Barnard College Endowment to Divest From Climate Change Deniers

(Bloomberg) -- Barnard College's board of trustees voted to divest from energy companies that deny climate change, putting into question the $286 million endowment's relationship with its money manager Investure.

The board approved the measure Saturday, saying the college will “distinguish between companies based on their behavior and willingness to transition to a cleaner economy.” In 2014, Investure lost a client, the Rockefeller Brothers Fund, which decided to divest from fossil fuel companies.

Investure, founded in 2003 by former University of Virginia endowment head Alice Handy, manages money by pooling its clients assets rather than tailoring portfolios. Handy didn't respond to an email or phone call seeking comment.

“We've got to make a decision in due course about the way forward,” Robert Goldberg, the school's chief operating officer, said about Barnard's relationship with Investure, which dates back a decade. “It's worked for her and it's worked for us but as times have changed we have to evaluate where we are in the world and what are our priorities.”

Selecting Companies

The women's college, which is affiliated with Columbia University in New York, is deciding which companies to blacklist and discussing how to implement the change with Investure, Goldberg said prior to the vote.

Barnard has about $18 million of investments in fossil fuel companies, largely private equity partnerships entered into through Investure, Goldberg said. Divestment will take time because the only way to unwind the partnerships is to sell and “we don't want to sell at a discount.”

Rockefeller Brothers, which has an $816 million fund, hired a unit of money manager Perella Weinberg Partners that customizes portfolios. Smith College, another Investure client, is facing pressure to divest.

Students Protest

A student group, Divest Smith, demonstrated on campus March 2 to push the board to remove fossil fuel investments from its $1.7 billion endowment. Smith last year formed a group of students, faculty and staff to review the issue. Smith's board isn't voting on the divestment issue at its meeting this weekend, but will receive the study group's report and meet with students, a spokeswoman said on March 3.

The endowment had 6 percent in fossil fuels -- 3.6 percent in private equity and 2.4 percent in public companies as of February 2016, Smith President Kathleen McCartney said in a letter that month to the Northampton, Massachusetts-based college community.

The portfolio had 9.4 percent invested with managers who follow environmental, social or governance factors including $1 million invested in 2014 in a sustainable global equities fund managed by Investure, according to the letter.

Barnard had an investment decline of 4.5 percent in the year through June 30 while Smith lost 5.9 percent, Investure's worst-performing university client. U.S. college endowments on average lost 1.9 percent in fiscal 2016, their biggest loss since the financial crisis, according to the National Association of College and University Business Officers and money manager Commonfund.

Movement Spreads

The fossil fuel divestment movement has spread to hundreds of college campuses in the last five years as activists advance a campaign to sell the stocks of 200 companies with the largest reserves of oil, gas and coal, which when burned are blamed for global warming. While dozens of colleges have agreed to divest, many have limited their commitment to just coal or oil and tar sands companies.

Barnard students initially pressed for a broad divestment pledge before proposing a more limited measure that would target only those fossil fuel companies that seek to deny climate science or thwart efforts to mitigate the impact of global warming. A proposal was endorsed by a committee of Barnard trustees, faculty and students last year.

“The point is to try to get to a more sustainable portfolio,” said Goldberg, who becomes interim president when Debora Spar departs this month to run Lincoln Center in New York. “Climate change is right in front of us -- institutions like ours have to act in some way.”

To contact the reporter on this story: Michael McDonald in Boston at mmcdonald10@bloomberg.net.

To contact the editors responsible for this story: Mary Romano at mromano6@bloomberg.net, Josh Friedman