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SRC does not recommend fossil fuel divestment

Last week, the Social Responsibilities Committee (SRC) revealed its decision regarding the Fossil Free Mac proposal that Macalester divest from fossil fuels. The SRC did not pass the proposal on to the Board of Trustees or the president, which would have been the next step towards approving divestment. Additionally, the committee issued a recommendation that the action to divest not be taken. The student group met with the SRC twice this year in order to advocate for its proposal.

The group received the news from a memo sent to President Brian Rosenberg from the SRC, which was then shared with members of Fossil Free Mac. The memo stated that the two main reasons that the SRC rejected the proposal were the potential financial consequences of divestment and the belief that the act, which they viewed as being largely symbolic, would fail to have an impact on the groups that students were targeting.

Members of Fossil Free Mac were upset about the decision, but plan to revise their proposal and keep working towards divestment. Members also say that they do not agree with the reasoning behind the SRC’s rejection.

In their memo, the SRC stated that they “felt that there is a significant chance that the requested action could have material negative consequences for the college’s investment performance and, by extension, reduce the income available for operations and financial aid.”

“We think it’s totally legit for them to be concerned and that they should interrogate this [proposal],” Fossil Free Mac member Jack McCarthy ’18 said in response to the SRC’s worries.

The SRC also expressed skepticism over Fossil Free Mac’s claim that divestment would not have financial consequences for the endowment.

“The committee felt that the case had not been made for a neutral or positive investment result if the proposed action is taken,” the memo stated.

In addition to financial concerns, the SRC also worried that divestment might not make an impact on the audience that Fossil Free Mac hoped to reach.

“The goal of working through the endowment in the hopes of changing policy was seen as not as effective as more direct measures that the institution could take,” SRC student representative Sam Doten ’16 explained. “Furthermore, the impact of divestment measures on policymakers is very hard to measure. It’s very difficult to know if those changes are a result of our divestment.”

Students who have worked on the campaign refuted claims that divestment would not change the current power of the fossil fuel industry.

“If we want to avoid the worst of anthropogenic climate change, you need to devalue fossil fuel companies,” McCarthy said. “That means divesting.”

“The idea is that the companies that we’re targeting have the largest fossil fuel reserves, and if they burn these reserves, science has proven that we’re going to raise the temperatures of our earth above a safe limit,” campaign member Sonia Pollock ’15 explained.

The seriousness of climate change does not appear to be an issue that Fossil Free Mac members will have to convince committee members about. The SRC expressed in the memo that it “would like to reiterate the concern that the committee members have about the climate change issue.”

“The decision was more one of institutional health than of personal stances,” Doten furthered.

“[The committee] seemed really receptive to our arguments around morality and ethics,” Fossil Free Mac member Giulia Girgenti ’18 said. “They were really open to that and receptive to that, but we have to address their financial concerns, and we think revising our proposal will do that.”

One of the concerns that the SRC raised in their memo revolved around an estimation that, had the school not been invested in the 200 companies that Fossil Free Mac members propose divesting from, the school’s returns on investment would have been $21 million less over the past ten years.

Fossil Free Mac finds one major flaw with this rationale.

“That [estimation] was looking at if we had divested and didn’t touch the money. If we just pulled this out of the pool of money, we would be $21 million poorer, but that’s doing no reinvestment. That’s just taking that money out. Those same types of returns are totally possible with other types of investments,” McCarthy explained.

The group does intend to include a plan for reinvestment in its revision of the proposal.

“We’re going to incorporate a reinvestment strategy into our proposal that’s focused on Socially Responsible Indexes and renewable energy companies and infrastructure,” Girgenti said. “We’re gathering information on how those investments would be profitable to the college and we don’t think they would lead to any negative financial consequences.”

The group acknowledged that a shortcoming of its original proposal was not including enough emphasis on reinvestment. “I think because we didn’t have a reinvestment plan, it was easy for them to assume we were going to lose a lot of money through this,” campaign member Sophie Downey ’18 said. “I think if we come back with solid research that says that we’re not going to lose a lot of money, and that we can reinvest it in [a socially responsible] way that might [yield even larger returns], it will really help us.”

The response from the SRC does not mean the end for Fossil Free Mac.

“Why would it be?” McCarthy asked. “We’re not just going to give up.”

Members of the campaign are uncertain of whether or not they will meet with the SRC again.

“We really just have to figure out what our options are for moving forward,” Pollock said. “We have to see what paths we can take.”

While many members of the Fossil Free Mac campaign that have been a staple of the movement since it began at Macalester two years ago are set to graduate this May, this past year has seen an influx of younger students who will carry the torch in the future.

“I feel like I’m leaving [the campaign] in good hands,” Pollock said.

May 1, 2015

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