OSU Foundation Reconsiders Oil Investments

oilrigThe Oregon State University Foundation currently invests $36 million in the corporations most egregiously culpable for anthropogenic climate change. $36 million worth of support to the villainous fossil fuel industry is, as OSUDivest puts it, decidedly inconsistent with “the university’s core values of social responsibility and a healthy planet, as reflected in its mission, vision and goal statements.”

Working to address and rectify that inconsistency is the group of faculty, students, and staff known as OSUDivest. Their mission is to “convince, urge, or force the OSU Foundation to divest its holdings in fossil fuel companies and replace these with investments in socially responsible stock holdings.” OSUDivest came together in the spring of 2013. By fall of 2013 the OSUDivest faculty group had presented a divestment resolution to the OSU Faculty Senate. The resolution came to a vote and was passed at the full senate’s December meeting.

Things have been bumpier thereafter. While the ASOSU Senate favored the same resolution, the ASOSU House rejected it, citing both lack of information about how the Foundation will be affected, and concerns about hypothetical investment losses being passed onto students as higher costs.

Perhaps most disheartening to the movement has been the official position of neutrality adopted by the OSU administration. President Ray, who could use his “bully pulpit” to raise public consciousness about the climate crisis and the need for fundamental structural changes in our energy use, has only indicated that the OSU Foundation manages its own portfolio. Indeed, the Foundation is a non-profit organization independent from Oregon State University, accountable not to the OSU President but to its Board of Trustees. Still, there have been honorable instances of university presidents speaking out against the great issues of the day, as when Father Hesburgh, the president of Notre Dame, spoke out against the Vietnam War. Given the absolute critical nature of climate change, the scant time we have to truly address it, and the weight the president’s position carries, Ray’s silence is a disappointment, to say the least.

As for the OSU Foundation, its primary investment objective is “to maximize returns, which in turn support student scholarships, faculty research and campus operations.” Because of its focus on profit, it did not participate in the large divestment campaigns against apartheid in the 1980s. It has not yet publicly considered divesting its portfolio of fossil fuel investments, even though such investments represent only six percent of its total endowment. And yet, for the first time in its 60-some years of existence, and surely as a response to OSUDivest, the Foundation has set up a system whereby stakeholders can provide input into Foundation practices.

“Even though we are independent from the university, we share its commitment to the exchange of ideas and thoughtful discussion,” said Mike Goodwin, president and CEO of the OSU Foundation. “If the community we support wants to raise corporate responsibility concerns about our investments, we will make sure there is a transparent and equitable process for them to do that.”

According to Ken Winograd, one of the faculty leaders of OSUDivest, the group is currently scheduling an initial meeting with representatives from the Foundation. One of their strongest arguments for divestment is a moral one: it is wrong for energy corporations to destroy the planet and it is wrong to profit from this destruction. “Divestment out of fossil fuel will take creativity and work,” Winograd said, “but it can be done and will be done if the Foundation deems this action to be in its best interests.”

But therein lies the rub. According to the Foundation, OSUDivest will need to show “how any investment shift will advance the foundation’s fiduciary responsibility to produce above-average, long-term total returns for the endowment while maintaining a prudent level of risk.” Winograd remains unfazed: “We believe the Foundation could find a way to divest out of fossil without undermining the valuation of the portfolio.”

After all, the president of the World Bank declared support for fossil fuel divestment last month. The nation of Norway recently announced the organization of a committee to examine its divestment of its large social services fund, about $800 billion. The divestment movement has spread like wildfire: in October, Oxford University published a study saying that divestment was the fastest-growing corporate campaign in history. In the United States, divestment has already spread to over 400 universities, cities, and religious institutions, including the cities of New York ($147 billion pension fund), Seattle ($1.9 billion pension fund), and San Francisco.

And so even if the OSU Foundation does not in the end feel morally obligated to divest from its tainted shareholdings, OSUDivest will have succeeded. The financial side of the divestment movement is simply the most obvious and pragmatic piece of the puzzle. An equally important piece is in disrupting the public silence about the climate crisis, in creating, in OSUDivest’s words, “a synergistic shift in public opinion that, in turn, may create a more supportive context for significant climate legislation.” In other words, like the Abolitionist Movement, the Civil Rights Movement, and the Anti-Apartheid Movement, the divestment movement is striving to bend the arc of history towards justice. It only remains to be seen whether the OSU Foundation and, by proxy, OSU itself, will lend a hand to help.

by Jared Wallace

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