University announces it will divest from thermal coal companies

By ALYSSA WOODEN and JACOB TOOK | December 12, 2017

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FILE PHOTO Some students criticized the Board’s decision to limit their divestment to thermal coal companies.

The University’s Board of Trustees voted to divest its endowment from thermal coal on Friday. The vote, which was announced in a statement on Tuesday, comes almost three months after the Public Interest Investment Advisory Committee (PIIAC) recommended that the University divest from fossil fuels.

PIIAC is a group of 13 undergraduates, graduate students, faculty and staff from across the University’s divisions. The recommendations were released in September following six years of campaigning from Refuel Our Future (Refuel), a student organization that has called for the University to divest from fossil fuels.

Refuel hoped that the University would follow PIIAC’s recommendations to “terminate all direct investments” from Carbon Underground 200 companies (CU 200). These companies are considered leaders in the fossil fuel industry and include fossil fuels aside from coal such as oil and natural gas.

Senior Atlas Elawad, the current president of Refuel, said that the Board’s decision came as a disappointment since it limited its divestment to only thermal coal companies.

“We are not satisfied with the decision made by the Board,” he said. “This was not what was recommended for them by PIIAC.”

Elawad criticized the school-wide email sent by University President Ronald J. Daniels, saying that it overemphasized the potential benefits of divestment.

“It’s really irresponsible for [the University] to spin it as any kind of step towards a robust divestment strategy,” he said. “It’s bare minimum at best.”

Kyra Meko is the president of Students for Environmental Action, a student group advocating for environmental justice. She agreed that the decision would not have any significant impact, noting that PIIAC described this act as “largely symbolic.”

“This decision minimizes divestment and maximizes good PR for the University. Thermal coal is already on its way out,” she wrote in an email to The News-Letter. “If the University is truly committed to being a leader to address climate change, then a symbolic divestment would apply to all of the University's holdings, not just the convenient ones.”

In their September report, PIIAC recommended that the University withdraw all of its cash investments in CU 200 companies and divest its direct and bond holdings as soon as contractually allowed. In its statement, the Board wrote that it agreed to implement these recommendations for thermal coal companies.

The University’s endowment is also held by several equity and hedge fund portfolios, which PIIAC recommended be redirected to focus on more sustainable projects.

In its statement, the Board explained that the University could not carry out this recommendation because these funds are too heavily tied up with those of other investors.

“The Board found, however, that PIIAC’s fourth recommendation is beyond the scope of its charter, and compromises the Trustee’s fiduciary duty to manage its financial assets,” the statement read.

Elawad criticized the Board’s statement, saying that they need to follow up on all of PIIAC’s recommendations.

“To say this is beyond the charter of PIIAC falls a bit flat,” Elawad said. “We want to see the reasoning behind these decisions as well as the members who are voting on them and their background.”

Junior Clarissa Chen, a member of Refuel, pointed out that because PIIAC is commissioned by the Board of Trustees, she expected them to follow the Committee’s recommendations.

“There’s a clear disparity between those who are on the Board of Trustees making these final decisions and those who are on PIIAC,” she said.

Chen and Elawad added that PIIAC’s recommendations were consistent with the University’s mission and, additionally, are financially responsible actions.

“The Board of Trustees is coming to a different conclusion,” Elawad said. “They’re clearly working with information that we don’t have, so we’re curious as to what that is and why it wasn’t released in the statement.”

Elawad also believes that the Board of Trustees could have been more transparent about how they reached their decision.

“Who is calling the shots?” Elawad said. “What personal interests do they have? There are so many members on the Board of Trustees who we don’t know.”

Chen explained that Refuel called for divestment because it would signal to other institutions that investing in environmentally unfriendly companies is unacceptable.

While she acknowledged that the Board meets in December, she was unhappy that the decision was announced during reading period when many students are busy studying for final exams.

“It is definitely strategic because [the University] knows we are pressed for time at this point,” she said. “This is another way our University is subversively suppressing student activism.

Meko added that she is not surprised by the timing of the announcement.

“The board meets in December and the University has had a tendency to release big decisions like the removal of covered grades at this time of year,” Meko wrote.

The University wrote in an email to The News-Letter that the divestment decision was announced following the Board’s meeting on Friday.  

“The timing of the announcement relates solely to the schedule of Board of Trustees meetings,” the email read. “The board’s meeting last Friday was long scheduled.”

The Board’s vote marks the third time the University is divesting its endowment from an industry. The University divested from companies in the then-apartheid-state of South Africa in the 1980s and from tobacco stocks and bonds in the 1990s.

In their email to The News-Letter, the University added that only three peer institutions — Columbia University, Stanford University and the University of Washington — have decided to divest from fossil fuels.

“This decision aligns Johns Hopkins with a relatively small group of colleges and universities that have made public commitments to divestment because of serious concerns related to the environmental and public health effects of climate change,” the email read.

Meko wrote that, though the University pushes for sustainability on campus through waste management and food sourcing, it could do more to be a leader in sustainability.

“The worst impacts of climate change will be felt disproportionately by disadvantaged people far from Homewood,” she wrote. “Hopkins should divest its large endowment from fossil fuels and show commitment to a carbon-free future.”

Although Refuel will be continuing its campaign for the University to divest from more than just coal companies, Elawad expressed gratitude for the students and community members who have supported Refuel’s efforts.

“We’re proud of the fact that student activism has been able to influence the University in such a powerful way,” he said. “We got the Board of Trustees to change the endowment solely based off a majority of student voices and input from the public. We wish we could say that we are proud of the Board of Trustees and the University as well but at this time we can’t.”

Sarah Y. Kim and Morgan Ome contributed reporting.

 

Correction: Kyra Meko was originally listed as the co-president for Students for Environmental Action. She is actually the president.

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