EAC’s Letter to the Trustees

President Obama said in his Earth Day proclamation that "nothing is more powerful than millions of voices calling for change" and in hopes that you will join our movement, we’d like to share a letter we wrote to the Board of Trustees this past February on the possibility of divesting our school’s endowment from the fossil fuel industry. Though we have yet to receive a response we are looking forward to meeting with them in a couple of weeks.Dear Board of Trustees,While superstorms destroy and sea levels rise, environmentalist Bill McKibben’s campaign for divestment from the fossil fuel industry has been mushrooming in schools across the country. Unity, Sterling and Hampshire Colleges have completely dispensed fossil fuel stocks from their portfolios, while others such as Middlebury, Swarthmore and twenty other universities have begun formal processes considering divestment within five years. 72 percent of the Harvard student body voted to demand divestment, and as Time magazine put it, "Just like their forerunners in the apartheid battles of the 1980s, these climate activists won’t stop until they win." Active on more than 250 campuses nationwide, the movement has already spread from the academic into the "real" world. Secretary of State John Kerry recently announced his plans to divest his holdings in the fossil fuel industry while mayors of New York City, Seattle and Los Angeles have begun divestment. Fortune 400 hedge fund "kings" like Tom Steyer of Farallon Capital Management, have endorsed Bill McKibben’s nationwide campaign and publicized their decision to divest from fossil fuel companies. Interestingly enough, Steyer is a graduate of PEA: president of the class of 1975.This brings us to our own campus. You may already be aware that a handful of Exonians have recently started a campaign for divestment, making it one of the first two secondary schools in this country to pursue climate justice in a fundamental level.With over 300 signatures on a "Go Fossil Free!" petition and discussion sparked among both students and faculty, we are looking forward to your joining a thoughtful community-wide deliberation, as in true Harkness spirit, on this complex topic.On February 15, four members of Andover’s Board of Trustees wrote to The Phillipian having formed a separate committee "to examine the question of divestment from fossil fuels in regards to Andover’s Ethics and Investing policy."While our own Academy did not develop such a framework for investment in its most recent cases of divestment (from the Sudanese government in the wake of genocide in Darfur, and the apartheid in South Africa), we see this as an opportunity for Exeter to fulfill its mission of goodness as inseparable from knowledge and Environmental Mission Statement.Our past two meetings with Mr. Wejchert have taught us that divestment is no easy decision. We have allowed the fossil fuel industry to become as prosperous as it is today, and Exeter’s endowment is the largest source of revenue for the school. It makes financial aid possible, and indeed the favorable ratio of minimum tuition and maximum salary.Yet more and more academic studies are citing evidence of a miniscule theoretical return penalty of divestment. Bill McKibben recently quoted Tom Steyer before the Middlebury College administration’s divestment panel, saying that divestment is not only a doable but also a beneficial investment strategy. Thus, we would like to delve further into the issue. There are arguments for each side with regards to divesting from the fossil fuel industry, and we must examine them closely in order to construct as meaningful a solution as possible to the increasing danger of climate change.We would also like to know of other methods to engage constructively as shareholders with the companies in question. Mr. Wejchert mentioned continuing to invest exclusively in energy companies that are going "green;" that is, that provide more value to society than costs. However, he then informed us of the difficulty of transparency from hedge fund managers, particularly in finding out the specific percentage of investment and the identities of the companies. If transparency is an obstacle, we would like that—prior to divestment— to be addressed."In our capacity as fiduciaries, we must assess the advisability, benefits and potential costs of [divestment]," concluded Andover’s four trustees in their letter to the school newspaper. They promised to "explore the issue and make a recommendation to the Board." Such a course of action would be of indispensable help to us as we seek to make Exeter a leader, not a culprit, in one of the most important crises of our generation and the generations to come.