The Green Bowdoin Alliance (GBA) is continuing its efforts to convince the College to divest the endowment from fossil fuels, despite President Mills’ and Senior Vice President for Investment Paula Volent’s assertion that divestment would cost Bowdoin millions of dollars. Both sides of the divestment issue are arguing their case based on different, largely incomparable statistics.

Matthew Goodrich ’15 and Bridget McCoy ’15, who are leading GBA’s push to divest, say they are unwilling to accept the numbers presented by the administration without full disclosure of how they were calculated.  Mills and Volent told the Orient last week that 1.4 percent of the endowment is invested in fossil fuels, primarily through exposure to an enhanced S&P 500 index fund. Based on data from the past decade of endowment performance, they estimated that if the College were to divest, annualized returns would decline by more than 5 percent.

“Over a ten-year period we would lose over $100 million,” Volent told the Orient last week.

“Barry Mills submitted these numbers and published them without releasing the report from which the numbers came,” McCoy said. “He is asking us to take these numbers at face value…if there’s anything I’ve learned at this college it’s that if someone gives you numbers you have to ask them where they came from.”

Goodrich echoed McCoy, when he said, “it’s hard to trust them when they’re not forthcoming with how they got those numbers.” Both argue that only when the administration is completely transparent about the implications of divestment can they have a meaningful conversation on the subject rather than one centered on speculation alone.

Mills and Volent had no further comment on the issue.

GBA is drawing support for divestment from a recent study conducted by the Aperio group, an investment firm specializing in customized indexing. Aperio’s findings suggest that there would be statistically negligible risk involved in divesting from fossil fuels.

Liz Michaels, chief of staff at the Aperio Group, has spoken with students in GBA about the report’s applicability to Bowdoin. Michaels told the Orient that the Aperio Group does not have an official position on divestment, and explained how the report’s findings were calculated.  

“We don’t have a horse in this race,” Michaels said. “This is about providing information to have an informed discussion. We’re taking a position that transparency in the process is important, and having an informed dialogue is really important.”

Aperio arrived at the conclusion that divestment would not significantly hurt endowment returns by running a program to optimize the Russell 3000, an index measuring the top 3000 US companies, after eliminating hydrocarbon-producing companies from the index.

However, because specific details about Bowdoin’s endowment are not available, Michaels said that it is not possible to infer whether the Aperio Group’s findings would hold true for the College.

Assistant Professor of Economics Erik Nelson noted that both the administration’s and the Aperio Group’s calculations on endowment performance were made by looking at past market performance.

“My suspicion would be that socially responsible funds probably do not perform as well as mixed funds in general,” Nelson said. “Over any given time period in hindsight you can find socially responsible companies that preformed better than your investments.”

Nelson explained that any retrospective study could easily find investments that would have out-performed actual investments.

According to Goodrich, Mills did not respond to the data presented by the Aperio Group.

“He said that they don’t know what they’re talking about,” said Goodrich.

Students at Middlebury, where environmental activist Bill McKibben is a scholar in residence, are also campaigning for divestment. According to MIT professor Mark Kritzman, divestment would cost Middlebury $17 million over a five-year period. Nevertheless, McKibben contends that divestment would have either a negligible or even a positive impact on the endowment.

During a panel discussion on divestment at Middlebury on January 22, renewables-focused venture investor Ralphe Earle argued against divestment, saying that he did not believe it was the most effective way to reduce climate change. Earle suggested that students focus on making green decisions on a smaller scale, and that Middlebury should aim to influence energy companies in other ways. McKibben, however, rejected Earle’s suggestions.

On Saturday, February 9, GBA had planned to host a panel discussion with McKibben, Unity College President Stephen Mulkey, Director of Sierra Club Maine Glen Brand, representatives from the Sustainable Endowment Institute, the Responsible Endowments Coalition, and student activists from across Maine. The event was postponed due to weather and scheduling conflicts, and is scheduled to take place this coming week.

“We were hoping to get some of the dialogue out there because there are a lot of questions about divestment,” said McCoy. “Socially responsible investing is a new thing, so there is not a ton of data for it and it’s not quite so established in people’s minds.”

Mills declined to attend the panel, but GBA hopes that other members of the administration will attend.

“We hope they will come, especially if they’re opposed,” said McCoy. “They can challenge our panelists—it’s what they’re there for, to answer questions.”

Although the combined investments of college endowments represent a minimal amount of fossil fuel revenue, McCoy and Goodrich argue that the intent behind divestment is mostly symbolic.

“Divestment represents dissatisfaction among shareholders,” said McCoy. “The U.S. has the best higher education system in the world, and if educational institutions are making a statement against fossil fuels, it would be very impactful.”

McCoy said that she hopes enough schools will divest to create a “PR nightmare” for the fossil fuel companies.

“It’s not about the money,” said Goodrich. “It’s about framing the fossil fuel industry as a perpetrator. It’s about making a statement that colleges aren’t going to be complicit in climate change. That’s the power of divestment.”