President Liebowitz Announces Endowment Statistics and Addresses Possibility of Divestment in All-School Email

Middlebury President Ron Liebowitz sent out an all-school email today revealing that approximately 3% of the school’s $900 million endowment is invested in fossil fuels and approximately 0.6% is invested in defense and arms manufacturing. He also announced plans for panel discussions about divestment that would include “representatives from the firm that manages our endowment (Investure), veteran investment managers, and our own Scholar-in-Residence, Bill McKibben.”

This email comes on the heals of widespread student engagement on campus the past year concerning the ethics of our endowment, including several student groups calling for Middlebury to take leadership in divestment, controversial but discussion-provoking activism, and a nation-wide campaign led by Scholar-in-Residence Bill McKibben to encourage universities and colleges to divest from fossil fuel industries.

Liebowitz’s acknowledgment of the possibility of divestment was encouraging to those hoping for divestment, but far from definitive. He said in the email:

“The management of Middlebury’s endowment is complex and has evolved over time… the College is very limited in either selecting or deleting any particular investment within its overall portfolio.  Despite such limitations, the Investment Committee, the Administration, and Investure have been working with ACSRI to ensure that socially responsible investing is discussed and reviewed as a regular and ongoing part of the investment process…At the same time, the primary fiduciary responsibility of our investment committee is to maximize its investment returns to support vital programs including financial aid and staff and faculty compensation, while managing risk…It is vitally important to understand both the risks and rewards of one’s investment decisions as we are the stewards not only of the endowment for the current generation of Middlebury students, faculty, and staff, but for future generations as well.”

This email has already gotten local media coverage and is featured on the Fossil Free website, part of McKibben’s divestment campaign.

McKibben responded to Liebowitz’s email through 350.org saying, ““President Liebowitz used just the right tone and took precisely the right step. It won’t be easy to divest, but I have no doubt that Middlebury–home of the first environmental studies dept in the nation–will do the right thing in the right way. It makes me proud to be a Panther.”

MiddBlog will be providing more information about the significance of this email as we get it.

Read his whole email after the jump:

Dear Students, Faculty, and Staff,

This fall, several student groups on campus have raised questions surrounding the College’s endowment, specifically with regard to holdings related to fossil fuels.   One group, the Advisory Committee on Socially Responsible Investing (ACSRI), has been meeting regularly with Patrick Norton, the College’s Vice President for Finance and Treasurer, and one of its members attends Investment Committee meetings of the Board of Trustees.  Other groups, some part of a national movement on college campuses, have also engaged the College administration and community, hoping to learn more about the College’s endowment, how it is invested, and whether we should divest of our investments in fossil fuel companies.

As an academic institution, the College administration and the Board of Trustees are interested in engaging our students’ interest in the endowment.  Such engagement, however, must be serious and be based in responsible inquiry and research.  It must also be respectful and inclusive of all opinions.  A look at divestment must include the consequences, both pro and con, of such a direction, including how likely it will be to achieve the hoped-for results and what the implications might be for the College, for faculty, staff, and individual students.

With input from several groups on campus, including ACSRI, we will set up and host panel discussions with experts in endowment management and divestment.  It will include, for example, representatives from the firm that manages our endowment (Investure), veteran investment managers, and our own Scholar-in-Residence, Bill McKibben.

The management of Middlebury’s endowment is complex and has evolved over time.  We are part of a consortium with other colleges and foundations whose pooled resources are invested in a number of “fund-of-funds” and therefore the College is very limited in either selecting or deleting any particular investment within its overall portfolio.  Despite such limitations, the Investment Committee, the Administration, and Investure have been working with ACSRI to ensure that socially responsible investing is discussed and reviewed as a regular and ongoing part of the investment process.  We have instructed Investure and the managers they engage to follow the environmental, social, and corporate governance (ESG) principles that align investors with broader objectives of one’s mission and society at-large (see: http://www.middlebury.edu/media/view/437641/original/proxy_voting_priciples.pdf )

At the same time, the primary fiduciary responsibility of our investment committee is to maximize its investment returns to support vital programs including financial aid and staff and faculty compensation, while managing risk.  Currently, the endowment finances approximately 20 percent of the College’s annual operating cost—approximately $50 million this past year.  It is vitally important to understand both the risks and rewards of one’s investment decisions as we are the stewards not only of the endowment for the current generation of Middlebury students, faculty, and staff, but for future generations as well.

At present, approximately 3.6 percent of the College’s $900 million endowment is directly invested in companies related to fossil fuels.  For those interested in the amount directly invested in defense and arms manufacturing, the share of our endowment in those companies is less than 1 percent—approximately 0.6 percent.  I have included an explanatory note at the end of this communication to provide information on the methodology used to determine these percentages.  I encourage you to contact Patrick Norton (pnorton@middlebury.edu) if you have any questions about this methodology or about the College’s endowment.

I, along with my administrative colleagues and fellow board members, look forward to engaging the community on an issue of great interest and import to the College and its many constituents.  I will be sending more information on the first panel discussion when plans are finalized.

Sincerely,
Ron

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3 thoughts on “President Liebowitz Announces Endowment Statistics and Addresses Possibility of Divestment in All-School Email

  1. It is Liebowitz, not Leibowitz! MiddBlog has been misspelling the name for a while. Just remember, “i before e, except after c” and so Liebowitz it is.

  2. Student Group Presents Case for Divestment to Trustees | MiddBlog

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