The University of Maine student newspaper since 1875
Sunday, April 19, 11:08 p.m.

Letter to the Editor: UMS contradicts itself with fossil fuel endowments

Climate change is increasing the temperature of the planet, raising the level of the seas and engendering a phenomenon known as environmental refugees. These changes are happening now and they are happening all over the planet. Climate change is increasing instances of the following health concerns: respiratory disease, cardiovascular disease, water security, food security and nutrition, cancer, infectious diseases and mental health. World leaders agree on one detail with regard to climate change: 2 degrees Celsius — 35.6 degrees Fahrenheit — is the maximum increase it can sustain.

At the end of 2012, the average temperature of the planet had risen 0.8 degrees Celsius. Scientists estimate that the atmosphere can handle approximately 565 more gigatons of carbon dioxide before it is no longer capable of staying below the 2-degree threshold. Currently, the fossil fuel industry — coal, oil and natural gas — is planning on digging-up, selling, trading and burning 2,795 gigatons of carbon. The fact that the University of Maine System has a portion of its endowment invested in fossil fuels — at least $7.5 million — is immoral, given these serious conditions, and contradicts its mission. It is imperative that the UMS divest its holdings 100 percent from this industry.

Here’s how it works. The UMS endowment — some $121 million — is like a savings account, originally made up of principal in the form of gifts from alumni, foundations, corporations, philanthropists and the government. The money is invested in financial markets and earns returns as well as interest on the principal. In theory, the endowment is managed for the benefit of the institution — students, faculty and staff.

Furthermore, since the University of Maine is a non-profit academic institution with tax-exempt status, it should maintain total transparency and full disclosure. A recently filed Freedom Of Access Request revealed that, as of June 30, 2012, the UMS’ portfolio holds investments in over 40 companies that appear on the list of the 200 firms holding the majority of the world’s proven coal, oil and gas reserves, including BP, Exxon Mobil Corp., Peabody Energy Corp., Chevron Corp., ConocoPhillips and Hess Corp. The UMS investment strategy also includes various mutual and commingled funds, which by nature obscure the investment details. For example, $8 million is held by Dimensional Fund Advisors — a portfolio worth $2.8 billion with 0.89 percent exposure to fossil fuels, equaling approx. $25 million.

Why it matters: The System’s 2012 annual report states that $5 million of the endowment was distributed via scholarships and operating activities [Editor’s note, The Maine Campus was unable to confirm this by publication]. When asked for an accounting of those disbursements, the chancellor’s office stated, “This is not information that we produce.”

This savings account, which is operated for the benefit of students, faculty and staff, is currently invested, both directly and mutually, in the fossil fuel industry — an industry whose business model is dependent on the severe disruption of life as we know it. Not only is the endowment invested without the consultation of its supposed beneficiaries.

As members of the UMaine community we are held in the dark as to the allocation of the supposed profits this environmentally and socially disastrous investment strategy produces.

What can you do? Speak up and petition your university’s president to put pressure on the UMS Board of Trustees Finance Committee to divest your institutions holdings from all funds containing fossil fuels. As of today, the BOT Finance Committee has not researched its options for Socially Responsible Investment and is relying on an antiquated strategy that directly supports an unconscionable industry. As members of the UMaine community, we need to hold UMS to the climate rhetoric espoused in the Blue Sky strategic plan, the University’s Sustainability Solutions Initiative, and the American College and University Presidents Climate Commitment Network. Each of these entities name climate change as a major concern and reaffirm the UMS commitment to sustainability and renewability.

Students, faculty, staff and alumni, educate yourselves as to the workings of your particular institution and the UMS at large. Demand transparency and equal participation regarding investments that directly jeopardize your present and future. This is especially pertinent for students, as you are the ones the UMS purports to be educating, to become engaged, socially responsible citizens. Armed with this information, we should all be demanding responsible stewardship from the BOT: divestment from the fossil fuel industry.