Protests over Pitzer College’s involvement with investment manager BlackRock have continued recently, with a resolution drafted by student protesters set to be submitted to Pitzer Student Senate Sunday.
The proposal calls for the college to divest from BlackRock, accusing the firm of using “unethical practices” and participating in the “climate crisis, migrant detention, mass incarceration, imperialism and weapons manufacturing.”
BlackRock is the world’s largest global investment management firm with over $7 trillion in assets, and currently manages a fund containing the college’s stock portfolio investments.
Among the student activists’ objections to BlackRock are its investments in fossil fuel companies and the GEO Group — one of the largest operators of private prisons in the U.S., which also operates a U.S. Immigration and Customs Enforcement processing center.
The college invested the entirety of its stock portfolio in a BlackRock fund in 2017, achieving 100 percent fossil fuel divestment and applying an environmental, social and governance screen to its equity selection process in the process, according to a press release.
The creation of the fund, which is a “major component of Pitzer’s $135 million endowment,” followed a 2014 announcement by the college that it would divest “virtually all” investments in fossil fuel stocks in 2014, making it the first private college or university in California to divest from fossil fuels, according to the release.
Representatives of the Students Demand Change Coalition sent the drafted resolution, which asks the college to reinvest with a different asset management firm that aligns “better with both institutional and student values,” to Pitzer’s student talk list Feb. 18 with a request for co-sponsors.
SDC has also objected to BlackRock’s 11.24% stake in GEO Group. It holds these GEO Group shares broadly via passive mutual funds and indexes, in which, according to CNN, stocks are not actively chosen by the asset manager.
In protest, SDC posted flyers with names of those who have died in detention in GEO Group facilities.
“Corporate greed has long sank its parasitic teeth into ‘higher education,’” the flyers read. “It’s time to remove money from death and detention and serve our communities instead.”
But college trustee Donald Gould told TSL via email that the resolution displayed “a basic misunderstanding of the nature of BlackRock’s business.”
“BlackRock does not own the companies in the industries cited; its clients do. BlackRock does not create the indexes its index funds follow; that is done by firms like S&P and MSCI. And it is BlackRock’s clients who decide which index funds to invest in, not BlackRock,” Gould said, citing Pitzer’s choosing the index fund in which to invest as an example.
“Had we instead chosen a fund focused on oil producers, it would likewise be Pitzer’s responsibility and not BlackRock’s,” Gould added.
SDC spokesperson Ngaya Swai PZ ’23 disagreed, calling Gould’s statement “very, very misleading” and “not really true.” Swai argued that BlackRock is a company that sells a product: in this case, index funds.
“It’s not fair to say that a company that makes a product is not responsible for how that product affects the environment, people of color and indigenous people just because they’re not the ones buying the product,” Swai said.
Gould acknowledged that according to some, BlackRock’s holdings may, “in some way,” contribute to the business that students expressed concerns about. But Gould argues that there is “no such thing as a purely good company or a purely good portfolio.”
“Every company is, directly or indirectly and to a greater or lesser degree, involved in one or more activities that some will find objectionable on environmental, social or other grounds,” Gould said.
SDC spokesperson Amanda Gómez PZ ’23 said it was “difficult to hear that coming from somebody who has so much power within the administration and within the board of trustees.”
While Gómez agrees with Gould that “there is no ethical corporation,” they argued that the college can “still attempt to adhere to Pitzer’s core values.”
“[BlackRock] goes against our core values of environment, sustainability and social responsibility,” Swai added.
The SDC argued in the proposal that BlackRock can shift “investments out of companies wrecking the planet,” and apply “maximum pressure to change company behavior.”
The company’s CEO, Larry Fink, recently announced that the company would, in fact, end some of its investments that “present a high sustainability-related risk,” like investments in some coal companies. It’s launching new initiatives “to place sustainability at the center of our investment approach.”
Gould argued that because BlackRock is the largest asset management company in the world, it should not come as a surprise that it owns stakes in companies that some might consider objectionable.
“It should not be surprising that BlackRock’s clients, in aggregate, are among the world’s largest holders of both the most and least virtuous (by whatever measure) companies out there,” Gould said.
Swai argued that because BlackRock is the largest asset manager in the world, the firm has an “added responsibility” to not support companies who they find unethical.
Swai is confident the proposal will pass the Senate.
“I’ve talked to many senators and almost all of them have given me a yes,” he said. “There’s a possibility of it being vetoed, and if that was to occur, that’s when protests would happen. We won’t just roll over because you vetoed.”
“If I thought this was not possible, I wouldn’t have continued working so hard on it,” Swai added. “But every single time like I dig deeper, I find it more and more possible that this is a reality that we can actually fix.”
Gould said the board of trustees is not considering replacing BlackRock as its investment manager, adding that BlackRock has helped Pitzer meet many financial obligations, including student financial aid, faculty and staff salaries and facilities.
“We view BlackRock as among the most progressive investment management firms in the Responsible/Sustainable Investment space today,” he said.
SDC plans to show up in force at the Senate meeting on March 8, according to Swai.
In addition to the Senate proposal, SDC has promoted a Change.org petition with more than 200 signatures as of Wednesday calling for Pitzer to divest from BlackRock, with a specific list of demands.
While the Senate proposal broadly focuses only on divestment from BlackRock, the petition takes up a list of demands drafted by the Latinx Student Union, including calls for measures to help the undocumented community on campus.
The group also organized protests over Parents’ Weekend on Feb. 14, including a painting on the Free Wall at Mead Hall depicting the Pitzer tree logo in red, signifying its roots being “soaked in blood” with text criticizing Pitzer for its connections to BlackRock.
“Pitzer respects our community’s first amendment right to free speech, and strongly disputes the content depicted on the free wall regarding BlackRock,” college spokesperson Anna Chang told TSL via email.
The Free Wall was also painted with criticism of Pitzer trustee and BlackRock vice chairman Robert Fairbairn in September 2019, again criticizing the company for its GEO Group ties.