Curbing Carbon Emissions Through Divestment: Will Georgetown be Next?
By Hampden MacBeth, Staff Contributor
In response to climate change concerns, fifteen higher education institutions worldwide have divested from the fossil fuel industry. Students, faculty, and staff at Georgetown are urging the university to be next.
Georgetown University Fossil Free (GUFF), a student-run organization based in Georgetown’s main campus, recently reached out to Law Center students and faculty to increase support for University divestment from major carbon emitting companies. On October 2, 2014, leaders of the undergraduate campaign traveled to the Law Center to discuss GUFF’s divestment proposal and to explain the process for securing divestment. The meeting also included a call for Law Center students and professors to sign a petition in support of divestment.
“The proposal…calls on the University to divest its holdings from the 100 companies with the largest holdings in proven coal reserves…”
Before it can pursue a vote in front of the University’s Board of Directors, which has final decision-making authority about how to invest the University’s endowment, GUFF must first secure a vote on its proposal by Georgetown’s Committee on Investments and Social Responsibility (CISR). CISR is an advisory board that makes recommendations to the University’s board on issues related to socially responsible investment.
The proposal, released in August, calls on the University to divest its holdings from the 100 companies with the largest holdings in proven coal reserves and the 100 companies with the largest holdings in oil and gas reserves. The 100 largest coal companies include Coal India, Anglo American, and China National Coal. The 100 largest oil and gas companies include Gazprom, PetroChina, ExxonMobil, and BP.
GUFF has worked with CISR for more than a year to understand the Committee’s concerns with divestment and has made some modifications to the final proposal. Most notably, GUFF has offered to work in conjunction with the Board in carrying out the divestment over a period of three year if the Investment Office, which manages financial assets for the endowment under the fiduciary oversight of a subcommittee of the Board of Directors, deems a full and immediate divestment “too sudden and great a burden.” A tranched divestment strategy could, for example, provide for divestment from the top 20 companies in the first year, the following 50 in the second year, and the remaining companies in the third year.
“In accordance with its Jesuit tradition of social justice, Georgetown University must divest from companies that are propelling global climate change.”
If the University agrees to move forward with GUFF’s proposal, Georgetown will become the fifteenth higher education institution in the world to divest from carbon investments. It will join other top universities, such as Stanford, which pledged last May to divest from the top 100 coal companies.
In accordance with its Jesuit tradition of social justice, Georgetown University must divest from companies that are propelling global climate change. Poorer nations are at a strategic disadvantage to adapt to the extreme weather patterns brought on by climate change. Additionally, low-income and minority communities in the United States disproportionately suffer the negative health consequences of living near major sources of carbon emissions.
Divestment is also in the financial interest of the University. Recent studies indicate that broad-based investment funds sans fossil fuel investments have performed better than investment funds that include fossil fuels. Moreover, investment in carbon-polluting companies will generate increasingly poor returns as the global economy accelerates its shift towards a low-carbon economy.
The weakening of political and legal frameworks for the fossil fuel industry also makes continued investment in carbon-heavy companies a poor financial decision. The enactment of carbon tax regimes in Japan, India, and several Western European countries, combined with IMF Chief Christine Lagarde’s call for governments to implement similar regimes and to cut fossil fuel subsidies, suggests that administrative support for carbon is diminishing. Additionally, the harm caused by climate change-instigated natural disasters may increase the frequency of lawsuits against the fossil fuel industry.