University of Cincinnati chief investment officer Karl Sheer said divestment from fossil fuels would lead to “not allowing students the freedom to make their own decisions” during Student Government’s meeting on Wednesday.
“Nobody knows whether divesting would improve our returns, although it would most likely be fairly expensive to divest,” Sheer said.
UC’s endowment — $1.2 billion dollars created by over 2,000 individual donors — is mostly tasked to specific missions, such as sustaining a scholarship fund.
A significant portion of UC’s endowment is in fund A, meaning the money can be co-mingled which offers better investment management opportunities and resources.
“I think that any company in fossil fuel/energy world would view us negatively for divesting…(University of Dayton) not being partnered with by one company is an example,” said Scheer in reference to how Marathon stopped hiring UD graduates after the university divested from fossil fuels.
Divestment is a hot-button issue on college campuses, with a new study by the National Association of Scholars showing the fossil fuel divestment movement is currently active on more than 1,000 campuses in the United States.
Major universities that divested include the University of California, Stanford University and the University of Glasgow in Scotland.
UC’s fossil free movement, according to the petition’s official website, said, “The scientific consensus is clear and overwhelming; we cannot safely burn even half of global fossil-fuel reserves without dangerously warming the planet for several thousand years. As public pressure to confront climate change builds, we call on University of Cincinnati - Main Campus to immediately freeze any new investment in fossil-fuel companies, and to divest within five years from direct ownership and from any commingled funds that include fossil-fuel public equities and corporate bonds.”
Bill McKibben, a former journalist turned leader of the divestment movement said that while school may not have financial power against the corporations, they could have other ways of hurting them.
“No one is under the illusion that any college sells its shares in Exxon, that will immediately bankrupt Exxon,” McKibben said. “What it will do is begin the process, further the process, of politically bankrupting them.”
However, this could lead to a loss of job opportunities and co-ops and a loss in scholarship money, according to Scheer.
“Starting with hard dollar cost, divestment may cost a value of 80 scholarships on the low end. If we vote no because of threat on co-op, other companies may view this as undue influence,” said Scheer.
Bradford Cornell, a professor at the California Institue of Technology, authored a paper on the economic case against divestment in September and concluded that, on top of having a real cost to the endowments, divestment offers no benefit.
Scheer, a Harvard graduate, said that while oil is most certainly a precious resource, it will not run out in any meaningful amount of time for anyone in the room.
Another event covered during Wednesday’s agenda was the announcement of a memorial to be placed on campus for the slain Samuel DuBose, according to Student Government President Andrew Naab.
The university recently reached a settlement with the Dubose family on Monday for approximately $5.3 million, including free tuition for his 12 kids.
Additionally, Student Government voted to allow freshmen to vote in committees.