XL Dissent

This past weekend Unity College students rallied alongside the approximate 1,200 students who traveled from 100 colleges and universities throughout the nation to attend XL Dissent.

XL Dissent*not sponsored by Unity College*

Unity Magazine: Divestment Issue

The fall 2013 issue of our Unity Magazine focuses on Unity’s leadership in the divestment movement from a wide range of perspectives.  The magazine includes articles from guest writers Bill McKibben of 350.org and Dan Apfel of the Responsible Endowments Coalition.  Read on.


Unity College at Forward on Climate

Divestment at Unity

First To Divest

We’ve gotten a lot of deserved attention for our recent fossil fuel divestment announcement. By now there are nearly three hundred (and climbing) divestment campaigns – mostly student-led – at colleges all over the country. The aim, as you no doubt know by now, is to keep our endowment money from supporting the fossil fuel industry through stock purchases or other financial investment. As a college fully dedicated to sustainability science education that meets climate change head on, our Board of Trustees and administration have asserted that we cannot directly support an industry that has as its core business model, the destruction of the planet. You can read all about the decision to divest on Unity’s website. But let’s explore below what this actually means for the College.

Endowment Basics:  Stewardship of the endowment is a primary function of the College’s Board of Trustees; they make sure it’s invested wisely to support the central aim of the institution in perpetuity – namely, providing an education for our students. We don’t spend the endowment directly on operations at the College. Rather, we invest the money in stocks and funds, and use the profitable return on those investments to offset operating expenses. A big chunk of those expenses for us – more than $4 million – is direct financial aid for students. With our 2011 endowment gift of $10 million, we expect about half a million dollars of income from investment profits per year. So essentially, we’re investing our endowment to help pay for our students’ education.

College Finances: It may be helpful to think about Unity’s annual budget picture more broadly. Consider the revenue side (see figure below): tuition and fees, auxiliary enterprises (e.g., bookstore and dining sales), grants, gifts, and endowment investment income (green at the top) amount to about $18 million a year. As mentioned, we give more than $4 million of that in financial aid to students (black at the bottom), bringing our net revenue down to roughly $14 million annually. Over the last few years, we’ve spent just about that amount to run the school – the expense side: instruction, student services, institutional support/administration, facilities/physical plant, debt payments, and additional scholarships, etc.. $14 million in, $14 million out, a balanced budget.

Revenue and Endowment

Endowment practices impact revenue. The more money we can make off of our endowment investments, the bigger the endowment draw we can add into our annual operating budget on the revenue side – adding more to the top (green) to offset what we give back to students in institutional aid. As with many small private schools, Unity is a tuition-driven college, and the bulk of our annual operating budget comes from tuition and fees with only a small fraction coming from investment revenue. As you might imagine, colleges and universities with greater percentages of their revenue coming from endowment draw might find challenges to their traditional investment practices unsettling. After all, these Board and Foundation stewards have been doing their best to maximize return and reduce risk for their institutions – often relying on a presumed sure bet: fossil fuel investments.

Divestment at Unity: About five years ago, our Board of Trustees made a concerted effort with our investment manager to move away from what they called “big energy” investments, citing Unity’s focus on environmental and sustainability programming and an interest in pursuing clean energy investments. At the time, an estimated 10% of Unity’s endowment was invested in fossil fuels. By 2012, only 2.5% of the investment portfolio was supporting the fossil fuel industry. When we caught wind of last fall’s Do the Math Tour and related divestment campaign, we knew we had already done most of the math. A review of our current holdings against the Carbon Tracker Initiative’s list of 200 companies with the greatest fossil fuel reserves mapped out a clear path to minimize portfolio exposure to fossil fuels: avoid investments in those 200 companies, and shift exchange traded funds (ETFs) where possible to non-energy sectors. Debbie Cronin, Unity’s VP for Finance & Administration, explains:

Investments in emerging international countries cannot be moved specifically out of fossil fuels, as there are no sector-specific ETFs at this time. Thus, the endowment target is <1%, not 0, as the emerging international sector needs some fossil fuel tolerance.

The loudest recent objection to college and university divestment is a concern that moving funds from fossil fuels will negatively impact endowment returns. Unity’s experience drawing down investments in “big energy” over the last many years suggests otherwise; even through the market downturn, our returns tracked with market benchmarks. The recent Aperio Group study, “Do the Investment Math,” demonstrates that the impact on returns from screening out fossil fuels is minimal, and the risk – though higher than conventional investment – is much lower than commonly asserted by divestment skeptics.

We’re fortunate at Unity College to have a Board of Trustees committed to the sustainability mission of the college. And Cronin points out that having a flexible, proactive fund manager is key to a successful divestment effort.

For more on fossil fuel divestment and Unity’s leadership on the issue, join Sustainability Director, Jesse Pyles, and representatives from 350.org and the Responsible Endowments Coalition on February 26th for the upcoming AASHE Webinar, “Investment and Divestment: Making Sustainable Choices with Campus Endowments.”

Tar Sands Action – Portland, January 26

An open letter to college and university presidents about divestment from fossil fuels

13 November 2012

Stephen Mulkey

Dear Colleagues,

On the 5th of November 2012, the Unity College Board of Trustees unanimously voted to divest our endowment from fossil fuel industries.  While one might think that this was logical for a college where Sustainability Science structures the academic program, it was not easy.   Indeed, the Board’s committee on investment carefully reviewed the potential fiduciary impact of this action.  Some members of the Board were uncomfortable with the choice to close off this source of revenue at a time when the College needs every penny.  In the end, the Board embraced our ethical obligation to stop supporting an industry that has repeatedly demonstrated a lack of commitment to future generations.  I write this letter to urge you to raise this crucially important issue with your governing body.

Why should colleges and universities divest?  It is increasingly clear that climate change will be the defining environmental factor of what will come to be seen as the environmental century.  Recent work at the National Center for Atmospheric Research indicates that our current rate of emissions will carry us beyond 7°F average global warming by 2100.  Other studies show that warming may be more than 9°F.

Either way, this level of warming is catastrophic.  The current generation of college students will experience a dangerously disrupted climate by mid-century.  We must provide strong incentives for fossil fuel industries to invest their gargantuan profits in alternative and renewable energy rather than in the development of new and increasingly marginal sources of fossil fuels.

Your institution must not be on the wrong side of this issue.  Given the recent decade of extreme temperatures and catastrophic weather, America is waking up.  In the near future, the political tide will turn and the public will demand action on climate change.   Our students are already demanding action, and we must not ignore them.  As college presidents, we are committed to the highest standards of honesty and integrity.  Failure to provide ethical leadership on an issue that has the potential to be the most profoundly negative factor in the lives of our students is unacceptable.

Financial managers may complain that divestment will be complicated and insurmountably onerous.  However, it takes no more effort to manage a portfolio for minimum exposure to fossil fuels than it does to manage for maximum market return – and these two goals can coexist.  Admittedly, markets are more complex today than in the time of divestment from companies associated with apartheid.  Depending on your particular mix of investment tools, achieving an absolute zero fossil fuel return may be difficult.  Unity College has chosen to strongly bias its portfolio away from such investments, and we are confident that we can achieve a negligible exposure to fossil fuels.  We also believe that under current market conditions our overall portfolio will generally not perform more poorly than the market average while holding true to our promise to divest.

All board members are acutely aware of their fiduciary responsibilities to the institution, and they will want assurances that investment practices bring an appropriate return.  While endowments must be managed to insure growth, we must turn away from the embedded acceptance of the notion of profits at any price.

Regardless of financial considerations, we must demand the highest ethical standards from our universities and colleges. It is ethically indefensible that an institution dedicated to the proposition of the renewal of civilization would simultaneously invest in its destruction.  In this respect, divestment is not optional.  As presidents, you do not control your institution’s investment policy, but you do have great influence.  Urge your board to take a stand and make it possible for your institution to speak from a position of integrity.


Stephen Mulkey
Unity College
Unity, ME 04988

Unity College Board of Trustees votes to divest from fossil fuels

I am proud to say that earlier today the Unity College Board of Trustees voted to divest the College endowment from fossil fuels.  The following editorial is my statement to the public about this important step.

Time for higher education to take a stand on climate

Stephen Mulkey

Stephen Mulkey
Unity College
Unity, ME 04988

5 November 2012

We are running out of time.  While our public policy makers equivocate and avoid the topic of climate change, the window of opportunity for salvaging a livable planet for our children and grandchildren is rapidly closing.

The way forward is clear, though for many confrontation-averse academics the path seems impassable.  It requires action that is unnatural to the scientifically initiated:  to fight to regain the territory illegitimately occupied by the climate change deniers.

Every day that we avoid taking action represents additional emissions, and additional infrastructure that is dependent on our fossil fuel based economy.  In our zeal to be collegial, we engage with those who are paid by vested interests to argue that our Earth is not in crisis.  When these individuals demonize public investment in alternative energy, we fail to point out how the oil industry benefited from significant taxpayer support in its infancy and continues to receive government subsidies today.  We also sidestep the thorny issue of how oil and coal, in particular, fund large-scale organized opposition efforts to deny legitimate science, winning the battle for climate change public opinion with slogans, junk science, and money.

While there is much uncertainty about how climate change will play out with respect to specific regions and weather patterns, one thing is very clear:  Our current emissions trajectory will carry us beyond 5oC average global warming by 2100.   This will be a planet that is not consistent with our civilization and science shows us that the impact will be largely irreversible for a millennium.  I don’t know how the stakes could get any higher.

Higher education is positioned to determine the future by training a generation of problem solvers.  As educators, we have an obligation to do so. Unlike any time in the history of higher education, we must now produce leading-edge professionals who are able to integrate knowledge from multiple disciplines, and understand social, economic, and resource tradeoffs among possible solutions.  Imagine being a college president and looking in the mirror twenty years from now.  What would you see?  Would you be looking at a professional who did his or her best to avert catastrophe?  For me, the alternative is unacceptable.

Those within higher education must now do something they have largely avoided at all costs: confront the policy makers who refuse to accept scientific reality.  We must be willing to lead by example. Like the colleges and universities of the 1980’s that disinvested from apartheid South African interests – and successfully pressured the South African government to dismantle the apartheid system – we must be willing to exclude fossil fuels from our investment portfolios. We must divest.

The colleges and universities of this nation have billions invested in fossil fuels. Like the funding of public campaigns to deny climate change, such investments are fundamentally unethical.  The Terrifying Math of the 350.org campaign is based on realistic, reviewed science. Moreover, in our country it is clear that economic pressure gets results where other means fail. If we are to honor our commitment to the future, divestment is not optional.  This is especially true for Unity College, where Sustainability Science, as developed by the U.S. National Academy of Science, guides our academic mission.

I am proud to be a part of the 350.org program of divestment, and I am especially proud of the Unity College Board of Trustees for their willingness to make this affiliation.  Indeed, the Trustees have been on the path of divestment for over five years.  The Trustees have looked at the College’s finances in the context of our ethical obligation to our students, and they have chosen to make a stand.   I can think of no stronger statement about the mission of Unity College.

Our college community will lead by fearless action.  We will confront policy makers who continue to deny the existence of climate change.  We will encourage those who work in higher education to bravely step out from behind manicured, taxpayer funded hedges, and do what needs to be done.   We will not equivocate, and we will meet those who have been misled by climate change denial in their communities.

The time is long overdue for all investors to take a hard look at the consequences of supporting an industry that persists in employing a destructive business model.  Because of its infrastructure and enormous economic clout, fossil fuel corporations could pump trillions into the development of alternative energy. Government subsidies and stockholder shares could be used constructively to move these corporations to behave responsibly.

Higher education is the crown jewel of the United States system of education, and it remains the envy of the world.  Higher education has always been dedicated to the highest standards of honesty and integrity.  If our nation’s colleges and universities will not take a stand now, who will?


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