Brown University Withdraws Investments from Fossil Fuels
March 5, 2020
PROVIDENCE — After years of reluctance, Brown University is selling its investments in fossil fuel companies. But student activism isn’t the reason for the recent decision.
In an unexpected announcement this week to the Brown University community, president Christina Paxson said the school’s investment office has liquidated 90 percent of its investments in fossil-fuel extraction companies, while the remainder will eventually be sold. The investment office oversees the university’s $4 billion endowment.
Although the selling of fossil-fuel securities began in October 2017, Paxson said last year she was opposed to the more rigorous and controversial policy of divestment.
“Nope. Nope. We rejected that,” Paxson said at a February 2019 climate conference hosted by Brown’s Watson Institute for International and Public Affairs.
In 2013, after a prolonged campus-wide divestment campaign led by student groups, The Corporation of Brown University rejected a proposal to divest from the 15 largest coal companies in the United States. Paxson reasoned that the investments were too small to have an economic impact on the industry.
At nearby Rhode Island School of Design, however, student protests influenced the board of trustees to divest its endowment in 2015.
Paxson said the change of heart to pull assets from coal and other fossil-fuel companies wasn’t prompted by activism but by the realization that fossil-fuel companies are bad investments.
“The decision to halt investments in fossil fuel extraction companies reflects the view that, as the world shifts to sustainable energy sources, investments in fossil fuels carry too much long-term financial risk,” Paxson wrote in a March 4 letter.
Paxson also told The Brown Daily Herald that student activism is “very much part of growing awareness that fossil fuels are not the future.” Paxson said she intentionally didn’t use the word divestment in the announcement because “of its political connotations on campus,” according to newspaper.
Climate activists are nonetheless pleased with the outcome but not necessarily the process.
Brown University senior Galen Hall, a member of the campus group Brown Climate Action Now, called the investment decision “a great start.” But he noted the distinction between divesting and selling fossil-fuel assets. Divesting requires a formal written policy from the school that money managers must follow perpetually. Brown University has approved policies to divest from the tobacco industry and companies that do business in South Sudan. The recent selling of fossil-fuel assets, however, is simply a decision by the investment office based on market conditions.
“It’s good we decided to sell these stocks, but why not take the next step and divest permanently?” Hall asked.
Community organizer, environmental advocate, and former state representative Aaron Regunberg said it’s a proud day to be a Brown University graduate. He noted that divestment and other substantial actions are required in the next few years “to save our civilization from the very worst, most catastrophic effects of the climate crisis.”
“I’m feeling very grateful to the administration for making this moral choice,” Regunberg said. “And I’m even more grateful to the countless student activists and alums who have been organizing and advocating for this victory going all the way back to my days as an undergrad.”
Hall noted that the Paxson administration could do more to help climate justice neighborhoods in Providence. His group also wants Brown to cut ties with fossil-fuel companies that support the school, such as ExxonMobil.
Brown University is instead taking a more measured approach to investing by buying assets that adhere to environmental, social, and governance (ESG) criteria.
“This proactive, engaged approach to investing is consistent with Brown’s values, and is aligned with our other actions on campus and in the Rhode Island community,” Paxson said.
She highlighted a number of the school’s environmental initiatives such as a March 6 student-led conference on ESG investing and investment banking called FSI Con.
She also announced the university’s involvement in a new coalition of businesses and community organizations that will address sea-level rise in vulnerable parts of the city, such as the Jewelry District. The Providence Resilience Partnership is led by former head of the Environmental Protection Agency’s New England office, Curt Spalding. The organization will be based at the Institute at Brown for Environment and Society and includes the University of Rhode Island Coastal Resources Center, the Providence Foundation, and WaterFire Providence.
Brown University also announced last February that it intends to reduce campus climate emissions by 75 percent by 2025 and achieve net-zero emissions by 2040.
“Although there is a clear consensus in our community that climate change is an urgent threat, there are multiple views — and at times fierce disagreements — about the best political, social, and technological strategies and tactics to employ to move the world away from fossil fuels,” Paxson said. “There is no place better than a university campus to discuss and debate these disparate views.”
its good news and the student divestment movement can take some credit for helping Brown and many others see that fossil fuels are going to be bad investments. Brown U also deserves credit for its transportation policies that encourage biking (e.g. availability of bike parking) and transit use, (students, faculty staff get the Brown IDs to serve as transit passes) policies that can actually reduce the demand for fossil fuels and that the public colleges should also be doing (but don’t) – especially URI-Providence that has good transit access from everywhere but instead promotes "free" parking for all faculty, students, staff in garages. (also a regressive policy in that those who cannot afford cars get no benefit)