College students across the country have been urging their schools to withdraw investments from fossil fuel companies. While those school administrations have avoided the issue, Goshen College takes ethical investing to heart.
According to a recent New York Times article, Pennsylvania students have spent several months trying to persuade the Swarthmore College administration to stop investing in fossil fuel companies. Despite their efforts Swarthmore students have been denied, a trend seen nationwide.
“If it’s wrong to wreck the climate, then it’s wrong to profit from the wreckage,” Bill McKibben wrote in the New York Times. McKibben is an author and environmentalist who spoke on climate change at Sauder Hall in 2009.
“These kinds of things take time, but changes do happen,” said Jim Histand, vice president for finance at GC and chair of the school's Ecological Stewardship Committee.Goshen College, like many other universities, invests a large portion of its endowment fund on the stock market. Contrary to most schools, however, Goshen combines its endowment with other Mennonite schools into one fund managed by the Endowment Management Committee.
Histand also serves on that committee, which decides how the endowment funds are invested. While the Committee chooses the most beneficial investments, they also determine the ethicality of specific investments.
The endowments of almost all Mennonite colleges and high schools are pooled together. That fund is distributed to 18 money managers, who invest their portions of the endowment in various stocks across the market.
The money managers are "large, actively managed institutional funds,” said Lisa Heinz, chief financial officer for the Mennonite Education Agency. “These managers are buying and selling all the time, so a security that we own today may be sold tomorrow.”
Analyzing investments from an ethical standpoint is tedious work, but the Endowment Management Committee has a solution.
“We give [money managers] guidelines as to what we call ‘Socially Responsible Investing Principles,’” said Histand. He says these principles determine who the Committee invests with.
Even though investing in fossil fuel companies is a new issue nationally, socially responsible investing is not a new concept for Goshen College. “We’ve been doing this kind of thing for 40 to 60 years--ever since the college had money to invest,” Histand said.
Mark Regier is the financial director of stewardship investing for Everence, a Mennonite-based financial company. Regier consults the Endowment Management Committee, providing information about money managers that receive portions of the Endowment.
“Everence’s responsibility,” Regier said, "is to help our client institutions provide for their financial futures in ways that are as much in keeping with their values as possible." The committee has carefully evaluated their investments according to the socially responsible investing principles enforced by Everence.
Everence helps to prevent investments related to gambling and firearms production, and issues of human rights and the environment are closely watched. While climate change has been debated for decades, the issue of investing in these companies was only recently brought up to the Committee by Histand.
“I alerted them that [climate change] is getting much more attention,” Histand said, “and that we need to be looking into whether it makes sense to us to think about developing an investment criteria around that.”
The process of divesting from fossil fuel isn’t done overnight, said Histand. The committee wants to understand the impact of removing those investments on the portfolio, the company and society at large before making a decision.
“We’re ahead of the game,” said Histand, “because it’s set up as part of our formal structure that we want [responsible investing] to happen, and we actually engage in an agency that does it on a full time basis.”