Fossil Free Mac still in meetings with the SRC over divestment proposal

On Tuesday morning, members of Fossil Free Mac met for the second time this semester with the Social Responsibilities Committee (SRC) to discuss divestment. While this meeting was originally intended to produce a final decision by the SRC, the complexity of the issue lead to another meeting being scheduled to continue discussion. The seven Fossil Free Mac representatives in attendance on Tuesday fielded questions asked by members of the SRC and defended their proposal that Macalester divest its endowment from the 200 companies with the highest fossil fuel reserves.

The meeting came days after Fossil Free Mac members Sonia Pollock ’15, Rick Beckel ’15, Andrew Gage ’15 and Marlys Mandaville ’15 were awarded Macalester’s Ann Bolger Vision award. The award is given in recognition of students who work to bring about positive organizational change at Macalester.

The group has been pushing the school to divest for two and a half years and hopes to meet with the Board of Trustees, who will have the final say, by the end of the year.

Before meeting with the board, though, the SRC will work with the students and then pass their recommendation on to President Brian Rosenberg. Rosenberg will decide whether the proposal should be approved, denied or moved to the Board of Trustees.

During the Tuesday meeting, members of the SRC questioned whether divestment would harm the school financially or create a slippery slope when it came to student groups wanting to use the college’s endowment to achieve social goals or make statements.

“I think the big question is, and what makes this proposal different from many we’ve heard, is the financial risk. A recommendation to the board about how our endowment is invested does carry some potential financial downside,” SRC member and Director of Financial Aid Brian Lindeman said. “I think if I were to recommend an action that caused that kind of risk, I’d need to see a really bright line between that kind of a risk and impact.”

Students advocating for divestment reiterated that they would like to see a feasibility study done by an unbiased source.

“I think it’s important to note that there are a lot of competing studies out there about what it would mean for an endowment to be divested,” Fossil Free Mac member Andrew Gage ’15 added. “We want a third party to do the analysis because we feel like there might be some bias in the results of the analysis.

Results of studies done by 350 [an environmental organization] might make divestment seem a lot less of a financial burden for schools, whereas a study done by the Independent Petroleum Association of America (IPAA) is obviously going to make divestment seem like a really bad idea.”

Members of the SRC also raised concerns that divesting might conflict with institutional values other than sustainability.

“We talk about how we want to be accessible, how we want to provide financial aid and how we want a more economically diverse community,” committee member Mary Montgomery said. “As an institution, we end up having competing values when we decide to take an action that drives us in one way. It’s not just economics, it’s real potential trade-offs to the values that we hold here.”

SRC members reaffirmed that they are willing to continue working with students and that they hope to be able to accomplish meaningful change together.

A handful of other schools have symbolically divested from fossil fuels. They have committed to not holding direct investments in fossil fuels, while still maintaining a diverse portfolio which may or may not be invested in fossil fuel-intensive companies. This is a path that Macalester is unlikely to follow.

“We take this really seriously. We don’t want to do something that’s just symbolic that really doesn’t do anything,” SRC Chair Chris MacDonald-Dennis explained. “We don’t want to do something just so we can pat ourselves on the back.”

While a change in the endowment like the one that Fossil Free Mac is advocating for would be something new, it is not the first time that students will have pressured the school to change investments.

Macalester has used purposeful investment of its endowment to achieve social goals in the past. During Apartheid in South Africa, the college divested its money from South African companies. According to SRC student representative Sam uelDoten ’16, however, there were key differences between that proposal and Fossil Free Mac’s current proposal.

“Disinvesting from South African countries wasn’t that financially risky. We held barely anything, so it was a symbolic gesture,” Doten said. “With fossil fuels, we may not have huge holdings, but it’s not anything to cough at.”

The ways in which Macalester’s endowment is managed also makes a difference. “It was very easy to target [South African] companies, because we were looking at privately held companies,” Doten continued. “[With] fossil fuels, it’s very difficult to target them because most of our holdings contain commingled funds. We don’t own 1,000 stocks of Exxon. We own a fraction of a stock with an entire pool that is shared by hundreds of other investors.”

Doten said that this specific proposal is different from those that have been brought to the SRC in the past due to the financial risk that it carries, along with the unprecedented type of change that it requires. “It has so much to do with the relationship of the school to the world outside of Macalester College,” Doten said. “I think that the SRC has to grapple a lot more with this proposal, just given the wide impact that it could potentially have.”

“Regardless of the decision [of the SRC], I think the net impact of this will be that Macalester will become more sustainable, whether that is through the endowment or some other kind of commitment,” Doten added.

The SRC, whose next meeting would normally be in the beginning of May, has scheduled an extra meeting in the next few weeks to further discuss Fossil Free Mac’s proposal.