cambridge Associates, a private investment firm that manages Pomona’s $2.3 billion endowment, previously predicted a loss of $485 million over 10 years to Pomona’s operating budget if Pomona were to divest at the time, prompting then-president David Oxtoby to oppose divestment, TSL reported in 2013.
Pomona’s current Chief Investment Officer Dave Wallace said divestment is still impractical because 90 percent of Pomona’s endowment is in “commingled funds,” which include shares of various different corporations — including, but not limited to, fossil fuel companies — and in which Pomona’s money is pooled with other entities’ and managed externally by hired private asset managers.
Returns on Pomona’s investments provide 45 percent of Pomona’s operating budget, according to treasurer Karen Sisson. These returns are the largest source of Pomona’s revenue, unlike the other Claremont Colleges, which are primarily funded by student tuition and private contributions, according to their 2018 audited financial statements.
McCann said the group is pushing for Pomona investors to seek fossil fuel-free options within their commingled funds.
“We’re asking them to go to the fund managers and actually ask,” McCann said.
Cambridge Associates works with mission-driven investors to build and implement impact portfolios, according to its website, but it’s unclear if they’re fossil fuel-free.
Pomona President G. Gabrielle Starr told the coalition in public office hours Oct. 8 that the college could not divest from these commingled funds, according to McCann.
Starr’s office did not respond to TSL questions regarding divestment.
Divest Claremont Colleges is also targeting Pomona’s investments that aren’t in commingled funds — which include bonds, donor-restricted funds and funds directed by the board of trustees, according to Wallace.
Sisson said using Pomona’s endowment as a “policy tool” — instead of focusing on getting the highest-returning investments — could put need-blind admissions and need-based financial aid at stake. She said Pomona should focus on other sustainability goals instead, such as minimizing jet travel and buying more environmentally conscious academic materials.
“We see not divesting as an even worse political statement,” McCann said. “We should be stigmatizing the fossil fuel industry … climate change should totally reorient how we look at the world and the power structures in our world.”
Sisson said the investment office considers investing in funds that factor in the environmental, social and governmental impacts of their investments — which are often called “ESGs” and are generally fossil fuel-free — especially when they are more profitable for the endowment.
Wallace said the investment office partially invests in ESGs, but “our primary consideration with any new investment is its ability to generate the best possible risk-adjusted return to help fund the college’s budget and enable Pomona to fund its institutional goals, including carbon neutrality.”
According to previous TSL coverage, Pitzer invested $58 million of their $135 million endowment in 2017 into an ESGs index fund launched through private asset management firm BlackRock.
“We do not feel the divestiture has had a negative impact on performance due to the variety of investment choices available today,” Pitzer vice president for finance and administration and treasurer Laura Troendle said in an email to TSL.
Within the externally managed commingled funds, Sisson said some investments span as many as 14 years and include fines for withdrawing early, making immediate divestment difficult.
Sisson added that “we don’t represent a large enough share in some of those funds to make a difference” on the funds’ investment practices.
Claremont McKenna College’s and Harvey Mudd College’s spokespeople did not specifically respond to TSL’s questions about investment in fossil fuels and ESGs. Scripps College assistant treasurer Diane Holmes did not specify whether fossil fuels are taken into consideration in managing its investments in commingled funds.