Dear Members of the Amherst College Community,
In the aftermath of its winter meeting the Board of Trustees voted unanimously to approve a Statement on Sustainability and Investment Policy. The statement acknowledges the grave threat posed by climate change, the role in climate change played by human activity, and the responsibility we bear to confront this challenge. It commits Amherst College to a path that will make sustainability a key consideration in both the College’s daily operations and its investment process. The statement builds on the important sustainability efforts pursued by the administration for more than a decade. And it welcomes the call by many in the Amherst community for clarity and action.
The statement supports developing a strategy for achieving a carbon-neutral footprint—something that only a handful of colleges and universities have achieved. The statement does not endorse divestment of the endowment from fossil fuels. It calls for developing a framework for investing with managers who thoughtfully and consistently incorporate environmental considerations into their investment decisions. Progress in these and other areas will be assessed by the College’s new Office for Sustainability and by the Investment Office, and information will be available to the Amherst community. In laying down standards, we must hold ourselves to them.
The Board’s statement defines sustainability as a basic College objective—one that will be transformative over time—and challenges Amherst to establish itself as a model. At a moment when so many American institutions are regarded with skepticism, it is incumbent on higher education, and on places like Amherst, to lead by example: in the way we think, teach, and debate; in the way we live together as a community; and in the way we protect and sustain our environment and our planet.
Sincerely,
Cullen Murphy
Chair
I.
The Board of Trustees of Amherst College is united in the belief that the long-term threat of climate change is real, and that human activity contributes to climate change. We are also united in the belief that Amherst has a responsibility to match its convictions with behavior—to display leadership by taking steps that make a difference.
The issue of divestment was initially raised at Amherst with respect to direct investment of the endowment in the coal industry. At the time, Amherst had no direct investment in coal—and Amherst still has no direct investment in coal. But the Board believes that the College can and should seize the opportunity to take a number of concrete actions. The word “sustainability” has been used in various ways, but fundamentally it means the responsible stewardship of resources to sustain the viability of the environment and the planet. The College can adopt policies that embed sustainability in its operations, in its investment process, and in its life as a community. It can also serve, with other institutions, as an example of what sustainable policies can achieve.
II.
Amherst College is committed to serving as a leader on sustainability through its institutional behavior and activities. The impact of doing so would be both pragmatic and symbolic. New sustainability measures—building on the work of the past decade, which has seen the College’s greenhouse emissions reduced by one third—are currently being discussed as Amherst develops both a Strategic Plan and a Climate Action Plan. Both efforts rely on the participation of the entire campus community. While acknowledging that details matter, that the discussion on campus will need time to reach firm conclusions, and that the administration must look closely at any proposals in light of available resources, the Board of Trustees would in principle be prepared to support a wide range of measures, such as the following:
- Developing a strategy for Amherst to achieve a carbon-neutral footprint within a stipulated period of time.
- Continuing to decrease the College’s carbon footprint by building a second co-generation plant and exploring the options for alternative forms of energy, such as solar.
- Setting aside a portion of the endowment to create a significant pool for investment in major on-campus capital projects that would enhance clean-energy and energy-conservation efforts.
- Creating a revolving fund, replenished with money saved or earned, to support smaller clean-energy projects on campus suggested by members of the community.
- Supporting the investment required to make sustainability a defining feature of Amherst’s educational and community life.
III.
The Amherst endowment is intended to provide perpetual support to the College. This time horizon enables Amherst to take advantage of long-term opportunities unavailable to short-term investors. At the same time, it exposes the College to long-term risks, such as those posed by climate change. The Board believes that making environmental considerations part of the investment process is sound in practice as well as in principle; that doing so is integral to the long-term financial health of the endowment; and that this is in keeping with the Board’s fiduciary responsibility. Going forward, the investment committee of the Board will develop a framework to:
- Understand the extent to which endowment managers incorporate environmental factors, as they do many other factors, into the investment process.
- Invest with managers who thoughtfully and consistently incorporate environmental considerations into the investment process.
- Stay on the forefront of environmental best practices, and connect regularly with thought leaders in the field.
The purpose of the endowment is to leverage the College’s resources—consistent with our principles, and in the context of increasingly difficult economic pressures—in the service of a greater good: enabling expanded access, subsidizing tuition for every student, paying for the best teachers and facilities, creating knowledge, and supporting basic operations. The Board believes that a strategy of inquiry, analysis, and engagement with our investment managers, and of broadening the criteria by which managers are evaluated, is consistent with Amherst's values. It is also a more effective way, over time, to assert those values, including a core commitment to sustainability, than systematically excluding individual companies, sectors, or industries would be—in other words, divestment. This approach would likely also be more beneficial to the endowment. It is an approach that seeks common ground at a place where values and enlightened self-interest meet.
IV.
Finding the right path involves trade-offs. In terms of fossil fuels, the trade-off is not limited to endowment investments. It is a trade-off that each person makes every day, and therefore understands. At Amherst, those who agree fervently on an ultimate goal—reducing greenhouse emissions—will have different opinions about whether divestment from all fossil fuels would have any impact in the market or carry much symbolic weight. They will have different opinions about whether, or when, endowments should be used for purposes beyond financial stewardship. But at Amherst we can all agree that establishing the College as a model for sustainable policies and operations is a worthy goal. That commitment is embodied in the new Office for Sustainability, which will help ensure that the steps we take are ambitious, broad-based, unremitting, and real. It is essential that effectiveness can be evaluated, that our policies are transparent, and that the College retains the ability to be flexible in the face of changing realities. The College’s chief investment officer and the director of the Office for Sustainability will provide regular assessments of progress to the administration and the Board.
The Board is grateful to the students of the Green Amherst Project, who have urged the College to raise its ambitions; to members of the faculty and a number of very involved alumni, who have made a similar case; and to the administration, which has been quietly and effectively making great strides for years, on its own initiative and with the support of the community.
Adopted, Board of Trustees
Amherst College