DU’s Board of Trustees recently denied the Undergraduate Student Government’s (USG) Resolution Nine, the second request since 2016 that the university divest from all investments associated with fossil fuels.
After months of deliberation, Chancellor Jeremy Haefner stated it was in DU’s best interest to remain invested for the moment and claimed that the community remains committed to sustainability. Such a conflicting statement warrants a deeper look into why DU will not divest and what it would mean for the University to do so.
It must be first acknowledged what DU has done to support sustainability. In an ongoing process, the university has reduced its carbon footprint by approximately 40 percent and is investing in a “green fund” focused on building sustainable technology (i.e., energy-efficient buildings). Newer buildings on campus are Leed-Certified. Additionally, less than 5 percent of the school’s endowment is invested in companies associated with fossil fuels. These companies claim to be making moves towards more energy-efficient production mechanisms, and two-thirds of endowment funds are utilized to provide student financial aid.
But there are concerns that arise. For one, DU cannot boast sustainability efforts while retaining a foothold in fossil fuels. It inherently conflicts with the university’s mission statement and core values and deteriorates its credibility. DU stands behind five values: respect, ethical behavior, quality, commitment to community and customer focus. Where is the ethical behavior and commitment to the community? Remaining invested in fossil fuels raises the ethical question: does the campus prefer profit over people or people over profit? Is their commitment greater to the student body and staff or to their investors?
If a university truly has its core values and mission statement at the heart of campus, then choosing whether or not to divest from fossil fuels should not be a question of if but when. I genuinely believe that if a business builds itself up around its virtues and continues to reference them regardless of the consequences, it will prosper. Universities should be acknowledged as businesses bound to corporate social responsibility.
It would be naive to believe divestment is a simple process. It is a nuanced issue, and it takes time to make adjustments to endowment funds. But just because it is challenging does not mean that it should not be completed.
Barely 5 percent of the endowment goes towards fossil fuels. Haefner referenced the statistic as a reason not to divest, but it supports the opposite. As of June 30, 2019, DU received $786,425,334 in endowments. 5 percent of that is approximately $39,321,2667. While losing any portion of investments is significant, such a number does not provide a feasible excuse. Looking at the big picture, losing that portion of money in the short-term can be mitigated and lead to long-term prosperity once invested in sustainable efforts.
Instead of fearing a loss of funds, DU should be proactive. There are many ways DU can reinvest. While most universities rely upon endowments for maintaining daily operations, they are noted as assets and broken into categories. DU has endowments allocated into global equity (45.7%), real estate (6.1%), fixed income (4.9%), mortgage & notes (.4%), cash equivalents (2.2%), private equities (14.7%) and alternative equities (26.0%). Instead of looking inward, DU could look outward and continue to diversify its portfolio by researching investment opportunities that promote ecological well being, strengthen the public and shift economic control.
At the moment, 1,186 institutions have divested, and approximately 178 of those are educational institutions. The majority of universities remain invested in fossil fuels, but DU has an opportunity to be at the forefront of this shift. Rather than follow what others are doing, we should become leaders in this movement.
