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Board’s decision against fossil fuel divestment meets controversy

Fossil Free Stanford has for years been campaigning for divestment from fossil fuels, despite the Stanford Board of Trustees repeated decisions not to take action on the matter (Photo: RAGHAV MEHROTRA /The Stanford Daily).

On April 25, the Board of Trustees reignited a campus-wide controversy when it announced that Stanford will not divest from the fossil fuel industry, specifically from oil or gas.

The Board’s decision was in response to a request for divestment made by the student group Fossil Free Stanford (FFS), whose multiyear campaign for fossil fuel divestment included a weeklong sit in protest last November outside President Hennessy’s office.

While those involved in the Board’s decision not to divest have defended the recent announcement, calling divestment an extreme action, many students and faculty have criticized the decision– with members of FFS in particular vowing to continue to fight for their cause.

Decision process

After submitting a Request for Review (RFR) directly to the Advisory Panel on Investment Responsibility (APIRL), FFS was invited to speak with APIRL. APIRL then proceeded to investigate the claim, and based on this investigation made a recommendation to the Board of Trustees’ Special Committee on Investment Responsibility (SCIR) in February of this year. SCIR then gave its own recommendation to the Board as a whole, which has the final say on all requests for divestment.

However, according to Susan Weinstein ’72 M.B.A. ’79, assistant vice president for business development and the current APIRL chair, SCIR strongly considers APIRL’s recommendation when making their decision.

Weinstein emphasized that the bar for divestment is high.

“Divestment is an extreme solution and is generally recommended only when all six requirement for divestment contained in the SIR [Statement on Investment Responsibility] have been met,” she said in an email to the Daily.

In a public statement announcing their decision, the Board of Trustees particularly stressed that the company or industry’s social injury must outweigh social benefit for the Board to decide to divest. The Board stated that APIRL, in its recommendation to the SCIR, concluded that “it could not evaluate whether the social injury caused by the fossil fuel industry outweighs the social benefit it provides” and that therefore the criteria for divestment were not met.

While APIRL advised Stanford to divest from companies directly involved in oil sands extraction, the Board stated that Stanford owns no such stock.

“APIRL recommended divestment of companies whose primary business is oil sands extraction, a method that studies have found requires more water, and releases more carbon into the atmosphere, than other forms of fossil fuel extraction,” the Board wrote in its statement. “However, Stanford Management Company has advised SCIR that the Stanford endowment has no direct exposure to companies whose primary business is oil sands extraction. Therefore, there is no action for the Board of Trustees to take.”

The Board also announced the creation of a Climate Task Force that will include undergraduates, graduate students, faculty and staff. The task force will “actively solicit ideas from the Stanford community” about how the University can address climate change.

Trustees were not available to comment for this article.

Response from FFS and others

Members of FFS were disappointed by the Board of Trustees’ decision — including their announcement that they would take no action on divestment from oil sands extraction, which FFS criticized for creating no explicit ban on tar sands investment.

“With coal, [the Board] voted to divest from coal explicitly and set out a policy outlining that they will not invest in coal in the future and recommended that their external managers’ also divest from coal holdings,” said Zhanpei Fang ’19, an active member of FFS. “That was a more thorough divestment action.”

Fang explained that because the Board’s statement on tar sands was “extremely non-committal,” FFS views the trustees’ decision as a full-out refusal to divest.

Despite their disappointment with the Board, FFS expressed willingness to cooperate with the new Climate Task Force.

“We have advised the administration that this task force should include people who have been heavily involved in the call for divestment because it was created in response to that,” said Yari Greaney ’15 M.S. ’16, one of the founding members of FFS.

Greaney further clarified that FFS will continue to work towards divestment and will not accept the Climate Task Force as a substitute to divestment.

“There is not an alternative to divestment,” she said. “There are complementary strategies to divestment.”

FFS is not alone in its disapproval of the Board’s decision, having mobilized hundreds of faculty as well as thousands of students and alumni for its cause over the past three years, according to Greaney. This includes 450 faculty who signed a letter in support of divestment, and over 300 students who have pledged not to donate to Stanford after graduating or as part of their senior gift until the University divests.

Among these supporters is Mark Jacobson ’87 M.S. ’88, professor of civil and environmental engineering, senior fellow at the Precourt Institute for Energy, and senior fellow at the Woods Institute for the Environment. Jacobson contests the Board of Trustees’ claim that it is unclear whether the social injury caused by the fossil fuel industry outweighs its social benefit.

“The Board of Trustees made zero consideration for the assault on the general population,” Jacobson said, referring to the health conditions caused by the fossil fuel industry that he says lead to thousands of deaths annually. “These industries sell these products knowing that they cause mortality… and it seems like [the Board] shirked their responsibility to actually investigate this topic thoroughly.”

“Stanford has a moral responsibility not to invest in companies that are engaged in mass murder,” Jacobson said.

APIRL, however, maintains that its investigation was thorough.

“In this case, APIRL conducted a thorough review of the issues raised by FFS, drawing on the expertise of Stanford faculty and others, and in a manner guided by the University’s Statement on Investment Responsibility,” said Weinstein.

Weinstein said that the panel included two faculty members with “strong backgrounds in the subject matter” who were exemplary of faculty involvement: Rob Jackson, Michelle and Kevin Douglas Provostial Professor, senior fellow at the Woods Institute for the Environment and senior fellow at the Precourt Institute for Energy, and Barton “Buzz” Thompson ’72 J.D. ’76 M.B.A , Robert E. Paradise Professor in Natural Resources Law and Perry L. McCarty Director of the Woods Institute.

Despite APIRL’s claims of thorough deliberation, FFS has expressed frustration with what they call the bureaucratic nature of the divestment deliberation process, and what they consider to be a lack of transparency on the part of the administration.

“They wrote rules that they were unable to follow,” Greaney said. “They made criteria that that were unable to answer…That is irresponsible. What the administration is doing is hiding behind the bureaucracy that they have created.”

However, FFS members believe that Stanford’s hiring of Alison Colwell for the new position of director of Investment Responsibility Stakeholder Relations is a step in the direction of transparency.

“That has been a success of our campaign,” Fang said. “Bringing accountability to Stanford’s administration is something that we have achieved over…four years.”

Regardless, FFS plans to continue to push Stanford to divest from fossil fuels by placing pressure on the administration.

“We are not going away,” Fang said. This movement is not going away. We will keep fighting until Stanford is fully divested from fossil fuels.”

 

Contact Blanca Andrei at bandrei ‘at’ stanford.edu.

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