The Divestment Initiative Won’t Cut Into Your Financial Aid

Climate
change is the issue of our generation, and members of the Pomona College divestment
campaign have joined the fight. We’re increasing the momentum of the divestment
movement and have brought the issue to presentation in front of Pomona’s Board of Trustees. However,
it has become apparent that some students are skeptical of fossil fuel
divestment, voicing concerns over financial cost and real-world impact.

In a
recent op-ed titled “Finding Alternatives to Combat Climate Change Besides
Divestment,” two common criticisms were voiced: Divestment is solely
symbolic, and it will hurt the college’s endowment and therefore financial aid. But
these thoughts result from a misunderstanding of divestment and lack effective
solutions to the growing threat of climate change. Fossil fuel divestment is symbolic but also political—and
for that reason it is powerful, urgent and necessary.

Often
in the discussion of climate change, people talk of individual responsibility.
We can all reduce our electricity use, and Pomona can construct more
LEED-certified buildings. Solutions to climate change do require substantive
behavioral change. However, the options for meaningful change are currently
limited by the lack of options in a society dominated by fossil fuels, and the
urgency of this issue warrants more than isolated efforts.

The
goal of divestment is not to financially ruin fossil fuel companies, as that
would be unrealistic, nor is it only symbolic. Indeed, divestment symbolizes
that Pomona College, a progressive and scientific institution, will not condone
the growth of an industry that profits from climate change. It symbolizes
that such an industry cannot continue to exist. But divestment is also a
political movement with growing momentum across the world, embraced by
institutions from Syracuse University in New York to the Guardian Media Group
in the United Kingdom. It is a movement that will put necessary pressure on governments to
enact climate policy. 

President Obama recognizes divestment as a meaningful
tool to spur political change, urging institutions to “convince those in power to reduce our
carbon pollution … Divest.” Nelson Mandela recognized the divestment movement
for its contribution to the end of apartheid. Divestment has been cited as an
important agent in many successful movements.

The
Pomona campaign is passionate about divestment, not unconditionally, but
through means without negative financial impacts. Our mission is to pressure
the Board of Trustees to find affordable ways to divest. If that cannot be
done, we will seek other avenues for climate action. As the client of some of
the best investors in the world, and with the support of Pomona faculty in
the economics department, we are confident that divesting with minimal cost is
attainable. Don Gould, a Pitzer College trustee and owner of Gould Asset Management,
says that divestment is “very
low impact. If you take fossil-fuel companies out, you’re still very well
diversified.”

The
perceived cost of divestment at Pomona College, $6.6 million a year over 10 years, is based upon a financial analysis done in 2012 by Cambridge
Associates. This cost estimate is based on a narrow conception of divestment,
including the assumption that it would require immediate withdrawal. Pomona can
pursue a customized, gradual divestment plan that would not have to culminate
in 100 percent divestment for some time.

The
Cambridge report was also issued three years ago, long before today’s
widespread availability of high-performing fossil-free investment portfolios,
which have grown tremendously in numbers thanks to institutional demand and
pressure from students in the divestment movement. Finally, Cambridge issued a
statement this year that noted their willingness to work with clients to
divest, which can be found on their website. Cambridge’s position reflects the
recent proliferation of avenues for affordable fossil fuel divestment.

Even
if divestment impacted Pomona’s endowment, financial aid would not be cut. On
two occasions, President Oxtoby has stated that in the event of a reduction in the
endowment, financial aid would be the last program affected. Economic diversity
is a top priority of the college, and divestment would never change that. If we
thought that it would, we would not ask you, the student body, for your
support.

The
recent opinion piece opposing divestment proposed that Pomona fosters communication with fossil fuel companies to “set standards for sustainability.”
But if Pomona’s shares are so minor that divestment would have a negligible
impact, as argued in the article, then they would not be enough to give Pomona
a meaningful say in the practices of the industries. Even if Pomona did have a
say, fossil fuel companies’ practices cannot possibly be made “sustainable.” The very practices of a fossil fuel company, extracting and selling
non-renewable, planet-warming hydrocarbons, are unsustainable and will continue to be unsustainable. 

Divestment
is not an ‘easy way out.’ It is taking the strongest possible stance against
fossil fuel dominance. It is both taking the moral high road and contributing
to a movement that will only succeed if institutions like Pomona take part. We can
find ways to incorporate divestment into a financially feasible investment
strategy. Divestment poses an intellectual challenge, ready to be addressed
by the daring minds of our community.

Eliza Burke and Isaac Harris are first-years at Pomona College involved with the divestment campaign.

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