To the Carleton Community:
We write to share the news that the Carleton Board of Trustees voted today to take meaningful action to reduce exposure to fossil fuel investments in the College’s endowment.
Carleton has grappled for some time with the difficult question of whether to join the many peer colleges and universities that have expressed their commitment to sustainability through divestment from fossil fuels. The Board of Trustees has recognized the tension between two competing values: the desire to strengthen Carleton’s endowment so that it can continue to support the mission of the college, and the belief that the college should not derive profit from fossil fuel companies whose primary business contributes to the climate change that threatens our students’ futures.
In considering this issue, the Board of Trustees has appreciated the input it has received from students, including through the Divest Carleton Proposal of February 2022, the Carleton Student Association resolution of May 2020, and numerous editorials in The Carletonian; faculty, including through the “Sense of the Faculty” Resolution on Fossil Fuel Divestment of January 2023; the Carleton Responsible Investment Committee (CRIC) in its April 2022 letter; and alumni, including Alumni Divest Carleton in their April 2022 letter to the administration and Board. The increasing urgency of the climate crisis has given added weight to the arguments that have been made over the years about the importance of divestment for Carleton.
The Carleton College Board of Trustees has therefore resolved to take the following actions with regard to fossil fuel investments in the College’s endowment.
Building on our commitment in early 2020 of incorporating Environmental, Social and Governance (ESG) factors into the investment selection assessment process, and to accelerate the shift in balance between traditional and renewable sources of energy, Carleton will eliminate all direct holdings of fossil fuel companies and will not make new investments in private funds that focus exclusively on oil and gas extraction.
The endowment’s allocation to oil and gas investments has steadily declined over the past three years and stands at approximately 5% of the endowment today. We plan for and expect exposure to decrease as we will immediately sell and no longer purchase directly-owned publicly traded fossil fuel companies. Further, we will gradually eliminate private funds that focus exclusively on oil and gas extraction in a prudent manner that is consistent with an overarching emphasis on fiduciary responsibility. Given the illiquid profile of funds of this nature, we anticipate the remaining investments will decline over the next four to five years and will be fully liquidated by 2030. Finally, we will continue to favor investment managers who support the energy transition and companies that actively manage and minimize carbon emissions.
We will continue to report the portfolio’s fossil fuel exposure through the Investment Office’s fiscal year-end endowment review letters, which are publicly available on the Carleton website, and will review those results annually with CRIC (Carleton Responsible Investment Committee).
As a leader in environmental sustainability, Carleton has taken many significant steps over the years to incorporate ideals of sustainability into our campus operations and to support sustainable practices in the daily life of community members. Most recently, our pioneering geothermal wells project allowed us to transition the entire campus from steam heat to geothermal energy in 2021, resulting in a reduction of energy consumption by 46% compared to average use for the five years preceding implementation of our new energy plan. We are exceeding the targets set by our 2011 Climate Action Plan, and have charged a Sustainability Working Group with creating a new climate action plan that will accelerate our progress toward carbon neutrality. Our academic program in Environmental Studies is helping to educate the next generation of environmental scholars and professionals in the core scientific, humanistic, and social science perspectives that inform and seek to resolve environmental challenges around the world. These actions reflect Carleton’s longstanding commitment to being a model of responsible stewardship for the environment.
The climate crisis is the greatest challenge of our time, and will have an enormous impact on our students’ futures. While the consequences of a single endowment’s investment decisions may be limited, we join a growing community of colleges and organizations that can have collective impact and greater influence by acting together. Carleton’s action is part of the culture change that we know will be needed to successfully combat climate change.
We look forward to continuing to work with the entire Carleton community to promote sustainability in both education and practice, and appreciate your support of the College’s efforts to ensure that our students are prepared to approach the challenges of the future with knowledge, purpose, resilience, and hope.