L ast Tuesday, President Amy Gutmann sent an email to the Penn community about the launch of Climate Action Plan 2.0. Despite its account of previous accomplishments and plans for the next five years, CAP 2.0 falls short of the mark. To be a genuine climate action leader, Penn must divest its endowment from fossil fuels and reinvest in clean energy.
According to The Daily Pennsylvanian, Penn’s endowment grossed $9.6 billion as of June 2014. About 4 percent of this amount is invested directly in “natural resources” assets along with other investments in fossil fuel equities and commingled funds, according to the 2012-13 Annual Financial Report. While our University commits to reducing emissions on a local scale, it is hypocritical for us to continue financing and profiting from the fossil fuel companies that are destroying the environment on a global scale.
This is not just the environment in a scientist’s climate model. Climate change impacts are real and are happening right now. The World Health Organization estimates that climate change — through extreme weather conditions, increased disease transmission and food production disruptions — already kills 150,000 people every year. Yet the fossil fuel industry keeps pouring money to promote faulty “science” and lobby against sustainable policies. These companies are committing a moral evil, and so is Penn as long as we invest in them.
But what about “fiduciary duty” — Penn’s obligation to its donors to maximize long-term returns for advancing the University’s mission? When interviewed by the DP, Penn’s Chief Investment Officer Peter Ammon emphasized the endowment’s long “time horizon” and the importance of being “well-positioned for long-term success.” With this mindset, fiduciary responsibility is fully consistent with fossil fuel divestment. According to a report by the Carbon Tracker Initiative and the London School of Economics, up to 80 percent of current fossil fuel reserves must remain unburned to avoid catastrophic global warming. Since a fossil fuel company’s valuations are based on its proven reserves, the entire fossil fuel industry is extremely overvalued. By divesting, Penn can actively protect its endowment from the massive carbon bubble — an important step to ensure “long-term success.” We can make money and keep our morals too.
Amy Gutmann calls Penn an “environmental leader among American colleges and universities.” Yet we see 14 other colleges and universities already leading the way by divesting their endowments or committing to do so. The Climate Action Plan 2.0 calls for “bold progress,” recognizing that “as a leader in higher education and in the larger culture, Penn has a responsibility to take risks, ask difficult questions, and put our highest values into practice.” The University can reclaim this leadership role by removing its funds from the industry that nullifies all of our progress from CAP 2.0. We are asking the difficult questions, and it’s time for Penn to take this risk with us. Let’s put our highest values into pr actice and align our investments with our morals .
Will Johnson and Thomas Lee are sophomores in Engineering and M&T, respectively. Their email addresses are email@example.com and firstname.lastname@example.org. They are members of Fossil Free Penn, which is a campus group advocating for the University endowment to be divested from fossil fuels.Comments powered by Disqus
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