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The Scarlet & Black

The Scarlet & Black

Feven Getachew
Feven Getachew
May 6, 2024
Michael Lozada
Michael Lozada
May 6, 2024
Nathan Hoffman
Nathan Hoffman
May 6, 2024
Harvey Wilhelm `24.
Harvey Wilhelm
May 6, 2024

Letter to the editor: The case for divestment

The Fossil Fuels and Climate Impact Task Force, established by the Board of Trustees of Grinnell College,  has completed another round of open dialogue with the community. This marks a critical moment for establishing clarity about what student organizers mean when we talk about divestment. While I am not a member of Grinnell College Student Action (GCSA) or Grinnell Divest, I have extensive experience with climate organizing off-campus, including a community institution divest campaign through an organization linked with the 350 Massachusetts coalition. My experience in non-Grinnell climate activism has taught me something crucial about divestment:  It’s not just about the environment!

I am writing to consider the following perspective: that the global discourse of climate change, including that of our Grinnell community, glosses over the stark political implications of the fossil fuel industry while simultaneously mythologizing which efforts are effective in protecting the environment.

While attending the Task Force sessions on Grinnell’s endowment and investments, I carefully listened to the various concerns held as truths by The Board: Trustees (as well as faculty and students) voiced tensions surrounding the idea of putting our endowment at risk, fearing a backlash which might lead to a decrease in student financial aid. A robust discussion of shareholder influence, the idea that Grinnell might maintain our direct holdings in detrimental industries so that we can proxy vote on their board decisions and hopefully change the companies for good, also infused the debate. The panel voiced their interest in clean energy: firstly, they asked, what does divestment accomplish that decreasing our campus’ carbon footprint does not? Secondly, how do we address companies who are making an effort to switch to clean energy and might deserve our investments?

It’s important that we recognize difference of opinion among the members of the Board. I am certain that the members really care about these issues and hope to do what’s best for our community. However, in reflecting upon my experiences, I’m worried that we cannot do what is best for our community while holding assumptions about what divestment means. We must move beyond the myths of the economic dangers of divestment and the presumed benevolent intent of the industries that are most complacent in injustice. In fact, The three main anxieties listed above very clearly reveal that Grinnell College has a fundamental misunderstanding of divestment as a political tool.

In truth, the fossil fuel industry’s egregious policies and impact reach far beyond the simplistic label of climate change. As of 2008, 51 members of federal congressional committees overseeing the fossil fuel industry had substantial personal holdings in oil companies. Trump’s cabinet also maintains a constant economic interest in the fossil fuel industry; Right-wing figures such as Steve Bannon, Rex Tillerson and Jeff Sessions all hold pivotal and profitable roles in the oil industry. Even Trump himself raised over 10% of his campaign funding from oil, gas and coal companies. It is apparent that lobbying and donations from such companies play a significant role in keeping conservatives in positions of public power. The establishment, maintenance and execution of right-wing ideology and its material effects on the lives of people are all made possible with money from fossil fuel corporations.

This political corruption also permeates the everyday lives of people worldwide who are excluded from systems of justice. I believe that in order to truly understand the impact of divestment and carbon footprint on the communities of our world we must listen to and understand the stories of those most directly affected by the political systems upheld by the fossil fuel industry.

Stories of Political Corruption at a Local Level

In a NoDAPL organizing meeting this past winter at Drake Library in Grinnell, I met several iowan farmers whose land had been seized by Energy Transfer Partners, LLC. for the purpose of building the Bakken Pipeline. While these farmers held a wide range of political views, they all experienced a similar pattern: when petitioning to local government against the use of eminent domain to claim their land, they all found a virtual complete shutdown of city and county government. City councils dodged meetings. Permit offices neglected surveying property without the supervision of pipeline engineers and private security. In one case, local officials even voiced that they feared a challenge to Energy Transfer Partners’ permits would be met with economic destruction of the area and a restructuring of political power. The energy company seemed to be literally holding local government hostage for the duration of pipeline construction. While these stories are appallingly undemocratic, they represent only a fraction of the oil and coal industry’s co-opting of government structures: we can’t talk about this issue without talking about the Standing Rock Movement.

On November 28, 2016, 15 indigenous leaders of the Water Protectors’ movement converged in Herrick Chapel to discuss the legacy of Standing Rock and the global movement for indigenous environmental self-determination, as well as their call for institutions to divest from fossil fuels and Wells Fargo bank. In addition to telling their incredible stories of resistance, the Water Protectors described the complicity of local, state and federal government in the violence perpetrated against indigenous movements. Further research details how the private security firm TigerSwan used fossil fuel interests and government policing resources to engage in “counterterrorism-style surveillance” of Standing Rock and ultimately aided police in violently and illegally attacking thousands of peaceful indigenous demonstrators and their allies. In North Dakota, just as in Iowa, public institutions were used as an arm of Energy Transfer Partners, LLC to force people off their own land.

With racial and class disparity in terms of pollution, access to resources and sea level rise, it is clear that climate change kills poor communities of color first. This past Spring, I attended a panel discussion on international water rights at the Jewish Voice for Peace national conference in Chicago, at which I met Monica Lewis-Patrick, a prominent water rights activist. Lewis-Patrick described, along with her organizing efforts, the racialized nature of water and energy companies’ control over Michigan governments. She explained that environmental injustice underscores a much more deeply and intentionally racist pattern than disparate access to resources. She detailed how corporate control of governments led local water systems to be privately operated by companies that purposefully and knowingly deprived communities of color of clean water. She also revealed a less well-known story of how residents who could not afford to pay for poisoned water in addition to bottled water would immediately have their water shut down by the municipalities, whereas in wealthier, whiter communities residents would receive months of notices before losing their water. Without running water in their homes, residents were subject to home foreclosures due to unsafe living conditions.

I am revealing these three stories as they were told to me because of what they all share: a local government completely and intentionally compromised by racist, classist corporate interests related to energy or utilities companies. This is exactly what distinguishes fossil fuel divestment from reducing our carbon footprint and from shareholder activism. If an energy company switches entirely to clean energy and commits to reducing carbon in the atmosphere, how do we address its legacy of corruption? Are we fine with a company deliberately eroding bureaucratic processes to further their profits while destroying communities of color, poor communities and people in the Global South, just as long as they do it without burning oil? Are we really content with using our shares to attempt to slowly change company decisions, while still enabling those companies to maintain political leverage?

Disparagingly, these three stories represent the tip of the iceberg in a global system of fossil fuel’s corporate rule of government. There are far too many stories to share here, and none of these stories are mine to tell; I pass on this information from frontline community activists because I don’t think the Grinnell community has sufficiently listened to them.

As of my writing this, the Task Force’s public events have included the Investment Office discussing the College’s endowment and operating budget and representatives of Alliant Energy and Berkshire Hathaway Energy discussing clean energy practices. The events have overwhelmingly focused on alternatives to divestment. There is an absolutely heinous lack of evidence that any climate activists from poor, POC, colonized or other targeted communities will be invited to have a place in the official discussions.

I applaud Board members who want to do what’s best for the College and the world, but I think many students are coming to the conclusion that the Task Force’s main effect is distracting our community from the issue of divestment in order to quell the intense public pressure that students have amassed. The conversation of divestment came from direct action, not from Board discussions.

In Perpetuity

So how can we begin to address the horrors of the fossil fuel industry and fight their hold over worldwide politics? Consider the political power of large tobacco companies throughout the 20th century. Activists had to use unique tactics to fight tobacco corruption because product’s direct relationship to consumers, but many similarities still exist between tobacco and big oil powers. A World Health Organization study of the tobacco industry’s strategies for maintaining relevancy and influence identifies 14 main tactics, 13 of which are related to convincing the public of their innocence or using money to influence politics at all levels. In this case, a community coming together and agreeing not to smoke would have achieved almost nothing without a co-ordinated action that challenged tobacco’s hold over politics. Such an action is what we need now to fight fossil fuel’s hold over politics, and that action is divestment.

Fossil fuel divestment is a global movement endorsed by countless activists and organizations, including Desmond Tutu of the South African Apartheid Boycott Movement (in which divestment played a major role), the Movement For Black Lives, environmental justice groups, the Standing Rock Movement, labor unions, religious groups, LGBTQIA+ groups and more. These groups do not only endorse divestment because they see climate change as a threat; they demand divestment from fossil fuels and positive reinvestment because they see firsthand how the fossil fuel industry harms their communities. Standing for divestment is standing in solidarity with those who see fossil fuel corporations as an impasse to achieving any form of justice.

Even in terms of higher education, we would not be alone. More than 110 universities, 36 of which are in the US, have committed to full or partial divestment from fossil fuels. Furthermore, Grinnell has the unique position of being internationally renowned for its endowment. We would send a message to our peer institutions and to cutting-edge investors worldwide that limiting exposure to fossil fuel companies is a viable option, hastening the struggle for other institutions. We would help set a precedence for stigmatizing political donations from oil companies. Divestment is not a local moral statement. It is a collective action that fights unjust political power as well as climate change.

Even with all of the above information about divestment as a political tactic to address injustices far beyond climate change, we still haven’t addressed a main concern of the Trustees: is it really worth risking our financial aid? Thankfully, as CFO Kate Walker believes, financial aid would most likely be among the last areas in which we would decrease spending if the endowment dropped. Walker nevertheless presented a concerning model: if our endowment took a 1% loss in market value, we would feel negative effects on our yearly operating budget as long as three years after. What would that look like compared to now? As Walker reported, our current model’s goal for the endowment factors in a conservative 2% growth above the previous year’s market value. This year, however, our endowment grew an astonishing 18.8 percent! These estimations are all very rough, but it is clear that our returns would have to be at least around 18 percent lower than they were this year in order for us to feel the effect of Walker’s model. I believe this would be a very unlikely result of divestment alone, especially considering that our endowment only includes 2.4% fossil fuel investments.

Not only is our endowment incredibly strong; fossil fuel divestment may not actually harm it. Various studies have found that there is no evidence that portfolios including fossil fuels net more money than those without, and that the risk involved in investing only increases marginally in fossil free portfolios. Furthermore, many experts believe that fossil fuel stocks are currently over-valued due to dishonestly high estimations of consumer demand and of the ability to continue extracting fuel from the earth. This has created an “investment bubble” that could pop in the near future, causing the value of portfolios including fossil fuels to suddenly plummet. We may in fact be risking the endowment by maintaining irresponsible investments in fossil fuels because of their current high level of return.

The question remains of where we draw the line: many commitments for divestment include only the “Carbon Underground 200” list of top coal, oil and gas companies. Answering the Water Protectors’ call for solidarity, however, I would certainly add to this list banks such as Wells Fargo that directly fund pipeline construction projects. I would love to see the Grinnell Trustees divest from prisons, corporate agriculture and meat industries, the Israeli occupation, weapons manufacturers, Nestle and any companies with horrific labor practices (this list goes on). This is unfortunately not a realistic ask for me as an individual to make. But it reveals the need for careful reinvestment and for discourse that does not isolate fossil fuels as the only unjust industry that we should divest from. Especially considering Grinnell College’s reliance on prison labor for our furniture, transferring exposure from fossil fuels to private prisons accomplishes nothing. I hope that we do consider the broad network of companies and banks who are deeply involved in fossil fuel extraction and the industry’s political power, and transfer our investments to more socially responsible areas.

Overall, I believe we must recognize that divestment goes beyond climate change and attempts to stand in solidarity with all those affected by corporate control of governments. It is imperative that we fully consider the issues at hand, and I hope that the panel discussions on divestment do lead to productive action. We can’t forget that this entire discussion was brought to us by student activists, and I doubt students would be afraid to continue exerting public pressure on the college’s investment decisions. In her presentation on Grinnell’s operating budget, Kate Walker stated that we “can’t rob the students of the future for what we want to do today.” Given that the humanitarian organization DARA estimates that 6 million people will die each year due to climate change and carbon pollution by 2030, I believe that we are compromising the students of the future if we don’t make the social and political statement that our society will no longer accept the evils of the fossil fuel industry.

— Nate Williams ’20

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