Editorials

Editorial: Rationalizing the divestment decision

By
Tuesday, November 5, 2013

Students at Brown are quick to support a cause, and their plea for coal divestment is no exception. On Oct. 27, President Christina Paxson wrote an email informing the Brown community that the Corporation would not divest the University’s endowment from major coal companies. “The existence of social harm is a necessary but not sufficient rationale for Brown to divest,” she wrote.

Paxson’s announcement was met with surprise, disappointment and anger from much of the community, led by members of Brown Divest Coal. They condemned the Corporation’s decision for its lack of a democratic process and its prioritization of profit over social good. Anger with the Corporation’s decision even made its way to news sources like the Huffington Post and the Providence Journal. Though Brown’s social awareness should be celebrated, the outrage many community members have directed toward the Corporation overemphasizes the amount of money actually invested in coal and the impact divestment would have.

As a whole, the University invests minimally in coal companies — with holdings making up less than 0.1 percent of the University’s investments, The Herald previously reported. Divestment would have virtually no actual impact on the environment, but could pull funding from the University that could be used for financial aid or other priorities.

Community members condemned the University for prioritizing Corporation members’ financial ties in their decision. They have pointed to trustees like Steven A. Cohen P’08 P’16 and Bank of America CEO Brian Moynihan ’81 P’14, who have huge financial stakes in coal. Though these members of the Corporation should have recused themselves from the discussion to avoid the appearance of impropriety, Paxson’s email indicates their presence ultimately didn’t matter: The body generally opposed divestment, anyway.

The University’s endowment is far smaller than those of other Ivy League institutions with which Brown must compete for students.  Compare Brown’s $2.86 billion endowment with that of Harvard, which reported a 2012 endowment of $32 billion. Brown can use its investments in coal to fund other important functions —  for example, attracting brilliant students and faculty members and funding cutting-edge research. If we can build up the University’s research capacity, we could enhance the technology needed to use different forms of reusable energy and eventually make coal obsolete. In fact, the University has already demonstrated its intent to work toward a healthier and more sustainable environment in Paxson’s strategic plan.

Ultimately, the events of the past week have demonstrated that there seems to be confusion among the student body regarding the power structure of the University and the voting power of students. Student activism and student voices are a significant part of campus discourse, and they have time and time again proven to bring about meaningful reforms on campus. But structurally, Brown is not governed by the student body. Unlike in the case of the faculty, the student government’s votes do not shape policy. It is fair to be disappointed with this decision, but we must remember Brown answers to more than just student voices. The University does an admirable job of welcoming suggestions and taking into account community members’ opinions. But when push comes to shove, it cannot always answer to student outcry — though it can and should consider those responses as it fomulates its broader vision and ideas. As much as it is an academic institution, Brown is also an economic institution, and it must make decisions to strengthen all of its roles.

 

Editorials are written by The Herald’s editorial page board: its editor, Rachel Occhiogrosso, and its members, Daniel Jeon, Hannah Loewentheil and Thomas Nath. Send comments to editorials@browndailyherald.com.

8 Comments

  1. burn the bdh says:

    “Ultimately, the events of the past week have demonstrated that there seems to be confusion among the student body regarding the power structure of the University and the voting power of students. Student activism and student voices are a significant part of campus discourse, and they have time and time again proven to bring about meaningful reforms on campus. But structurally, Brown is not governed by the student body. Unlike in the case of the faculty, the student government’s votes do not shape policy. It is fair to be disappointed with this decision, but we must remember Brown answers to more than just student voices.”

    Such total bull. There is no “confusion.” We KNOW our voices don’t matter. We want to change that because there’s no reason that criminals like Steve Cohen should run this school and students faculty and staff shouldn’t.

    No one is calling for ONLY students to run the school. People are calling for students, faculty, and staff to run the school. Typical uninformed authoritarian babble from an authority-loving student newspaper.

  2. When did the members of the BDH editorial board decide they ought to be such active apologists for power?

  3. This is a great, realistic, article.

  4. There are multiple glaring factual and ideological inaccuracies with this article, I want to highlight just a few. First, that “Divestment would have virtually no actual impact on the environment, but could pull funding from the University that could be used for financial aid or other priorities.” Divestment has had a significant and measurable political impact in the past, and stating that divestment would have no impact on the environment ignores the fact that climate change is first and foremost a political issue. Second, divestment would not hurt our financial stability in any way whatsoever, divestment from coal from the small funds we have would simply mean reinvestment in something else, and the university has said that there is absolutely no financial concerns with divesting from coal.

    This article also ignores the fact that the university committee in charge of considering divestment, ACCRIP, formally recommended divestment and then reiterated that recommendation again in a letter to the Corporation, and yet clearly the corporation did not see any reason to listen to ACCRIP or take its year of discussion and consideration seriously. In the past, the corporation has always followed ACCRIP’s recommendation, this decision marks a strong deviation from Brown’s precedents and past commitments to divestment.

    There is also this extraordinarily unrealistic statement, “If we can build up the University’s research capacity, we could enhance the technology needed to use different forms of reusable energy and eventually make coal obsolete.” We are a small university, please recognize that billions of dollars from institutions that are far more well-known for research have been spent on technological solutions to climate change, and us putting in a very small amount of money from our endowment would be so minuscule compared to the public statement that coal is immoral from an ivy league university. I’m disappointed that the editorial board has not looked into the history of this university and divestment, and recognized just what an impact divestment has had in the past.

  5. Great article says:

    This is fair and more than reasonable — Also, the caustic responses in this comment section only perpetuate the idea that Paxson has acted like a thoughtful adult and BDC is a mob of whiny children.

  6. clarification says:

    I am confused by the premise of this article. What do you mean when you write that divestment could pull funding from the University? Divestment would not relinquish whatever money Brown has invested in coal; it would simply place that money in a different investment. To say coal divestment would pull funding from the University seems to rely on the premise that coal is some amazingly remunerative investment that no other investment can match. Yet this appears to be far from the case. If anything, coal is a declining investment.

    In fact, it seems that two things that everyone can agree on who has been involved in this issue on either side is that Brown’s divestment from coal would have essentially no financial impact on the University or (at least not in a direct way) on these coal companies: Paxson has acknowledged that divestment would not hurt Brown financially, and Brown Divest Coal has acknowledged that the point of divestment is not to deliver a blow to these companies’ bottom lines.

    For one thing, divestment would be an ethical stance in itself. But it would also be a very powerful statement (a statement that the University could easily give nuance to through supplementary, written statements and through research) that the problems posed by coal must be addressed, and urgently. This statement can help establish precedent for other Universities and governments to divest, and can then positively snowball with those divestment decisions to constitute an unmistakable statement of moral will against coal that can help impel the political will for public policy that will address the problems caused by coal.

    In light of my second paragraph, why did the Corporation and President Paxson decide not to divest? It’s not entirely clear. I would imagine that conflicts of interest by Steven Cohen, Brian Moynihan, and others had something to do with it. I suspect that President Paxson has received pressure from Harvard’s President to not set a precedent of divestment within the Ivy League that could then put pressure on Harvard to divest. I know that President Paxson has said she is worried that if Brown divests, people will say something like, “Well there goes ‘wacky brown’ again.” So i think the opposition to divestment derives also from a goal to try to change Brown’s image to an image of a less liberal school. (You can decide for yourself if you think divestment is really even such a radical move.)

    One thing that seems very clear, though, is that the reasons the Corporation and President Paxson opposed divestment are NOT the reasons she expressed in her letter. These arguments ranged from internally inconsistent to– i’m hesitant to use this word, but I really do think so– laughable (I’m thinking here about the argument that divestment would send a nebulous symbol– as if there are no other channels available to the University to provide more nuanced messages about the details of /how/ the status quo must be changed after it sends a strong signal with divestment that certainly the status quo /must/ change.)

    The seeming disingenuousness of her letter is concerning. Again, I don’t think the exact constellation of reasons for why divestment was opposed are clear. But it’s never a good sign if those reasons can’t be openly expressed and must be masked.

    Also, i definitely agree that divestment is not the only effective step the university could take to address coal and climate change generally. But it is not mutually exclusive with any of these other steps. Brown should divest and take these other steps.

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