Yale Activists Want Divestment. David Swensen Isn’t Budging.

The endowment chief defended the investment office’s climate policy at a faculty meeting and in an open letter to the Yale community.

David Swensen (Peter Foley/Bloomberg)

David Swensen

(Peter Foley/Bloomberg)

Yale University chief investment officer David Swensen on Thursday reiterated his opposition to divesting the school’s $30.3 billion endowment of fossil fuels.

At a senate meeting for Yale’s arts and sciences faculty, as well as in an accompanying letter published to the investment office’s website, Swensen defended the policy that the endowment began implementing in 2014 to address financial and environmental risks related to climate change.

The policy, which asks Yale’s external asset managers to assess and mitigate climate change risk in their portfolios, does not explicitly require Yale or its managers to divest from any specific companies or assets. However, since 2014 the investment office has liquidated several investments that were “inconsistent” with its climate change principles, according to Swensen. In the letter dated February 20, Swensen wrote that the endowment reduced its exposure to thermal coal and oil sands — industries that he said would suffer under carbon regulations — to just 0.02 percent of the portfolio, down from 0.24 percent in 2014.

“Yale’s managers make critical decisions about what investments are selected for Yale’s portfolio and what issue are raised with company management teams,” Swensen wrote. “Given the nature of Yale’s investment strategy, direct dialogue with its managers is the most effective means of addressing climate change risk in the portfolio.”

The publication of the letter coincided with Swensen’s remarks opposing divestment at the faculty senate meeting on Thursday, which was largely dedicated to debating the merits of divesting the endowment of fossil fuels, according to the meeting’s agenda.

In addition to Swensen’s presentation, the senate also heard arguments in favor of divestment from professors including Robert Dubrow, faculty director of the Yale Center on Climate Change and Health, and Paul Sabin, director of the Yale Environmental Humanities Program, according to a statement from the Yale Endowment Justice Coalition. Representatives of the coalition — a student activist group campaigning against the endowment’s “unethical” investments in fossil fuels and Puerto Rican debt — also spoke at the meeting.


[II Deep Dive: David Swensen Wrote an Angry Email. Then He Pressed Send.]

The faculty senate meeting came just two weeks after Georgetown University announced that it would completely divest its $1.8 billion endowment of public and private investments in fossil fuel companies over the next ten years. The University of California similarly pledged to divest from fossil fuels last fall.

At Yale, students have been calling for the endowment to drop fossil fuels since at least 2012, when activist group Fossil Free Yale emerged. Recently, that activism included storming the field at November’s football game between Harvard and Yale. The New York Times reported that 70 protestors took to the field after the game’s halftime show, and that the number of demonstrators swelled to up to 500 people. The Yale Endowment Justice Coalition claims that more than 1,400 alumni and students have signed a pledge not to donate to Yale until their divestment demands are met.

Swensen, for his part, has periodically responded to divestment pressures through public letters, including most prominently the 2014 letter to Yale’s external managers, which outlined what was at the time a new policy to combat climate change risks. Swensen published a second letter in 2016, updating the Yale community on the impact of that policy.

Thursday’s letter offers another update, including commentary from Yale’s managers on how they approach climate change issues. In the letter, Swensen argued that engagement-based approach “reduces portfolio risk and supports our fiduciary responsibility — to provide substantial, stable financial support for our current and future scholars through the prudent management of Yale’s endowment.”

It is unclear what, if any, action the faculty senate will take following Thursday’s meeting. Swensen has, however, agreed to meet with the student activists behind the Yale Endowment Justice Coalition. In its statement on the faculty senate meeting, the group said it would meet with the endowment chief for the first time on February 28.