Divestment of Fossil Fuels At Pitzer College

The Claremont Colleges Divestment Campaign

Report to the Trustee Investment Committee

February 15, 2013

I. Background

In their Fourth Assessment Report, the Intergovernmental Panel on Climate Change (IPCC) found that due to a 70% global increase in human-induced greenhouse gas emissions from 1970 to 2004, “Warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice and rising global average sea levels.” In the 2009 Copenhagen Accord,167 countries agreed to endorse a target of 2°C (3.6°F) as an upper limit for temperature increase by 2050. World Bank Group President Jim Yong Kim claims “A 4°C warmer world can, and must be, avoided - we need to hold warming below 2°C.” NASA scientist James Hansen emphasizes the importance of limiting warming to below 2°C and reducing the atmospheric carbon dioxide concentration from 385 ppm to 350 ppm “if humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted.”

The Carbon Tracker Initiative reports that the fossil fuel industry has access to five times the amount of coal, oil, and natural gas that would push us past this 2°C target.  As it stands, the fossil fuel industry is being morally and economically supported in its unethical and destructive practices. In recognition of this, a movement calling for the divestment of holdings in fossil fuel companies has spread to 234 college and university campuses as well as a growing number of cities and religious institutions.  The highlights of the movement can be found at gofossilfree.org and include McKibben’s paper on ‘climate math’ in the Rolling Stone; an article by the Nation on the 100-student Claremont Colleges march; a quote by Meagan Tokunaga (PO’15) in the New York Times about the national divestment movement; and an article by Char Miller (PZ’76) in Community Educational Television. The Claremont Colleges Divestment Team has 60 active members, the support of a number of faculty and alumni, and 400 petition signatures and counting.

II. Moral Imperative

Through the acquisition and holding of fossil fuel investments, Pitzer College is implicitly supporting this industry.  As an institution known for taking action to confront issues on sustainability and social responsibility, it is inconsistent and hypocritical for Pitzer College to remain invested in fossil fuels.

Environmental sustainability is one of Pitzer’s core values, cemented in the history of the college. Since its founding in 1963, Pitzer College has been committed to sustainability. Its environmental studies program began in the 1970s and the College has been practicing what it teaches ever since.” Sustainability is included in the mission statement: “Pitzer College produces engaged, socially responsible citizens of the world through an academically rigorous, interdisciplinary liberal arts education emphasizing social justice, intercultural understanding and environmental sensitivity.” President Laura Skandera-Trombley stated in the inauguration of the Robert Redford Conservancy, “at Pitzer College we teach about the environment, we research it, we advocate for it, and we create the next generation of leaders.” However, as Pitzer’s mission statement insists, “These values are mere words until we practice them.”  Divestment presents an opportunity for Pitzer College to actualize these core values.

III. Endowment Impact  

Concerns thus far have centered on the financial effects of divestment on an endowment’s projected rate of return and stability.  We recognize the validity of both of these concerns and would like to share our findings from a few studies.  In their paper “Do the Investment Math”, The Aperio Group showed that the effects of full divestment on the risk and expected returns of a portfolio is de minimus.  An HSBC study warns investors that 40 to 60% of leading fossil fuel firms’ current market capitalisation could be at risk if the international community sticks by its commitment to limit global temperature increases to 2 degrees C.  The study’s authors say: “We believe that investors have yet to price in such a risk, perhaps because it seems so long-term.”  This statement is corroborated by a quote from the Lehman Brothers, which was found in Mercer’s report on environmentally and socially responsible funds.  It states: “ESG issues, specifically climate change, can gradually but powerfully change the economic landscape and cause periodic sharp movements in asset prices.”  Whereas the future performance of the fossil fuel industry seems uncertain, a Bloomberg New Energy Finance report shows that “the annual value of renewable energy capacity installed will double in real terms from $195 bn in 2010 to $395bn in 2020”.  In addition they report that ”cost reductions will spur the deployment of solar power, which will undergo the second-fastest rate of growth of all technologies behind offshore wind.”  These statements provide strong indication that alternative energy is on the rise.  

Regarding alternative investments, we have done our best to educate ourselves and understand endowment investing, but acknowledge that we are far from experts.  We are confident that Mercer has the expertise and resources to advise Pitzer College on alternative investment opportunities.

IV. Conclusion

It is morally imperative for Pitzer College to commit to upholding its core values and mission in all capacities.  President Trombley stated, “I think your campaign is a worthy one; I think that you have very admirable principles. You are doing what I think is consistent with the values of Pitzer college”(31 Jan. 2013).  Divestment presents an opportunity for Pitzer College to stand out amongst its peers as a leader in environmental and social responsibility. We are confident that the committee will not only act in accordance with the values of this college but also consider the interests of all who will be affected by your decision.  Thank you for your time and consideration.  


I. Background

Intergovernmental Panel On Climate Change, Fourth Assessment Report http://www.ipcc.ch/pdf/assessment-report/ar4/syr/ar4_syr_spm.pdf 

The World Bank, Climate Change Reports Warn of Dramatically Warmer World This Century http://climatechange.worldbank.org/content/climate-change-report-warns-dramatically-warmer-world-century 

James Hansen, Target Atmospheric CO2: Where Should Humanity Aim? http://arxiv.org/ftp/arxiv/papers/0804/0804.1126.pdf 

Carbon Tracker Initiative, Unburnable Carbon https://docs.google.com/file/d/1tsmQREK21woVhOQxS2bvmRgSydRbrSpI8BVkq_RmOkDvrM7s47A5RkjpphX9/edit 

Bill McKibben, Global Warming’s Terrifying New Math http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719

Tom Hayden, Climate Activists Hit Hard With ‘Do The Math’ National Tour http://www.thenation.com/article/171225/climate-activists-hit-hard-do-math-national-tour# 

Brent Summers, Campus Divestment Fight Resonates in the East http://green.blogs.nytimes.com/2012/12/12/campus-divestment-fight-resonates-in-the-east/ 

Char Miller, Divest Now? A Case for Our Immediate Divestment from Fossil Fuels http://www.kcet.org/news/the_back_forty/commentary/golden-green/divest-now.html 

II. Moral Imperative

Pitzer College, “Sustainability In Action”


Pitzer College, “About: History and Mission”


Pitzer College, “The Robert Redford Conservancy at Pitzer College”


III. Endowment Impact

Aperio Group, Do the Investment Math: Building a Carbon-Free Portfolio http://www.aperiogroup.com/system/files/documents/building_a_carbon_free_portfolio.pdf

Bloomberg New Energy Finance, Spending on new renewable energy capacity to total $7 trillion over next 20 years


Asset Management Working Group of the United Nations Environment Programme Finance Initiative, Mercer Demystifying Responsible Investment Performance: A review of key academic and broker research on ESG factors

 (see attached pdf)