Closing out a semester of protests, assembly votes and even a staged wedding, the Cornell University Board of Trustees voted Friday to essentially divest from fossil fuels.
The Board’s Investment Committee made the decision in early May to institute a moratorium on new private investments focused on fossil fuels and grow investments in alternative and renewable energy.
While the University did not formally call the move “divestment,” University Assembly chair Prof. Robert Howarth, ecology and environmental biology, said the decision is “precisely what we asked for.” Howarth has been at the forefront of a years-long push for divestment at Cornell.
The committee’s vote also included ending all current investments over the next five to seven years, according to Howarth.
However, the new policy does not apply to indexed and other public equity mandates, such as the S&P 500. In these investments, the University is one of many investors and cannot alter an index’s composition. The Investment Office does not directly invest in any individual equity securities, including those of fossil fuel companies, according to its policy.
The committee’s vote came after reviewing Cornell’s $6.9 billion endowment — in which it also considered the future of the coal, oil and gas industries and the threat of climate change, according to the resolution approved by trustees.
Effective immediately, the moratorium applies to new private equity and bond vehicles focused on fossil fuels — which makes up about 4.2 percent of Cornell’s long-term investments, according to Cornell’s chief investment officer Ken Miranda.
“There’s a growing recognition that we’re transitioning away from fossil fuels globally, and the economic competitiveness of renewable energy sources is rising,” Miranda said in a University press release. “We’re doing the right thing from an investment perspective, particularly for an endowment with a perpetual time horizon.”
The conversation surrounding fossil fuel divestment has a long history at Cornell, as the Board of Trustees previously rejected divestment in January 2016, saying that the University’s endowment is not a political instrument.
“Other avenues besides divestiture may be more effective and not merely symbolic,” said Robert Harrison ’76, chairman of the board, in a 2016 University press release. He further explained that many activities that cause social harm do not reach the level of “moral reprehensibility” — the standard for divestment.
In December 2019, Climate Justice Cornell demanded divestment by Feb. 13, Fossil Fuel Divestment Day. After this request went unmet, CJC and other activists staged a number of protests throughout the spring semester.
As of March, all five University constituent assemblies passed fossil fuel divestment resolutions — ultimately prompting the Board of Trustees to revisit the proposal, according to current University governance policies.
The Investment Committee determined that the moratorium and other new measures were “consistent with its fiduciary and stewardship responsibilities,” according to the Board of Trustees resolution.
“The trustees have a lot on their minds,” Howarth said, referring to the coronavirus pandemic. “The fact that they nonetheless brought up this resolution and passed it is remarkable. It’s a deeply sincere move by the trustees, which I think should be acknowledged.”