When Georgetown University Fossil Free turned in its divestment proposal to the Committee on Investments and Social Responsibly, it brought its movement one step closer to reaching a definitive answer on the fate of the university endowment’s investment in fossil fuels.
For years, the merits of divestment have persisted as a contentious topic on the Hilltop. And with the recent prominence of GU Fossil Free, the issue of divestment has clearly gained sufficient traction to mandate the attention of leading decision makers within the university.
For many, the issue of divestment appears explicitly cut and dry — if acting to divest means that Georgetown would no longer support fossil fuel companies that harm the environment, then there seems to be little reason not to do so. Yet when dealing with a proposal that could affect Georgetown’s already fragile financial performance and fledgling endowment, a particular element of pragmatic analysis must be added to the mix.
Georgetown needs a robust endowment not only to maintain its campus and symbolic status, but also to keep up with peer institutions, many of which have endowments much larger than its own. As of June 2013, the endowment measured in at about $1.2 billion, which the university describes as “modest” compared to peer universities.
With the endowment at such a critical juncture in Georgetown’s history and progression, it would be foolhardy to divest entirely if this means this action would significantly hurt the university’s financial standing. However, if divesting will not significantly harm Georgetown’s endowment, it may be wise to follow through with divestment.
Divestment is the moral high ground, but with such a difficult financial situation at hand, immediate divestment could prove to be a detriment to the university in the long run. But the only way to tell whether or not divestment is a fiscal possibility is to consider in great detail the effects divestment would have on the endowment — a feat that only the board of directors can accomplish.
Submitting this proposal to the proper financial authorities — first CISR, and then the board of directors — is the only route of action that will lead to a credible assessment of the effect that divestment would have on the endowment. Until the private details of our investments are assessed by the officials who are in a position to know the effects of divestment, it is unfair to dismiss the proposal on financial grounds when it has not been properly considered.
The nuance of the issue merits thorough consideration of the consequences of action. In light of GU Fossil Free’s meaningful impression on students and administrators, inspiring reflection upon this predicament, the CISR’s consideration of the proposal constitutes a noteworthy step forward. While the CISR has no authority to review specifics, its consideration is the first step to recognizing the moral significance of divestment, and preparing to determine the university’s ability to divest in light of its financial health.
Furthermore, should the CISR pass GU Fossil Free’s proposal, the board of directors would be obligated to automatically consider the proposal, demonstrating a respect for student input and opening the door to a serious conversation about whether or not divestment is right for Georgetown at this particular moment.
While student participation is crucial for issues affecting the Georgetown community, students should respect the ultimate decision of the board of directors. Its members know better than most the extent to which decisions on divestment would impact the endowment and school, and are thus entrusted with the final decision. Judging on morality alone, Georgetown should obviously divest, but if we need to strengthen our endowment first, then divestment will be worth the wait.