The University is in the process of selling all of its direct investments and managed funds that focus on fossil fuels, President Christina Paxson P’19 wrote in a March 4 Today@Brown announcement.
The letter also informed the community of the University’s new role as a founding partner of the Providence Resiliency Partnership, as well as the University’s progress in reducing greenhouse gases on campus.
Selling off fossil fuel investments
The process of selling investments in fossil fuel companies began in October 2017, Vice President and Chief Investment Officer Jane Dietze wrote in an email to The Herald. By June 2018, the University had sold most of its fossil fuel portfolio, she added. According to Paxson’s letter, the University has now sold 90 percent of its investments in fossil fuel extraction companies. The remaining 10 percent is still in the process of being sold, though this process will take time due to the “illiquid nature of some investments,” Dietze wrote.
The University’s endowment investments are now 0.9 percent in fossil fuel companies as opposed to 6.5 percent before the sale. Of endowment investments in fossil fuels, “The Ivy League peer average, calculated to the best of our ability, is 6.5 percent,” Dietze wrote.
It is due in part to the “accelerating decline in the cost of alternative energy sources” and “escalating uncertainty” in the economic future of fossil fuels that the Investment Office made the decision to sell these investments, Dietze wrote. “People know that this sector is dying, … and it’s just not a good long-term investment,” Paxson told The Herald. “It carries too much risk for the endowment.”
The Investment Office also thought that investment in fossil fuel companies did not align with the University’s Environmental, Social and Governance criteria. While these standards have been in place in financial and investment decisions for the past five years, their importance to University investments has increased over time, Paxson said. This decision “positions us to be actively engaged in pushing … the companies we invest in to be more socially responsible,” she continued.
Though the past several years have seen student protests and activism regarding divestment from fossil fuel companies, this activism did not have a direct impact on the University’s decision to sell these investments, Paxson said. “I think that the activism we’ve seen on campus is very much part of growing awareness that fossil fuels are not the future,” she said.
Paxson“purposely stayed away from the language of divestment” in her letter because of its political connotations on campus.
“This is a more nuanced decision,” she said, adding, “I hope (the decision) makes people proud of Brown. … I hope that people who have deep ethical concerns about fossil fuels will feel good about the decision.”
The Investment Office has made no new investments in fossil fuel companies and will not do so unless these companies “make significant progress in converting themselves into providers of sustainable energy,” Paxson wrote.
“Ironically, some of the world’s traditional energy supply companies may yet play a role in providing sustainable solutions,” Dietze wrote. If companies that traditionally engaged in fossil fuel extraction were to implement “transformational energy or carbon mitigation technologies … the Investment Office would fulfill its duty to re-evaluate such a development” and determine whether or not to reinvest in such companies, she added.
Community partnership and sustainability
Paxson also wrote about the University’s involvement in the Providence Resiliency Partnership, an organization focused on “developing strategies to buffer residents and businesses from the effects of sea-level rise.” This group, which also includes the University of Rhode Island and WaterFire Providence, will focus on how Providence can “become more resilient in the face of the inevitable impacts of climate change,” Executive Vice President for Planning and Policy Russell Carey ’91 MA’06 told The Herald.
The planning of this organization began in early 2019 with a forum held at the University in collaboration with the Institute at Brown for Environment and Society. “The effort now is to bring people together,” Carey said. Though the concrete goals of the organization have not been formed, this year it will focus on raising awareness and money as well as developing “some potential projects and priorities,” Carey added.
Paxson’s letter also explained that the University is on its way to achieving the goals laid out in its February 2019 pledge to cut campus emissions down to net zero by 2040 and reduce them by 75 percent by 2025. Two wind turbines the University constructed in Texas will begin producing energy in the spring, and the University-financed solar farm to be built in Rhode Island is on track to begin producing power in 2022, according to the letter.
The University has also made progress in shifting its central heating plant to run off of “sustainable electricity.” There are two near-term plans currently in consideration to reduce greenhouse gas emissions before the conversion to sustainable electricity: burning recycled biofuel instead of natural gas and offsetting natural gas usage through investment in a renewable natural gas project, according to the letter. The central heating plant heats 70 of the buildings on campus while the other 140 are heated separately, said Vice President for Facilities Management Michael Guglielmo, Jr.
Paxson wrote that the University “plans to confront the realities of climate change” as the demands evolve, through the plans laid out in the letter as well as the sustainability plan currently being developed.
Stephen Porder, assistant provost for sustainability and professor of ecology and evolutionary biology, wrote an in email to The Herald that he is “very proud to be part of a university that is rising to this incredibly important challenge.”
Porder, who has been working on creating the sustainability plan for the University, is “excited for the committee of faculty, staff and students to review all the feedback (on the sustainability plan) we’ve received, improve the plan, get it approved and then move into Phase 2.”
Clarification: A previous version of this article stated that "The University is in the process of selling all its direct investments in fossil fuels." In fact, it is more clear to say that "The University is in the process of selling all of its direct investments and managed funds that focus on fossil fuels."