ESG investment strategies, a method for climate justice

Portland State University is on its way to becoming the first university in Oregon to have no investments in the Carbon Underground Top 200 companies, which are companies that own the most global fossil fuel reserves, and hence have the most potential for producing high amounts of carbon emissions. 

As a result of student advocacy on the Divest Portland State (DPS) campaign, an Environmental Social Governance (ESG) statement was added to the PSU Foundation’s investment policy earlier this year. This method for screening and monitoring companies is used by the entire University of California system, which has sold and reinvested $200 million in fossil fuel holdings in recent months. 

After hosting the Northwest Regional Convergence in October 2014, Divest Portland State partnered with other student organizations at PSU to educate the student body about divestment from fossil fuels. We collaborated with the Associated Students of Portland State University (ASPSU), PSU’s student government, to hold an informational session that featured professors and professionals from different backgrounds. We also surveyed the student body and found out that 81 percent of students were in support of PSU’s divestment of fossil fuels.

Check out the Divest Portland State video, featuring students, professors, and DPS members:

In February 2015, Divest Portland State participated in Global Divestment Day, a series of events around the world that called on institutions to divest from the top 200 fossil fuel companies, as well as the People’s Climate March in Portland. Locally, our partners from 350.org, 350PDX, pushed for the city of Portland and Multnomah County to divest from fossil fuels.

During this time, the PSU Foundation, the nonprofit that oversees the University’s endowment, was going through personnel changes, and DPS had a hard time communicating with the PSU Foundation. PSU’s endowment is currently about $55 million, and 2 percent of that endowment is invested in the Carbon Underground Top 200 companies. JP Morgan is the manager of the endowment, and invests the endowment according to principles laid out in the PSU Foundation’s statement of investment policy.

On May 28, 2015, DPS worked with organizers of Portland State’s annual Sustainability Celebration to leverage the event to advocate for PSU’s divestment from fossil fuels. During the event, I received a student leadership award, which I celebrated by bringing a protest sign to the stage (pictured). After the awards ceremony concluded, DPS advocates, dressed all in black to simulate an oil spill, filled the room, and were unexpectedly met by applause from the event attendees. As the event ended, I approached President Wim Wiewel and asked him to include DPS in the discussions regarding PSU’s investment on fossil fuels. President Wiewel promptly put me in touch with Paul Carey, the chief financial officer at the PSU Foundation.

Throughout the summer, DPS held a series of meetings with the PSU Foundation. As representatives of the student body advocating for the University to take climate change seriously, we learned about the different methods that various schools have used to make financial changes. Working alongside Mr. Carey, the summer was very productive, and the PSU Foundation revised its Statement of Investment Policy to include an Environmental, Social, and Governance statement.

Alongside Divest Portland State’s win, in September 350PDX celebrated success too: Multnomah County solidified their stance regarding divestment by adopting a resolution for a fossil fuel divestment policy, and the city of Portland added the Carbon Underground Top 200 to their “no buy list.”

This has already been a great learning opportunity for me. I’ve learned that there is a range of methods to accomplish every goal. And that each organization has its own method, whether they can call it socially responsible investments, divestment, a no buy list, or ESG strategies, all of these strategies are working toward a shared goal of combating climate change by making more responsible financial decisions. I also learned that we, the students, are the largest stakeholders on campus. It is up to us to bring forward the issues that we care about, because faculty and administration are here to serve us.

Later this month, I will be attending the Intentionally Designed Endowments forum here at PSU. The forum will bring together key stakeholders, such as university presidents, endowment managers, and higher education investment experts to have discussions regarding the management of university endowments. 

Whatever the method may be, one thing is clear: funding climate change has become risky business, and I look forward to collaborating with the PSU Foundation to make sure that the Carbon Underground Top 200 companies are no longer part of the University’s portfolio. Most importantly, I hope that this is only the beginning of a series of conversations that take place regarding what companies we invest in. Fossil fuels are not the only corporations we should discuss, as there are other corporations like for-profit private prisons that are profiting from human suffering. This is just the beginning of the divestment discussion. 

Alfredo Gonzalez is a senior environmental science major and the sustainability affairs director at ASPSU. Divest Portland State is a student group that is a product of the Student Sustainability Leadership Council in the Student Sustainability Center.