January 28, 2013

EDITORIAL: Divesting Selectively

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Last semester, the Cornell environmental group Kyoto NOW! demanded that the University divest the portion of its endowment that is currently invested in the fossil fuel industry by 2020. While we wholeheartedly support Kyoto NOW!’s efforts to promote sustainability based on clean energy, we believe that divestment is not the right approach for the University, and that Cornell must prioritize its role as an institution of higher education, keeping an eye toward the University’s fiscal stability and political neutrality.

The most effective way in which Cornell can help alleviate the problems of climate change is through its mission of educating future educators, policymakers and voters. We feel that divestment would only weaken Cornell’s ability to affect long-term change by compromising the University’s fundamental educational mission — a mission that is largely reliant on impartiality and academic freedom. We believe that these calls for divestment interpret the University’s role in society as that of a political player. A precedent of the University acting as such would leave Cornell vulnerable to potential stifling of the intellectual discussions that occur on campus every day. The true purpose of the University is to cultivate probing dialogue on issues like climate change — not to be a political player itself.

This educational mission could also be jeopardized with divestment to the extent that it interferes with Cornell’s ability to finance it. Divesting from an entire economic sector would both eliminate a profitable component of Cornell’s investment portfolio and diminish its diversity, increasing the risk taken on by the University. Cornell must closely evaluate whether banning investments to high-performing oil companies in the fossil fuel industry would diminish its returns. The Cornell Board of Trustees has a legal duty, as well as a moral responsibility to donors, to prudently invest the funds it receives to maximize the value of the endowment.

Even if Cornell were to make the decision to divest — potentially compromising its educational mission — the benefits of doing so are uncertain. We believe that the burning of fossil fuels is not determined primarily by investments in these companies. Rather, the consumption is driven by the demand side of the equation: individuals who continue to demand huge amounts of fossil fuels to power their daily lives. The marginal benefit of divestment is outweighed by the negative repercussions of setting the precedent of institutional position-taking.

We share the reservations that University President David Skorton expressed early in his presidency: “In schools as diverse as Cornell, one statement of principle or position will most often not represent a consensus … of the thousands of faculty, staff and students from varying … backgrounds.” Over the years, Skorton has fielded numerous requests by student activists urging him to use his position as the University’s mouthpiece to publicly advocate on polarizing issues. He has prudently rejected calls for divestment from both Israeli and Gazan businesses. While the University should certainly use its visibility as a platform for social reform, it should generally limit its crusades to issues related to higher education policies.

Divestments are a tool to be used extremely sparingly at the university level. The most effective way for Cornell to combat climate change is to instill in students an awareness of the crisis and to promote research that explores efficient energy consumption, both of which depend on prudent use of the endowment and an appreciation for the University’s educational mission.