Divestment Through the Ages

The ideal college is “a college imbued with that kind of democratic spirit that cooperates for the common good with all the agencies of social progress; a college with a view of its responsibility that is not shut off by campus walls . . . a college that with all its idealism, makes daily, practical contact with the many sided life of the city and state, here and now; a college that is changing because it is living; that looks forward oftener than backward, yet seeks the wisdom of organized experience to light the path ahead, thus supplanting the blind guidance of tradition by the safer guidance of scientific insight.”

— William Trufant Foster, first President of Reed College

Students’ struggle to effect social change through Reed College and its endowment is not new. In the 1980s students fought to have the college divest from South Africa and last year students continued to fight for social change and urged Reed to divest from fossil fuels.

Igor Vamos ’90, chosen to give their commencement address by the Class of 2014, announced that the College would completely divest its $500 million endowment of fossil fuels. Reedies rejoiced over the good news — what many students campaigned for and believed in —  and announced it to their friends and family online. But just hours later the Reed community received an email dashing its hopes of divestment. Vamos’ culture-jamming political activism group, Yes Men, had planned the prank with Fossil Free Reed.

“He came to our group and said, ‘we want to do a prank at commencement and we want it to be surrounding the theme of divestment, what do you think we should do?’” says Kayla Good ’17. “‘They had the idea of announcing divestment and we were totally on board and excited about it. It was mainly their planning and they told us what we needed to do.”

Two months later, Chairman of the Board of Trustees Roger Perlmutter ’73 gave the official response on the behalf of the Board. They decided against divestiture and — unlike in the 1980s — declined to even take steps towards divestment.

The most recent report of the Intergovernmental Panel on Climate Change (IPCC) made clear that humans are changing the climate but that quick and decisive action is both necessary and possible. “There is a myth which is shared unscientifically and uneconomically that climate action will cost heavily but I am telling you that inaction of climate action will cost much, much more. Climate action and economic growth are two sides of just one coin,” said UN Secretary-General Ban Ki-moon at the launch of the ipcc report in November.

It is a widely held understanding that humans are the cause of climate change and that our current rate of greenhouse gas emission is unsustainable.

Supporters of divestment argue that, like with the anti-apartheid divestment movements, institutional investors will draw attention to the gravity of the issue, bring the college in alignment with the ethical and moral right, and if enough institutions act similarly, allocate capital in a manner more consistent with the long-term needs of the climate. The need to protect freedom of thought, institutional and political neutrality, and the College’s financial security concern many opponents. A survey by Fossil Free Reed this term found that while most respondents were in support of divestment, there was a lot of concern about the potential impact on financial aid.

Students Take Eliot

Reed is not alone in this fight for divestment nor was it alone in the 1980s during the campaign for anti-apartheid divestiture. Students and faculty around the country demanded that their colleges and universities divest their endowments of companies doing business in South Africa. Reverend Leon Sullivan, a social activist, in 1977 outlined seven principles (the Sullivan Principles) for corporations to commit to in order to promote equality of races in the face of the apartheid system of South Africa at the time.

Students at the Reed formed the South Africa Concerns Committee (SACC) in February of 1985, an organization that “devoted itself to raising consciousness on the problem of apartheid, and the issue of divestment,” as Tarso Ramos ’93 wrote in The Quest. With the support of the Senate, the sacc brought their request for divestment to the Board. Students occupied President Paul Bragdon’s office for a weekend in November while he was away for an alumni function.

It wasn't just the students fight, faculty also thought it an important issue, Professors David Groff (history, 1976–87) and Allen Neuringer (psych, 1970–) polled the faculty on their support for divestment. Less than half responded, but of those who did, 94% approved. As a whole, however, when the faculty later voted, they were against divestment. The Quest reported that Professor Groff said “I think it’s unfortunate that so many of my colleagues feel that the faculty as a faculty should not take a stand on this issue.”

In January of the 1986, President Bragdon, standing on the steps of the Vollum College Center, announced the Board’s decision that the College would not “buy or hold investments in businesses owned or controlled by South African interests, financial institutions making loans to the government of South Africa, and companies which do not support and do not demonstrably implement the Sullivan Principles.”

It wasn’t enough. According to The Quest, the adoption of the Sullivan Principles did not change Reed’s investment portfolio. The change was in name only and the students were not satisfied.

Chris Lydgate ’90 and Sandeep Kaushik ’89 reported in The Quest that Christopher Phelps ’88 started another occupation during President Bragdon’s announcement of the decision: “As I speak,” said Phelps, “part of our group has begun an indefinite occupation of Eliot Hall.” This second occupation ended after six days once the Trustees agreed to create a study committee including students and faculty.

Ultimately, the Trustees did not divest the College of all companies doing business in South Africa.

Fossil Free Reed

Although the students and faculty have changed since the 1980s, the Board’s response to divestment remains. In March of last year, a Reed Union on climate change was held. Fossil Free Reed emerged as a result of the dissatisfaction of Austin Weisgrau ’15, Maya Jarrad ’14, Salish Davis ’15, Shannon Smith ’14, and Kate Jentoft-Herr ’16 with the Union. In a clear and reasoned letter to the Board of Trustees, the group went on to demand divestment. They wanted Reed to stop new investment in the 200 largest fossil fuel companies and to divest the existing holdings within a decade. Furthermore, they wanted the College’s Investment Responsibility Policy to be amended to include ethical considerations, and finally requested an annual report of “ethically controversial assets” with justifications of their holding. They charged the Board to consider honor in their investments.

The commencement prank served as as shock to the community like the occupations of the President’s office in the 1980s. It forced the community to engage with the issue of divestment in a way it had not before, as a real possibility, something that could be attained with persistence and commitment to principles. The fake announcement revealed that the Reed community at the commencement — students, faculty, parents — were overwhelmingly in support of divestment. In a press release later that day, President John Kroger wrote, “we appreciate the robust and far-ranging debate that this prank will continue to spur.”

But the Board was not swayed by the support of the community. Roger Perlmutter ’73, the chairman of the Board, emphasized their stance on the need for institutional neutrality as it “provides the best protection for freedom of inquiry and expression” in his response to Fossil Free Reed. Together the trustees decided that divestment — for many reasons — did not make sense. They agreed, however, to “provide more information about the endowment to the Reed community,” and to discuss alternative methods of reducing Reed’s carbon footprint. Thus far they have not made these data about the endowment available.

Stanford & the Claremonts

While the Board of Trustees of Reed College did not take any steps towards divestment, the Stanford University Board of Trustees agreed to a partial divestment scheme involving divesting their $18.7 billion endowment of coal mining companies. John Hennessey, President of Stanford University acknowledged that “moving away from coal in the investment context is a small, but constructive, step.” Kayla Good ’17, speaking on behalf of Fossil Free Reed, said that Stanford’s campaign was “really inspirational” and that it’s “huge that a school with that large of an endowment has divested from coal.” The highest profile school divestiture to date, Stanford’s divestment still could be construed as a token way of quelling the demands for climate action.

Two members of the Claremont consortium have taken differing stances on appropriate institutional action in The Chronicle of Higher Education. Pitzer College, a school known for its sustainability and commitment to the environment, committed to divesting its endowment “of substantially all fossil-fuel–company stocks by the end of 2014” said College President Donald Gould. “It was not a decision made lightly, but one that we felt was a key step in more fully aligning the college’s action with its mission and values.” He further argued for the “moral consequence” of divesting of fossil fuel stocks: “the academy has a duty to educate not only its students but also society at large.” David Oxtoby, President of Pomona College, argued that “symbolic actions have their place. But at colleges and universities, our first goal is to educate students to be skeptical about simple claims and to weigh competing values. Some schools see themselves as effectors of social change while others uphold institutional neutrality to enable their students to effect change themselves.

Reed’s Role

Today, Reed falls into the latter category. The prank “put Reed on the map in terms of schools that are getting into divestment” says Good. Fossil Free Reed is expanding their mission and changing their name to DivestReed to reflect their broadening horizons. “We’re looking to expand beyond fossil fuels right now” and want to “build relationships with other social justice groups and see how as Divest[Reed] we can further their goals.” To them, “gaining student support for divestment is the best way to go about it . . . . The way the investment policy is written it’s very important for there to be universal student support.”

Still, DivestReed believes they have a chance at fossil fuel divestment. “There are a few trustees who might support divestment if it was an easier process. And it is a messy, difficult process.” Reed’s complex endowment structure and use of hedge funds makes it difficult for the College to discuss its holdings and makes divestiture from individual companies more difficult. And the Trustees must take donors’ expectations into account. Lorraine Arvin, Treasurer and Vice President for Finance and Administration, stated that Reed “is fortunate to have the large endowment that it does, and has a responsibility to the college, and to the donors who contribute to the endowment, to maximize its growth.”.

In their upcoming Reed Union, DivestReed hopes to spur discussion on political and institutional neutrality. They hope that with enough student support, they “could try to at least pressure the trustees into being more transparent” in the College’s holdings.

The Union may also provide a forum for faculty involvement, something lacking from this round of divestment talks. Their silence thus far may be a result of faculty attempting to allow students breadth of thought. But there are students who would welcome their perspectives and knowledge in the pursuit of a solution to the pressing problem of climate change. This year, the Environmental Studies Junior Seminar will look inward on campus and examine energy use at Reed.

Perhaps it was our faculty and students working together to find solutions to larger-than-Reed issues that President Foster envisioned when he proposed “a college that with all its idealism, makes daily, practical contact with the many sided life of the city and state, here and now.”