Divestment: A Tool for Environmental Change

April 11, 2018

Most Exonians have a relatively small carbon footprint. Exeter is a community where the vast majority of students and faculty walk to class, live in the same building with dozens of other people, and are well educated about the serious threat which climate change poses. Afterall, there are numerous clubs on campus whose goal is sustainability and the administration is so dedicated to educating students on climate change that an entire day each year is set aside for lectures and workshops on the topic. From the outside, it would appear that PEA’s dedication to sustainability is admirable. However, if we look behind the scenes, the picture is much less clear, like water thickened by oil.

               In order to grow our endowment, which is the world’s largest for an independent school, the trustees have invested the money in a series of exclusive, as well as confidential, trust funds. Given PEA’s wealth, these funds are obviously very profitable. However, one of the conditions of the agreement between the trustees and the managers of these funds is that the school is not allowed to disclose any information about the companies of which these funds are comprised. On top of this, the trustees are not allowed to pick and choose which companies they would like to invest in; they must buy into these funds as a whole. This means that as members of the Exeter community, including the alums who donate the money in the first place, we have no way of finding out whether or not the school’s money is being invested in large oil companies. While this situation seems sketchy, it is not so easy for the school to disassociate themselves from these funds. The trustees have the unenviable task of weighing the profits that result from such exclusive funds against the possibility that these investments are indirectly contributing to the production of greenhouse gasses.

               It may seem as though Exonians have little control over how our school’s money is invested. In addition, it is possible that the trustees themselves have little control over the makeup of the most desirable trust funds. However, divestment has been a tool for change in the past. In the mid-80’s, high school and college students were outraged by the existence of apartheid in South Africa. Many students at boarding schools and colleges in the New England staged sit-ins and protests, imploring their school’s to divest from companies who did business with the South African government. Ultimately, the economic pressures that embargos and divestment inflicted on the apartheid government caused the regime to fall. Trustees can seem like the most untouchable members of any boarding school community, but they can be influenced.

               I am not saying that we should all take to the streets tomorrow and demand that the trustees overhaul their entire investment strategy. That being said, the idea that the allocation of our donor’s money is up to a third party who may not have the goal of sustainability at heart is troubling. If institutions like Phillips Exeter--who are both dedicated to the goal of sustainability as well as incredibly wealthy--don’t take the lead in divesting from oil companies, it is hard to say who will.