On April 19, the Pomona College Committee on Social Responsibility officially recommended that the Board of Trustees divest Pomona’s separately managed funds from fossil fuels within five years and research the mechanics of divesting from its commingled funds within the next six months. Uncertainty about the consequences of divesting from the college’s commingled funds, which make up the bulk of the endowment, motivated the distinction made by the recommenders.
The committee, which advises President David Oxtoby how to vote in shareholder meetings, voted to pass four resolutions concerning divestment, which it shared with the Board the same day.
According to Pomona physics professor Thomas Moore, the nonvoting convener of the Committee on Social Responsibility, the committee considered the potential cost to the school before writing the four resolutions. But the effects of divestment are extremely uncertain, and Moore said the committee voted on the resolutions knowing that divestment’s price—or gain—could not be calculated.
The second resolution recommends that the Board of Trustees divest the college’s separately managed funds within five years. In the third resolution, the committee has requested that the Investment Committee of the Board of Trustees prepare a report that will estimate the effects of divestment from the commingled funds on the Pomona endowment within the next six months. The resolution acknowledges that there will be some uncertainty in the estimate and, as summarized by Moore, asks that the Board “estimate not only the losses and gains, but the uncertainties in those estimates.” The second resolution passed with five of the eight members voting in favor of it, while the other three abstained due to limited available information on the subject. The third resolution passed unanimously.
Separately managed funds include only Pomona’s money and are managed directly by the school. The commingled funds, managed by outside fund managers, account for about 92 percent of the endowment, and they usually include money from a variety of colleges, universities, and other institutions, making Pomona’s potential divestment from these funds more complicated.
Moore said that money managers may respond to large groups of institutions asking to divest but that Pomona’s divestment alone will not make a large statement to money managers since Pomona’s money would comprise a small percentage of the commingled fund.
“In the commingled funds, we cannot simply request that the fund manager divest because the manager is responsible to many other institutions, not just ours,” Moore said. “In order to divest, we would probably instead have to move our investments out of these commingled investment instruments altogether, at some cost to the college. That is part of what we are asking the Board to investigate [in our recommendations].”
The committee asked the board to determine how best to “maximally reduc[e] its investment exposure to fossil fuel companies in the commingled funds” in its fourth resolution, which also passed unanimously. The committee suggested possibly working with other institutions, such as colleges and universities, to divest as well in order to make a greater impact, but the resolution does not directly recommend that the Board of Trustees divest the commingled funds.
The first resolution, passed unanimously, affirmed that climate change is “a crucial issue of grave and urgent moral import and recognizes that divestment in fossil fuel companies is a means to express our concern about the negative implications of climate change both for our planet and for this college.” The resolution also states that fossil fuel divestment is a means of communicating Pomona’s care for the environment to the greater community and that “divestment is consistent with the values of the Pomona College community.”
The committee hopes that the early date of their vote will give the board adequate time to review the recommendations before the May convening, though Moore said he would not be surprised if the Board requires more time to respond. The original committee voting date was scheduled for Wednesday, April 17, but was delayed due to the absence of a committee member and lack of written resolutions.
Moore said he believes Oxtoby and the Board will take their recommendations “very seriously,” as they have in the past.
According to Teresa Shaw, Special Assistant to the President, the board has yet to discuss the matter.
The recommendations followed a student vote in support of a resolution to divest, which passed with 78 percent approval during school-wide elections ending April 9. The Committee on Social Responsibility is composed of three Pomona faculty members, two staff members, and three students.