President Clayton Spencer’s statement on climate change and divestment

Dear Members of the Bates Community,

I write to outline important aspects of our institutional response to the urgent problem of climate change and to address the question of whether the college should divest its endowment from the fossil fuel industry.

Climate change poses a momentous threat to the overall quality of life on Earth. Bates takes this threat seriously and has responded over the years in a variety of ways. The college has been a leader in environmentally sustainable practices and has committed significant resources that have reduced energy consumption and altered our ways of doing business. Along with other institutions, Bates has committed to reducing our carbon footprint with the ultimate goal of carbon neutrality.

Members of the Bates Energy Action Movement (BEAM), a student organization, have conducted a thoughtful campaign since the fall of 2012 urging the college to divest from the 200 companies that hold the largest fossil fuel reserves. We have considered this request seriously, met with student advocates to understand their arguments, studied the literature on the subject, and analyzed the impact of divestment on our endowment and institutional mission. I personally have met with students from BEAM a number of times, and, within the past year, other members of the college administration and the Board of Trustees have also discussed the pros and cons of divestment with the students. These meetings have included conversations with the Board’s Investment Committee and with the chair of the Socially Responsible Investing Subcommittee.

Based on these interactions over a period of time and a careful review of the full range of implications, the Board of Trustees has chosen not to alter its current framework for endowment investment to divest from the fossil fuel industry.

The Board of Trustees has a fiduciary responsibility to protect our ability from generation to generation to offer the high quality liberal arts education envisioned by our founders in 1855. The college’s endowment provides core support for this mission, and the Board is charged with protecting its purchasing power over time through sound investment policies. In addition, the Board has an explicit responsibility to honor the wishes of donors past and present whose gifts have built the endowment, trusting that it would be prudently managed to provide enduring resources to support the mission of the college.

Bates is committed to socially responsible investing as an important dimension of its investment strategy. So, too, is its external endowment manager, Hall Capital Partners, who recently completed the process of becoming a signatory of the United Nations Principles for Responsible Investing (UN PRI). The Board of Trustees and Hall Capital Partners continually monitor the college’s investment practices to ensure that they achieve the appropriate balance among a number of considerations, as outlined in the following policy statement:

“The Endowment’s strategic asset allocation is constructed to properly balance the need for liquidity, growth and/or preservation of purchasing power, and tolerance for risk. The primary criterion for the selection of the Endowment investment is to maximize return within defined risk parameters, which in turn, maximizes the financial support for the college. In addition, Bates is committed to balancing the financial objectives of the Endowment with the social and environmental priorities of the broader Bates community. The Investment Committee and Chief Investment Officer (CIO) will consider social, environmental and governance impacts when selecting Investment Managers across all asset classes. The Investment Committee and CIO welcome input from student or faculty groups in assessing the priorities of the Bates community with regard to socially responsible investments.”

For a variety of reasons, the Board of Trustees has concluded that it is not prudent to move beyond this strong framework of socially responsible investing to a divestment strategy targeting a specific industry.

An analysis performed by our vice president for finance and administration in the spring of 2013 estimated that a maximum of slightly over 3 percent of the Bates endowment is invested in the top 200 fossil-fuel companies targeted for divestment. Virtually all of this investment is owned by the college through commingled funds, including mutual funds and limited partnerships investing in public and private securities. Employing such funds is critical for diversification of investments and professional money management across asset classes. To guarantee divestment from these 200 public companies, our investment advisers estimate that between a third and a half of the entire endowment would need to be liquidated and replaced with separately managed accounts.  Were we to guarantee a fossil fuel free endowment more broadly than the 200 companies, greater than half of the endowment would need to be liquidated. In either scenario, the transition would result in significant transaction costs, a long-term decrease in the endowment’s performance, an increase in the endowment’s risk profile, and thus a loss in annual operating income for the college. Such a reduction in resources would affect critical college priorities, including financial aid, faculty and staff salaries, and support for academic programs. In short, divestment would potentially threaten core aspects of the college’s mission. Furthermore, as Harvard President Drew Faust has powerfully argued, instrumentalizing an endowment for political ends distorts its function as a core resource for our academic mission, and potentially puts at risk our independence as an academic institution.

Putting our human and fiscal resources toward effective programs on our campus and within our community, on the other hand, allows us to address the problem of climate change directly and through our own actions. This includes scholarship and teaching related to climate change, as well as the systematic measures we take to reduce our carbon footprint.

Bates will continue to take a leadership position in environmental sustainability, building on and enhancing policies and practices aimed at reducing our reliance on fossil fuels. Currently, two full-time positions at the college are charged with leading strategic efforts in support of environmental sustainability: the Manager of Sustainability Initiatives and the Energy Manager. The Committee on Environmental Responsibility, composed of faculty, staff, and students, is an active group that develops new opportunities for sustainability initiatives, and the Energy Task Force, created in 2009, designs and implements projects and policies to improve energy efficiency and conservation on campus. Prior to 2009, our energy budget grew at an annual rate of 5 percent. Over the past five years, the work of the Energy Task Force has enabled the college to reduce that growth each year, resulting in a 2014 budget that is 18 percent lower than the 2009 budget. All capital renovations and new construction have been designed to achieve a minimum equivalency of Leadership in Energy and Environmental Design (LEED) Silver, as will the new residential life facilities to be built on Campus Avenue. The Bates Dining Service in particular demonstrates national leadership in environmental practices, as one of only six U.S. colleges or universities to earn a three-star rating for sustainability from the Green Restaurant Association. That rating includes recognition of Bates’ purchase of renewable energy credits, its broad adoption of Energy Star appliances, its use of occupancy sensors, and many other measures that help reduce the college’s energy demand and climate-altering impact.

The actions outlined above represent a serious institutional and financial commitment to environmental sustainability, and I will continue to collaborate with the Board of Trustees and the entire Bates community to strengthen our efforts and maximize their impact. As with all matters of urgent community interest, I welcome the engagement of our students and their constructive ideas for action.

With all best wishes,

Clayton Spencer

26 Responses to “President Clayton Spencer’s statement on climate change and divestment”

  1. Joan Houston says:

    I believe the college should protect its current endowment investments and agree with the decision made to keep “as is.”
    People always have the free choice to exclude fossil fuel investments from their own personal portfolios.

    • Collin Rees says:

      Of course people have the choice to exclude fossil fuel investments from their own personal portfolios. Most divestment advocates already have, and I don’t see how that’s a relevant or salient point in regard to Bates’ endowment. What’s relevant is that advocates cannot conscionably donate to Bates, knowing their money would further the aims of companies bent on wrecking the climate.

      Bates’ flawed analysis that divestment would hurt its endowment’s performance ignores the fact that fossil fuel companies are fundamentally bad investments over the long term, and its fiduciary responsibility to its stakeholders includes tracking and managing the severe threats posed by risks such as the carbon bubble. By blindly ignoring this risk, President Spencer is doing her constituency a great disservice.

  2. Sarah Stanley says:

    I support that Bates commits to reducing its carbon footprint with the ultimate goal of carbon neutrality. However, it is paramount that the college protect its current endowment investments.

  3. Ellen Southworth says:

    Although it is true there are risks involved in divestment, I must disagree with this article. President Spencer states that the endowment is not meant to be a political pawn; however, the situation is inherently political. Choosing to invest and endorse the fossil fuel companies is an equally strong statement as is divesting. Further, I’m curious to see the sources that were used to support the idea that divestment is guaranteed to lose money?

  4. Scott Keenen says:

    I agree with and support President Spencer’s thoughtful position and decision.

  5. Weston Bonney says:

    Bates continues to be a leader in addressing environmental sustainability issues. The current policy seems completely appropriate. Congratulations to Bates for the significant study of the inclusion of fossil fuels companies in its endowment including a careful consideration of the views of its many constituencies. The policy adopted seems appropriate.

    Weston Bonney, Bates 50
    Trustee Emeritus

  6. Richard Morton says:

    This decision by the Bates College Trustees was a difficult one in an enviroment with such diversity of social and policital viewpoints as Bates has. However, the end result of the review and analysis correctly balanced costs versus benefits. I commend the trustess for a wise choice in responding to the concerns expressed.

  7. James Hunt says:

    I am thankful that the Trustees are more rational than the students and administration who appear to buy in to the hoax of anthropogenic climate change.

    • Jesse Bengson says:


    • Lorrie Gloede says:

      I agree. There has always been climate change, apparently influenced more by solar activity than anything else. It sounds as though U.N. Agenda 21 is alive and well at Bates.

    • Warren M. Ketcham, Jr. '64 says:

      I also applaud the Trustees decision.

      I would also like to add the following thoughts:

      At the present time the scientific evidence neither affirms nor denies anthropogenic climate change. It is imperative that Bates makes rational decisions based on facts and not on any politically motivated movement. I will always be indebted to Bates College for helping me think for myself and gather all pertinent information about a subject before making a decision. I urge Bates to continue to direct students to make good decisions based on a scientific approach and not on any preconceived agenda.

      • Jesse Bengson says:

        Well said Warren. We need more of the type of rational and logical insight that you have provided. It seems a new “belief” system is expanding while logic and rationalism are being marginalized amongst contemporary academics. There is no “science” of anthropogenic global warming. There is however, a science of propaganda, which is being implemented in full-force.

        • Bo Ra Kim says:

          As President Barack Obama said tonight during his State of the Union speech, “Climate change is a fact.”

      • David Burns says:


        The science on anthropogenic climate change is, in fact, extremely clear. Suggesting that it is otherwise is to make a patently false statement.

        The Intergovernmental Panel on Climate Change is 95 percent[!]* confident that humans have caused most of the observed global surface warming over the past 60 years. They found that during this time, natural external factors (e.g. solar activity) have had no net influence on global temperatures. Thus “most” is estimated to be 100%.

        *95% is often the gold standard for certainty in science

        Over the past year in the peer-reviewed scientific literature, only one [!] paper out of 2,259 rejected anthropogenic climate change. Over the past 21 years, only two-tenths of a percent of the academic articles expressed such dissent.

        As you suggest in your post, I respectfully hope that this pertinent information will inform your views on the state of climate change science.

        To anyone in need of more information, I’d be happy to help point you to credible scientific assessments.

  8. George. W. Marchant' 60 says:

    I agree with Joan’s comment ie No 1 above. GWM

  9. Uta Barr says:

    It is good to know that Bates College has involved an investment manager that looks at the return on capital as well as ethical implications. I believe that Americans, in general, are putting pressure on the fossil fuel companies to diversify their efforts whether creating more green solutions for oil exploration or initiating their own investment in green solutions like solar and wind. This unfortunately takes time. Also in the end, the Bates College Community must understand that many geology majors are working in this arena. The fossil fuel companies are an important source of employment for many graduates. Hopefully, by being students at Bates College, they will bring forth with them a heightened understanding of more environmentally friendly practices.

  10. Ed Swain, '52 says:

    If students are so concerned about fossil fuel and climate change, turn down all campus thermostats to 60 degrees so that they can feel that they are making a real contribution. Stopping investments in fossil fuel companies would have no significant effect.

  11. Joshua Dietch 90 says:

    I’m certain the debate as to whether to divest or not divest was enlightening for all involved. However, the telling and overriding factor in all of this seems to be the relative size of the College’s endowment, the practically of liquidating/transitioning assets, and the alternatives available to do so.

    While investing in these securities may be unpalatable to some, I’m not sure the College vis a vis its endowment is in a position do otherwise. Further, as fiduciaries, the trustees have an obligation to manage the endowment in a prudent manner. Perhaps as the endowment grows, it’s scale will allow for greater customization of the securities it holds and the investment structures available to it.

    In light of the present factors, it seems as though the trustees have come to a reasonable conclusion.

  12. Nancy Ploener says:

    I agree with James Hunt comment No. 7. Global Warming lingo forced to revamp lingo to Climate Change = enough said. One point of interest for me is President Spencer’s reference to Bates Founders: “The Board of Trustees has a fiduciary responsibility to protect our ability from generation to generation to offer the high quality liberal arts education envisioned by our founders in 1855. ” Bates was founded as a Baptist Seminary during the abolition movement. One might argue that while it has maintained a high quality liberal arts education, it certainly has drifted away from the founders vision of a Christian world view.

  13. Christian Bardin says:

    Protect and grow the endowment first. I support the Trustees’ position.

  14. Bob Britt says:

    I am glad that the college did not use the same logic outlined in the Statement above in making its decision to boycott South African investments in the fight to halt apartheid. (At least, I hope the college supported that boycott as I really do not know.) Institutions need to step up the pressure they can wield to help wake up the world to convert away from fossil fuels. Every step the US, for example, takes toward clean energy (solar, wind, etc.) is being thwarted by the fossil fuel companies that export their coal and tar sands to China when they are blocked in the US using the capital from institutional investors to do so. Someday, some educational institution will step up and be a leader in this movement and, unfortunately, it appears that Bates is satisfied being a follower.

  15. Alec Wyeth says:

    On the whole I agree with the Trustees’ and President’s position. However, I wonder if some partial divestment and reallocation of funds could have been achieved without putting the College at risk while making a statement at the same time.

    Also, I can’t help but be shocked to see that there are people out there and above who still believe that mankind is not having a negative, harmful, and potentially lasting impact on our overall environment. Please be observant and read the science.

  16. Tom Stone '70 says:

    I have seen studies that indicate that fossil fuel divestment has, at most, a 0.5 % effect upon portfolio growth so I doubt that there will any impact at all from Bates taking this step. Of course EXXON won’t notice or care either. The real value comes from the message that this sends to students, alumni, staff and the the community at large. The message is that fossil fuel emissions CAN NOT proceed business as usual if we are to have a habitable planet for our children and grandchildren. The evidence is all around you if you are willing to look. It is not just warming, the climate and the oceans are all changing fundamentally. Extensive droughts, massive wildfires, expanding coastal flooding, loss of glaciers and ice caps mean that the 3 billion more people added to worlds population to the world by 2100 will have an even more difficult time to survive. The developed nations will likely be flooded with millions of environmental refugees.
    The message of divestment shows that we care about the future of ourselves and of humanity more than a trivial short term profit. We should be investing in the 1000s of smarter companies that are more sustainable and in the end will be more profitable. Let Bates show some leadership.

  17. Rob Thomas says:

    “The head of one of the world’s most powerful financial institutions says governments and business should consider withdrawing funding from oil, gas and coal companies.

    “Through policy reforms, we can divest and tax that which we don’t want, the carbon that threatens development gains over the last 20 years,” World Bank President Jim Yong Kim said in an address at the World Economic Forum summit in Davos, Switzerland.

    Jim added financial regulators should set this agenda by forcing companies to reveal their exposure to climate-related impacts. He said: “The so-called “long-term investors” must recognize their fiduciary responsibility to future pension holders who will be affected by decisions made today. Corporate leaders should not wait to act until market signals are right and national investment policies are in place.”

    World Bank Group vice president and special envoy for climate change Rachel Kyte described his call as “prudent”. It is believed to be the first time he has publically backed moves to cut investments in industries responsible for releasing large quantities of climate warming gases into the atmosphere.

    The remarks are significant and a sign the institution is “ratcheting up its position”, according to Craig Mackenzie, Head of Sustainability at Lloyds Banking Group…..”

    – See more at:

  18. Julia Plumb '05 says:

    I have never made a donation to Bates. I pledge to make a donation to Bates if the college divests from the fossil fuel industry.

  19. Ernest Beer 1962 says:

    If colleges don’t start divesting now then things continue as usuaL
    EXXON dirties up Alaska and native fishermen lose. BP takes care of the Gulf in the same way. Advertising informs us that fracking is good for the economy if not drinking water. Coal companies inform us that chopping of mountain tops is good and drinking water with slag contents is also good. The Newport, VA military installation is already worryiing folks that it may have to be moved because of flooding. The islands in the Indian Ocean may go under. Some of us may be dead, but our progeny and the students at Bates may have to live in a world such as that of Beijing, China where the mayor of the city announces his city is unlivable. What a patient people we are!!!