Thirty-two years ago, the University of Maine System was one of the first 10 universities in the United States to pull the system’s principle portfolio money — $3 million — entirely out of corporations and banks doing business in apartheid South Africa. Twelve years later, in 1994, South Africa had a multi-racial democratic election, selecting Nelson Mandela as president.
The University of Maine System’s divestment was the part of the spark that ignited the anti-apartheid movement, giving it the extra push it needed. Now, the UMS is facing a different divestment call: to stop investing in fossil fuel companies, which contribute to climate change.
On Thursday, Feb. 27 at 1 p.m. UMaine student group Divest UMaine will present to the UMS board of trustees and demand “immediate freezing of all new assets invested in the top 200 fossil fuel companies and their remaining endowments with fossil fuel companies within the next five years.” They then will ask the board to reinvest in a sustainable, socially responsible alternative, according to a press release from the group on Friday.
Divestment is a national movement encouraging universities’ and colleges’ endowment controllers to withdraw their investments from unfavorable causes. The movement has been used as a tool for social awareness and to make a stand against corporations, such as those operating in 1982 apartheid South Africa or those producing fossil fuels today.
“It’s a fairly novel way to get the message across to fossil fuel companies,” said Daniel Dixon, University of Maine sustainability coordinator. “It says ‘We are noticing what they are doing, we care about the environment and we want them to respond in an appropriate manner, like cleaning up their act,’” he said.
The UMS is made up of seven schools. The UMS board of trustees controls the endowment for the entire system. Of the endowment, $7.5 million dollars are invested in the some of the top 200 fossil fuel companies. Nine colleges in the U.S. have committed to fossil fuel divestment thus far, two of them — Unity College and College of the Atlantic — in Maine.
To further the fossil fuel divestment movement throughout Maine, student representatives from every school in the state gather as part of Maine Students for Climate Justice, with the University of Southern Maine and the University of Maine being two leaders in the group.
With the upcoming meeting, UMS board of trustees Chancellor James Page released a letter to the “university community” in February regarding the board’s views on divestment from fossil fuels. In the letter he explained the University of Maine System’s stewardship of the environment is important to the entire community. Page cites sustainable design principles and utilizing renewable energy sources as example of their commitment to sustainability.
“Perhaps most importantly,” Page wrote, “our dedicated teaching and research programs are instilling core values of sustainability in our students and communities.”
Education is also an important tool for the Divest UMaine group who plans to use it to “craft a better future for ourselves, and a better world for others. That is our reason for paying tuition; we are investing in our futures,” according to the groups press release.
“With this said, we cannot allow the UMaine system to continue to invest our endowment in industries that will make our collective future unlivable. In fact divesting the UMaine system endowment would be consistent with our institution’s mission statement,” the release states.
The University of Maine mission statement includes text stating: “The University of Maine improves the quality of life for people in Maine and around the world, and promotes responsible stewardship of human, natural and financial resources.”
Doug Allen, professor of philosophy at UMaine, was a part of the anti-apartheid divestment movement at UMaine in 1982. The greatest benefit to divestment for Allen is “that we [UMS] do what is right — that we act consistently with the overwhelming scientific and environmental evidence and that we affirm we are an educational institution with values that, educates its students to become human beings and citizens with deep concerns and values,” he said.
Connor Scott, business management student and member of Divest UMaine, The Green Team and Maine Students for Climate Justice, sees divesting from fossil fuels as the next step in the university’s already positive direction.
“We’re staying in line with what we’re already doing. But we’re also helping invest in Maine,” he said.
“It’s not just about money anymore; it’s about the health of society.”
The financial argument for divestment is on the top of the list for both the board of trustees and Divest UMaine.
In Page’s letter, he explained that the university’s Investment Committee has reviewed its portfolios and worked to determine the financial impact of fossil fuel divestment.
“We learned that if we divested of fossil fuels at this time, investment opportunities would be limited and wholesale changes to the portfolios would be required. Such changes would negatively alter the return, risk and diversification profile of our portfolios. Negatively altering returns would adversely impact amounts available for student aid and other critical needs,” he wrote.
According to Dixon, “A green portfolio can at least match your current investment [returns] in the short term and out-perform in the long-term.”
Dixon explained that the board of trustees has the financial burden of securing money for pensions and the university every year; they are, according to Dixon, “understandably careful [with] what they do with that money.”
Mark Anderson, UMaine economics professor specializing in higher education, thinks the financial impacts on the university itself are “not very significant.”
“Endowment is less important for public universities and colleges than it is for private colleges and universities. By divesting in fossil fuels maybe you [would make] a little bit less money,” he said.
Yet finances are only one layer of the argument for divestment from fossil fuels. Moral obligations are also a consideration.
“It’s not just money anymore; it’s about the health of society,” Dixon said.
“We don’t have a tomorrow unless we change today.”
In 2005 the Kyoto Protocol, an international agreement linked to the United Nations Framework Convention on Climate Change, entered into force. According to this United Nations framework, “Recognizing that developed countries are principally responsible for the current high levels of Greenhouse Gas emissions in the atmosphere as a result of more than 150 years of industrial activity, the Protocol places a heavier burden on developed nations under the principle of ‘common but differentiated responsibilities.’”
With Kyoto Protocol and increasing evidence of climate change, president of the Green Team at UMaine Samantha Perez is calling for change at a local level. “UMS is still profiting from the wreckage of the planet — to me that’s a little absurd,” she said.
Dixon, who also has researched climate change through the Climate Change Institute for 12 years said, “The health of society has to come before the economy, or there won’t be an economy, anyway.”
For Scott, divestment from fossil fuels targets the root of the problem, sending a message that UMaine wants to find a clear solution, which will in turn show people they “can make a change on a personal level.”
“It gives us a solution to the problem rather than putting a band aid on it, we don’t have a tomorrow unless we change it today,” he said.
“It’s so much about a love of place.”
As a national leader in sustainability, The University of Maine began its commitment to the environment with its inception as a land-grant university in 1865. According to Dixon, one part of UMaine’s primary mission is public service, what he calls a “core tenet of sustainability. Improving society is inextricably linked [to UMaine] ever since our inception,” he said.
For Scott, divesting in fossil fuels is a way to make sure our natural resources still play an important role in Maine life for generations to come.
“It’s not divesting for divestment’s sake. It is so much about love of place and love of nature. Maine is one of the most prideful states ever. Being able to support and promote and love where you’re from is important — preserving what we have and starting to make a cultural change,” he said.
According to Scott, divesting the University of Maine System is framework and starting point for a conversation about connecting people with their environments.
An example of success
Unity College, in Unity, Maine, was the first college or university in the nation to divest from fossil fuel companies. In November 2012, with the direction of school President Stephen Mulkey, the school finished divesting close to 100 percent of their portfolio from fossil fuel.
The college reported more than a year later that their portfolio had not suffered as a result of divesting in fossil fuels
According to Deborah Cronin, Unity College vice president of Finance and Administration, “over the past five years the portfolio has met or exceeded market benchmarks despite the shift away from fossil fuel holdings. The college’s endowment is managed for the long-term benefit of the college, and it is anticipated that investment earnings will meet long-term market performance benchmarks,” she said.
What’s Next?
“If the system divests we will be one of the greenest college systems in the entire United States,” Dixon said.
Divest UMaine will address the USM board of trustees on Feb. 27 at 1 p.m. in Bangor. They will ask the board to form an ad hoc committee to research and consider divestment from all top 200 fossil fuel companies within five years. If the proposal is accepted the committee will report back in May, when the board of trustees will vote.
“It would be great for the university — something we could be proud of,” Dixon said. “It would serve as an example for other institutions that are afraid of making such a step. If we can prove it can be done with zero risk and zero loss of money. I think there will be many others that follow.”