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Editorial: Investing in the truth

Foundation must provide answers in divestment situation

The New Hampshire

Published: Thursday, November 29, 2012

Updated: Wednesday, February 13, 2013 15:02

The University of New Hampshire has a reputation as a sustainable institute. Sierra magazine recently named it one of the top 10 most sustainable colleges in the entire nation. UNH’s buses run on alternative fuels and a 12-mile pipeline brings processed landfill gas to power much of the campus. A Sustainability Institute was established in 1997 in order to ensure that UNH meets its eco-friendly goals

But the university is not sustainable in all of its operations, as brought to light by the Student Environmental Action Coalition’s campaign, which is urging the university to divest from fossil fuel companies. 

SEAC has managed to gather more than 1,000 signatures over the course of the semester from students who support divestment. It has been an impressive movement, but one that still has a number of unanswered questions. Despite SEAC’s semester-long effort, there is still no information regarding the extent to which UNH’s endowment is invested in fossil fuel companies. 

An outside company, Prime Buccholz, handles UNH’s investments and the UNH Foundation released a statement saying that it would be difficult for them to target specific companies in which the university invests. Both the administration and foundation members have been either unwilling or unable to provide the numbers on which fossil fuel companies the university invests in and how much it is invested in those companies. 

In that regard, the foundation’s response has been unacceptable. Refusing to disclose how a public university invests its endowment to a group that has asked numerous times is disingenuous and evasive. More than 1,000 students have expressed concern with UNH’s investments. In response, the foundation has essentially said that it has little control over UNH’s investments in relation to the control that the outside fund managers hold. It also said “divestment in fossil fuels is not a practical or feasible option for the UNH Foundation.” Yet it does not elaborate or back up that point in any way. 

In the same regard, SEAC must understand that the university is not in the financial position to divest from fossil fuel companies if there aren’t options that will give the foundation similar returns. UNH’s minimal state budget appropriations have not put the school in a position to move around its investments without serious consideration. 

What the UNH Foundation needs to do is have an honest conversation with members of SEAC and the UNH community at large about its investments. Its representatives need to explain how much the university is invested in fossil fuel companies. And after doing extensive research of its own, and not relying on an outside investing company, the foundation should explain why it isn’t practical for the company to divest from fossil fuel companies. If it does not, it risks labeling UNH with the ironic tag of a sustainable university that helps to fund global warming. 

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Wed Dec 5 2012 10:35
To say that "refusing to disclose" the university's investments in "fossil fuels" is "disingenuous and evasive" shows a lack of understanding of how the university invests.
First, the university does not manage its investments directly. As the editorial states, these investments are managed by an professional investment management firm. The university gives broad strategic guidelines for the handling of these funds, but does not (on a regular basis) specifically choose individual organizations in which to invest.
Secondly, many of the investments held by the university will be similar to mutual funds - that is a portfolio of investments designed to reduce the university's exposure to financial risk. Each individual fund will have its own manager or management team, which makes the decisions about individual investments based upon the strategic guidelines set up at the time the portfolio/fund was created.

So being able to easily report the university's investment in "fossil fuels" is difficult because by the time these numbers are reported they would be obsolete. Additionally, it begs the question of what is meant by an "investment in fossil fuels". Do we mean only oil companies? How about car companies (that rely hugely upon fossil fuels)? How about other manufacturing organizations that supply the car companies? How about users of fossil fuels?

I'm not saying that the university should not be able to put strategic priorities in place for its investments that meet certain social responsibility/sustainability goals. The university can and should do this. However, to criticize the university for not knowing the details of its investment portfolio, especially in terms of such a nebulously defined category, misses the mark.

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