Match Our Investments with Our Mission

By Jeannie Bartlett

Middlebury may have lost control over its investments. In his Report On The Recent Board Of Trustees Meeting, President of the College Ronald D. Liebowitz wrote that our current investment strategy “raises questions about sharing authority with more institutions and therefore having less say in how, where, and with whom Investure invests.” The review of our investment manager that Liebowitz proposes is the first step towards regaining control over our investments, and with that control the ability to divest.

For the past ten years, Middlebury has outsourced our investment office to Investure, a company that manages our billion-dollar endowment along with those of a dozen other institutions. Because this structure responds to so many different institutional interests, those who hold responsibility for the College’s long-term success have little direct say over where our endowment is invested (go/endowment101). Over the past three years of campaigning for Middlebury to divest our endowment from fossil fuels, Divest Middlebury succeeded in raising the President’s concern over this shortcoming of Investure’s structure.

Divest Middlebury is part of the global movement to divest from fossil fuel companies, because we believe we should invest in the future we believe in, not contradict our efforts of carbon neutrality. We are asking for Middlebury to immediately stop buying new positions in the top 200 publicly traded fossil fuel companies and get out of any current investments in these companies within five years. Because of Investure’s current model, however, we can’t do that.

Whether or not the College can keep Investure and divest from fossil fuels is unknown. Last November, the Rockefeller Brothers Fund left Investure in order to divest its $860 million endowment from fossil fuels. Their departure suggests that the probability of divesting within Investure is slim.

“It is paradoxical for environmental grant makers to fund climate solutions while investing in companies that are accelerating climate change,” states DivestInvest’s mission statement, an organization of divested institutions that includes the Rockefeller Brothers Fund. “We can get good, safe returns while helping to build a new energy system.”

It’s also possible that Investure might adapt to give us more control. In 2010, Investure created a way to dedicate some of our investments to renewable energy. Investure launched the Sustainable Investments Initiative with funds from Middlebury, Dickinson College, and the Rockefeller Brothers Fund. At the time of its launching, Middlebury committed one fifth a percent of our endowment to these “green” investments. After Divest Middlebury’s first year of campaigning, the College agreed to up our position to five percent of our college’s investments. Clearly sometimes Investure can customize their offerings, and then in some ways we can have a say over where our endowment is invested.

Whether we stay with Investure or leave, we can collaborate with other investors who share our values. If Investure creates a “fossil fuel free” option for Middlebury, Dickinson College and other like-minded clients can join it. Otherwise, Middlebury and our peers should form a new investment-consortium with a manager who has expertise in environmentally and socially responsible investing.

The consortium model of investing has worked well for Middlebury, financially. As Liebowitz said in his February 2nd email, “Investure… continues to generate excellent endowment returns that place Middlebury in the top quartile of colleges and universities.” Of course, as students who appreciate all that this College offers us – from financial aid and top-notch academics to Real Food and biomass energy – we don’t want to see the College get lower returns on investments. But we believe that fossil-fuel-free investing can make equally good returns, and that, in fact, investments in fossil fuels may pose an investment liability in the form of stranded assets. Our belief is founded on well-documented research, solid numbers and resounding expert opinion. go/endowment; go/rbf; go/divestment

When the College concludes the review of Investure, how will we know whether we have enough “say” in our investments? What are the particular questions this review will ask, and what do the answers mean for us? Divest Middlebury knows one question this review should ask: Through Investure, do we have the power to screen certain sectors or companies from our portfolio? If yes, we might stay. If no, we’re out. 

Let’s start customizing our investments to match our mission, beginning with fossil fuel divestment.

 

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