Dear Board of Trustees,
The climate crisis is a defining issue of current and future generations. The fifth Intergovernmental Panel on Climate Change (IPCC) report, released earlier this year, states with at least 95 percent certainty that humans are the primary contributors to current warming trends.
As a responsible institution, Wesleyan teaches students to shape a healthy and sustainable future for our country and our world. We believe that every aspect of Wesleyan, including the endowment, should reflect this responsibility. We have committed to climate neutrality by 2050, yet we continue to fiscally endorse the fossil fuel industry with our endowment. Investing in these companies inadvertently promotes the acceleration of global warming and is at odds with our Climate Commitment. The endowment does not exist independently of the University; it represents Wesleyan’s values.
It is internationally accepted that a 2 degrees Celsius increase in global temperature would result in lasting harm to the planet. In order to remain below this threshold, large portions of carbon reserves—which account for an estimated 50 to 80 percent of fossil fuel companies’ valuations—would have to remain in the ground. By looking at the Dow Jones U.S. Oil & Gas Index (DJUSEN), it is evident that the market has underreacted to climate-regulating international agreements and legislation.
In the last year, fossil fuel companies have allocated $670 billion towards creating new types of fuel reserves (e.g. fracking, tar sands, and mountaintop removal), which are often less profitable and strain operating cash flows. Recent evidence indicates that demand for natural gas for half the world’s population is rising five times faster than supply. While this is not proof of a carbon-asset bubble, this is how a carbon-asset bubble would behave: rapid price inflation despite decaying underlying value. These are liabilities that could potentially take a toll on shareholder value.
Moreover, large corporations including Wal-Mart, Apple, Cisco, Lockheed Martin, and Deutsche Bank are earning Renewable Energy Certificates, using on-site alternative energy generation, and creating utility green power products. These corporations are not investing in clean energy purely for the social good; they likely invest because they see potential long-term returns in alternative energy investments, rather than conventional energy generation methods.
The fossil fuel divestment movement provides Wesleyan with a unique opportunity to establish itself as a leader amongst peer institutions. Wesleyan divestment can propel a movement dedicated to fundamentally altering the environment around private and public investment decisions. This has the capacity to recalibrate the market to incorporate the real cost of climate change. Divestment will not only set an example, but could also attract long-term, positive attention and increased alumni donations.
We share a passion for the Wesleyan experience. We share a commitment to the opportunities Wesleyan provides. We share a desire to challenge the status quo to create a more just and equitable world. In our time here, we have not only learned to think in terms of practical idealism, but also that we must aim to apply these ideas as an institution. We believe it is our responsibility to research and thoroughly assess the potential outcomes of a responsible and gradual divestment strategy. As members of the Wesleyan community, we respect your expertise, understand your fiduciary responsibility, and trust you to make the best decision for our community.
Thank you for your consideration.
Sincerely,
Abby Cunniff ’17, Scott Elias ’14, Pierre Gerard ’15, Mira Klein ’17, Zac Kramer ’17, Claire Marshall ’17, Genna Mastellone ’17, Sonia Max ’17, Maya McDonnell ’16, Angus McLean ’16, Sarah Mininsohn ’17, Eva Steinberg ’17, Izzy Stern ’14, Sara Swaminathan ’17, Zachary Wulderk ’15, and the rest of Wes, Divest!