SRIAC’s Statement and REInvestment’s Response

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The REInvestment Campaign is disappointed to have received this response from the Socially Responsible Investment Advisory Committee today. The answer from SRIAC was a resounding NO, and REInvestment is seeing the lack of progress that they have made in the past four years. SRIAC is only now considering environmental degradation in their discussions, and have finally acknowledged that climate change is happening and is, in fact, impacting communities across the globe.

This new proposal is a giant step backwards in what have seemingly been significant negotiations over the past four years.  REInvestment alum Jocelyn Sawyer ’15 summarizes their statements, saying, “They [SRIAC] are saying they acknowledge the harm [caused by extreme extraction] and are choosing to do nothing.”

The REInvestment Campaign is undeterred and is looking forward to continue escalation through actions on campus, as well as expanding our conversations with SRIAC to address their concerns more specifically.

To: Responsible Energy Investment Campaign students and alumni

From: Socially Responsible Investment Advisory Committee

Date: November 6, 2015

Re: Proposal for Fossil Fuel Divestment, September, 2014

Dear friends, For the past year, Earlham’s Socially Responsible Investment Advisory Committee (SRIAC) has been engaged in a process of discernment regarding your Proposal for Fossil Fuel Divestment, September, 2014 (the Proposal). Our discernment is guided by Earlham’s Socially Responsible Endowment Investment Policy (the Policy). While we do not reach unity in supporting the recommendations given in the Proposal, we find it necessary and appropriate to give a response at this time.

SRIAC and its members share concerns about climate change. We are persuaded that climate change is occurring, that the change is likely caused by increases in atmospheric carbon, and that these increases are related to combustion of fossil fuels. We recognize that the impact of climate change likely includes rising sea levels, changes to biological diversity, and changes to marine and land ecosystems. These changes will likely impact some people more than others and may result in population migration to avoid rising sea levels, expanding deserts, declining ecosystems and other effects of climate change. While we share concerns about the combustion of fossil fuels, we do not reach the conclusion that the divestment called for under the Proposal is warranted under the Policy.

SRIAC is concerned about the impact of coal extraction and combustion on the natural environment. We recognize that some extraction techniques (e.g., mountaintop removal) are more environmentally destructive than others. We also recognize that some uses for coal (e.g., metallurgical) are more sustainable than others (e.g., electricity production), and that some companies have better records of regulatory compliance than others. We further recognize that using coal to produce electricity produces twice as much atmospheric carbon per unit of energy produced than using natural gas. We are not persuaded that all coal mining has a substantially adverse impact on human dignity relative to other industrial activities. We note that low prices for natural gas and oil driven largely by fracking have caused a decline in domestic coal production and market valuations for coal companies. We do not reach the conclusion that coal mining, by any means, for any purpose, in any quantity, by all companies, warrants a recommendation for divestment under the Policy.

SRIAC is concerned about the environmental impact of fracking. We recognize that fracking in some regions is more environmentally risky than in others, and that some companies have better records of regulatory compliance than others. We also recognize that process water and water produced from fracking present their own environmental concerns. We consider positively the fact that energy production via natural gas is half as bad as coal with respect to the amount of atmospheric carbon per unit of energy produced. We are not persuaded that fracking has a substantially adverse impact on human dignity relative to other industrial activities. We do not reach the conclusion that high-volume horizontal hydraulic fracturing, in any quantity, by any company, warrants a recommendation for divestment under the Policy.

SRIAC is concerned about oil extraction from tar sands. We recognize that the energy cost and environmental risk of extracting oil from tar sands is very high and results in substantially more atmospheric carbon than many other fossil fuel extraction methods. We are encouraged that the Canadian courts have addressed the rights of indigenous persons related to Canadian tar sand oil extraction. We recognize that some uses for petroleum products (e.g., recyclable plastics) are more sustainable than others (e.g., electricity production), and that some companies have better records of regulatory compliance than others. We note that low prices for natural gas and oil driven largely by fracking have caused a decline in tar sand oil production, and that tar sand oil production is a very small percentage of income for any of the companies in our portfolio. We do not reach the conclusion that tar sand oil production, for any purpose, in any quantity, by all companies, warrants a recommendation for divestment under the Policy.

Populations and communities around the world currently depend on extracted hydrocarbons for energy and raw materials, and we do not judge that all use is irresponsible use. Accordingly, we find it hard to conclude that all extraction is irresponsible extraction.

Companies vary in their approaches to extraction and management practices, and we do not judge that all companies operate in ways that denigrate the dignity of individuals. The mere fact of being engaged in an extractive industry does not require that the company denigrate the dignity of individuals. Accordingly, we find it hard to conclude that all companies engaged in these forms of extraction denigrate the dignity of individuals.

The Proposal makes an argument of “zero tolerance” for companies engaged in these extraction practices. Our Policy establishes specific thresholds for alcohol, tobacco, gambling, and armaments, so we judge it to be inappropriate to apply a different standard of zero tolerance to these extraction companies.

To further clarify, the Policy provides specific guidance on how the Committee is to address investments in specific companies. The Committee finds it problematic to respond to the industry-wide aspects of the Proposal in the context of the Policy.

However, the Policy is up for review this academic year. One of the changes we are considering is whether the Policy should provide a specific threshold for irresponsible use of the natural environment.

We have been impressed by the professionalism and patience of REInvestment throughout our lengthy dialogue and deliberations. Thank you for your engagement and your concern for the many communities of which we are part, particularly our Earlham community.

Ray Ontko, for the Socially Responsible Investment Advisory Committee

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