ACSRI Members Respond to Liebowitz’s Email in Interview

After reading President Liebowitz’s email last night, we at MiddBlog still had a few questions about what it all meant.  So we decided to ask some of the people who have been in the trenches with the administration and the trustees trying to move divestment forward.  Here is our email interview with members of the Advisory Committee on Socially Responsible Investing (ACSRI) Ben Chute ‘13.5 and Nathan Arnosti ’13.

MiddBlog: Ron got kind of sassy there with the little note on the email forwarded to students (“I guess I need to get permission”), didn’t he?

Ben Chute ‘13.5: I hadn’t noticed, but now that you mention it, it’s kind of funny.

MB: Can you guys provide any insight into how and why Ron decided to come out with some statistics on our endowment at this point in time?

BC: I take him at his word when he says he trusts the Middlebury College community to discuss the issue thoughtfully and seriously. The ethical investment of our endowment is a complex issue, and bringing Middlebury students into the discussion not only gives them a fantastic opportunity for experiential learning, but also includes the voice of a major stakeholder in the operation of the this college.

I think this conversation beginning with statistics is a signal of where it is headed. This issue is equally grounded in principle and practicality, and the statistics will help us guide the discussion beyond simply the principles of divestment into a more complicated discussion of how we would implement it.

MB: He says, “one of its members attends Investment Committee meetings of the Board of Trustees.” I am assuming that’s you Ben? Can you talk about what that entails, how much influence you have, and if it had anything directly or indirectly to do with Ron’s email.

BC: Yes I’m the Student Liaison to the Investment Committee of the Board of Trustees(!). I had my first meeting with the IC last October, when I met with Trustees and Investure in Old Chapel. I’m optimistic that this position will be an important one; simply being able to be in the room and experience how everything works is instructive towards gearing SRI proposals for better reception by the Trustees, but being able to speak for 5 minutes at the end of each meeting into the foreseeable future is the most exciting attribute of the position. Opening up a dialogue between the Trustees and students has already proved beneficial, and I am confident that more good things will come of it.

MB: 3% of our endowment invested in fossil fuels, and less than 1% in weapons industries doesn’t sound like a lot to me. Is it less than you guys expected too? On the other hand, does that mean it will be more feasible to divest such a small part of our endowment? Or is it actually not that small?

Nathan Arnosti ’13: I was also pleased to see that, according to Investure’s estimates, only 3.6% of Middlebury’s endowment is directly invested in fossil fuels, and .6% is directly invested in defense and arms manufacturing. These figures, certainly at the low end of SRI’s estimates, suggest that Middlebury’s endowment is not solely reliant on the fossil fuel industry for financial returns. Though our investments are spread across many vehicles – thus complicating the picture significantly – divestment from fossil fuels is more feasible when it comprises 3.6% of our portfolio than it would be with a larger percentage of these investments.

That said, 3.6% is not trivial: with a $900 million endowment, that equates to around $32 million of investments in fossil fuels.

MB: Can you translate all the jargon at the end of his email into plain English? Where exactly do these statistics come from and what do they reflect? Are they showing the whole picture in your opinion?

NA: To clarify the specifics of Investure’s reporting, Investure states that they have used “available information” from their many investments, meaning that these figures are approximated.  It would be helpful to know what percentage of Investure’s investments were included in this approximation, as that would better indicate the potential margin of error.

Also, it is important to note that these figures refer only to direct investments in fossil fuels and defense manufacturing. Thus, while Exxon Mobile might count as part of the 3.6%, a company that manufactures machinery for offshore oil rigs might not. Where we, as a community, draw the line with these industries is a crucial topic of discussion.

MB: Overall are how do you feel about this development? Will this be impact your strategies going forward?

NA: I was very excited to hear last week that President Liebowitz was planning to release information regarding our endowment’s investments in fossil fuels and defense and arms manufacturing. This is an excellent step forward towards a responsibly-invested endowment.