Solomon Medintz: We need a new divestment policy
On April 9, in response to demands from climate activists for the University of Michigan to divest from fossil fuels, University President Mark Schlissel gave his interpretation of the University’s divestment policy at a carbon neutrality public session: “Essentially, we don’t divest … If we begin the process of narrowing what the endowment can invest in, based on very valid arguments and concerns from sincere people, the ability to invest shrinks, the value of the endowment goes down and the institution suffers. We’re just not going to divest.”
Though I will not talk about the merits of divesting from fossil fuels specifically, the recent talking point from our president opens the door for a larger discussion about the University’s endowment divestment policy and the student body’s role in endowment investments. But first, it is important to consider why students care about divestment, since our commitment to divestment is so quickly brushed aside by the administration.
As students, we are drawn to divestment discussions because they offer an avenue where we can tangibly express our beliefs on issues over which we have little control. In a prestigious, high-minded academic institution, there is a disconnect between the issues we think about and the amount of control we have over them. In our classes, readings and conversations with peers, we are discussing the most pressing and salient global issues, yet we have little agency over them. The issues we do have influence over — campus and Ann Arbor policies — are not stressed in our academic settings, and consequently (amazing campus organizing aside) these policies do not receive the student attention they deserve.
When activists are spoken down to, we are told we should express ourselves by voting. We do that, but if the issues our votes have real influence over (municipal and statewide elections) are so important, why are we not learning about them in the classroom? We are told we are learning about global issues to become global leaders, but we do not feel we have the power to enact change on that scale. The University’s endowment, which totals approximately $12 billion, is among the only significant, tangible thing we can immediately and forcefully express our values and beliefs on issues that we have minimal influence over. And this —Schlissel has stated — is off limits.
We are also drawn to divestment because if we want to change the world, we have a responsibility to shape our institutions in accordance with our values. The right kind of changes are not going to come from top-down policy mandates, but from people taking ownership of our campus issues.
The University does not want to talk about divestment because it opens up uneasy and controversial political discussions that could alienate donors, faculty and potential students. Furthermore, the University wants its financial safety to be cushioned in case of an emergency so that it can continue to function at full capacity. These are both worthwhile concerns, but this mindset ignores the tangible harm our investments cause as well as how they reflect on our values as an institution. Like many students, I want the University to change its divestment policies, or at least clarify them.
In his response at the town hall carbon neutrality public session, Schlissel accurately depicted current University policy: The issue is that the policy is unclear. The University tries to shield its endowment from political issues, but it acknowledges that exceptions are sometimes necessary. If an issue is labeled an exception, the University’s Board of Regents creates an ad hoc committee to look closely at the issue in question and decide whether to recommend divestment. The only two issues granted divestment were South African apartheid in 1978 and the tobacco industry in 1999. In 2005, the University spelled out the three criteria that need to be met to achieve such a status: 1) “The concern to be explored must express the broadly and consistently held position of the campus community over time;” 2) “There must be reason to believe that the behavior or action in question may be antithetical to the core mission and values of the University;” 3) “There must be reason to believe that the organization, industry or entity to be singled out may be uniquely responsible for the problems identified.”
If the University is trying to construct a rational divestment policy, criteria one and three require revisions, or at least, clarifications.
The first criterion is flawed because there is no threshold for evaluating the campus position. The campus community will never reach a uniform opinion. Consequently, the University can pretend there is no campus-wide consensus if it does not want to discuss divestment, as there are no tangible points that determine whether the campus community supports divestment. The University should establish specific procedures and benchmarks for determining if particular divestment issues have broad and consistent campus support.
The third criterion needs changing because it requires that the companies being divested from are uniquely responsible for the issue being objected to. This criterion should be broadened to include those companies that bear responsibility in all levels, not just “unique responsibility” as the policy states.
Lastly, if the University wants to abide by these criteria for divestment, it should be proactive in evaluating whether its endowment is supporting companies the campus community objects to. The University should not have to wait to be pushed by campus activists — it should seek to reflect campus values in the endowment. One way to do that would be to publicize the endowment portfolios, allowing the community to offer input.
Perhaps these criteria are intentionally vague so the administration can make divestment decisions unilaterally. If that is the objective, they should not pretend that there is any logic to the decision of whether to discuss divestment and admit that it is just political positioning. If the criteria are just a facade for unilateral decision-making, the University should scrap the criteria entirely.
The University cannot have it both ways. If the policy is truly that the endowment will never be impacted by political issues, then it should eliminate the criteria for divestment procedure. It has not done this because there are obviously issues our endowment should not be financially supporting and because the way we spend our money reflects our values. If the University acknowledges that some divestment claims are valid, it should engage in these conversations honestly. Divestment conversations are always going to be messy, but the University should welcome students taking ownership over the institutions we care about.
Solomon Medintz can be reached at email@example.com.