To the editor:
Fossil fuel divestment should be of interest to those of us in the Cornell community who would like to see our endowment improve its performance and wonder if a fossil-free portfolio could help the University accomplish this.
Comparative analyses by Morgan Stanley Capital Investment since 2014 (retroactively to 2010) shows fossil-free funds yield 0.65 percent higher returns per year than funds including fossil fuel equities. The fossil-free funds returned 12.56 percent per year from 2014 to 2018. Compare this to Cornell’s endowment return of 7.8 percent. A 4.76 percent increase in yield over the past five years would have resulted in over $1 billion of increased assets for Cornell. We could easily make the University carbon neutral and fund many other projects with that kind of money.
Even using the more modest figure of 0.65 percent would have yielded over $200 million of additional funding for the University. The moral and environmental arguments for fossil fuel divestment are slam dunks. Now we are increasingly seeing that financial analysis supports divestment too. This is what all of our governance groups have declared by wide margins, starting with the Student Assembly resolution 32 in 2015. It was why I ran for alumni trustee in 2016.
Institutional funds worth $8 trillion like New York City’s pension fund, endowments of other universities, the sovereign state of Ireland and others have now chosen to divest from fossil fuels. Of course, Cornell’s investment portfolio is not so simply allocated as a straight index fund, but perhaps it should be. It’s high time our Board of Trustees did their fiduciary homework and divested Cornell from fossil fuel equities. Divestment is the best investment.
Joe Rowland ’73