Investigation Shows Yale Isn’t The Climate-Conscious Investor It Claims To Be

Yale spokesman says school "does not disclose or comment" on investments.

Yale University touts itself as a socially and environmentally responsible investor and has been celebrated for taking steps to distance its financial portfolio from certain fossil fuels. But it remains heavily invested in oil and gas — to the tune of several hundred million dollars ― according to an investigation by its own employees and students.

UNITE HERE Local 33, a union of graduate employees, and Fossil Free Yale, a student group pushing for the Ivy League school to divest completely from the oil and gas industry, confronted the university with their findings in a Tuesday letter to Yale’s chief investment officer, David Swensen.

Their analysis of Yale’s $25 billion in endowment investments shows that at the same time the university has been publicly positioning itself as a leader in climate-conscious investing, it was profiting off the fossil fuel industry, Elias Estabrook, a spokesperson for Fossil Free Yale, told HuffPost.

Local 33 and Fossil Free Yale said that since Swensen in 2014 urged the university’s investment partners to consider climate change in future financial decisions, Yale has continued to hold numerous investments related to energy extraction.

In June 2016, for example, Yale held $230 million worth of stock in Antero Resources Corporation, a Denver-based oil and gas company with extensive hydraulic fracturing operations, according to Securities and Exchange Commission filings. And as recently as June 2015, the university had around $110 million invested with ARC Financial Corp., a major Canadian private equity management company that specifically focuses on energy, according to Yale’s latest available tax filing.

The Connecticut university also had $53.7 million invested in Merit Energy Company, a privately held oil and gas producer, according to the company’s latest tax filing. And the school owned roughly $2 million worth of shares in Whitehaven Coal, the Australian company behind the controversial open-pit Maules Creek coal mine in South Whales, according to a website on which Local 33 shares its information on Yale’s investment assets.

The findings suggest Yale isn’t walking the walk, even as it has made major announcements about its commitment to sustainability and the role it plays in addressing climate change. And given the complexity of the university’s endowment model ― in recent decades, it has shifted away from investments in publicly traded companies and toward private equity investing representatives of Local 33 and Fossil Free Yale say its possible they’ve only scratched the surface of the school’s fossil fuel holdings.

David Swensen, Yale University chief investment officer, speaks during an asset management forum in Seoul in 2010.
David Swensen, Yale University chief investment officer, speaks during an asset management forum in Seoul in 2010.
Truth Leem / Reuters

In August 2014, Swensen wrote to each of the university’s fund managers about how climate change influences the university’s investment program. He said his office “bases its approach to global warming on the conclusion that greenhouse gas emissions pose a grave threat to human existence,” and recognizes that “climate change (caused by deforestation and emissions of carbon dioxide, methane and other gases) creates a substantial risk of significant changes to the world’s ecosystem.’’ That made “consideration of the impact of climate change essential when evaluating investment opportunities,” he said.

Although Swensen did not call for divestment, he urged the school’s external endowment managers to “assess the greenhouse gas footprint of prospective investments” as they invest funds.

Yale spokesman Thomas Conroy, responding to Tuesday’s letter from the two school groups, cited a 2014 statement in which the school declined to recommend divestment but took note of Swensen’s guidance on the issue.

Asked to comment on specific financial holdings, Conroy said, “Yale does not disclose or comment on its investments.”

Like many other universities, Yale’s board of trustees, known formally as Yale Corporation, has resisted calls that it divest from fossil fuels. The Yale Corporation Committee on Investor Responsibility, which advises the board on policy matters concerning ethical investing, in August 2014 argued that divestment was a misguided and ineffective approach to addressing the climate crisis. It said the school would have its “greatest impact” on the issue through its core mission of research, scholarship and education.

However, it adopted new guidelines saying Yale “will generally support reasonable and well-constructed shareholder resolutions” that seek “company disclosure of greenhouse gas emissions, analyses of the impact of climate change on a company’s business activities, strategies designed to reduce the company’s long-term impact on the global climate, and company support of sound and effective governmental policies on climate change.”

In April 2016, Swensen announced in a second letter that Yale had identified several investment partners that held positions “inconsistent” with its policies on climate change. Two investors responded by divesting around $10 million of the school’s endowment from coal and oil sands operations.

Some environmentalists celebrated the move. Bill McKibben, a leader in the fossil-fuel divestment movement, called it a “key day” in that effort.” Others, however, criticized what they saw as a decision based on economics rather than ethics. At the time, a communications director for Fossil Free Yale called the announcement “progress,” but “not divestment,” according to Yale News.

That “partial divestment” prompted Local 33 and Fossil Free Yale to look more closely at Yale’s holdings.

“We were very surprised to discover that in fact the university, through its endowment investments, remains bullish on fossil fuels and continues to invest in fossil fuels and in the carbon economy,” Aaron Greenberg, chair of Local 33, told HuffPost.

“There are so many of these examples where it seems like Yale is waiting until the science screams at them about how environmentally unsustainable these investments are, and not on their own evaluating significant environmental and social risks,” he said.

Giant dump trucks haul raw tar sands to be processed at the Suncor tar sands mining operations near Fort McMurray in Alberta, Canada in 2014.
Giant dump trucks haul raw tar sands to be processed at the Suncor tar sands mining operations near Fort McMurray in Alberta, Canada in 2014.
Todd Korol / Reuters

Greenberg and Estabrook say all of the investments in the disclosure reports are troubling ― particularly the 2015 stock acquisition in fracking giant Antero. The natural gas industry has come under increased scrutiny for its release of methane, a greenhouse gas far more potent that carbon dioxide, and potential impacts of fracking on drinking water. In its most recent SEC disclosure, filed Monday, Yale maintained Antero shares valued at $91 million.

With its Antero stock, Yale is “in effect gambling that short term profits outweigh the possibility that science would reveal long-term harm to the earth’s climate,” argue Local 33 and Fossil Free Yale.

The groups also spotlight Yale’s stake in Whitehaven Coal through the $591 million the school has invested with Farallon Capital Management LLC, Whitehaven’s largest shareholder, according to the university’s latest tax disclosure. The Maules Creek coal mine, which opened in 2015, was a scene of mass protest over deforestation and threats to endangered species, with activists chaining themselves to construction equipment and hundreds of people being arrested.

“Along the lines of the Keystone Pipeline and Dakota Access Pipeline, it’s a central front in the battle to ensure that environmentally and culturally sensitive lands are protected,” said Greenberg.

The findings by Local 33 and Fossil Free Yale can be found at

A view of the Maules Creek coal mine under development in June 2014.
A view of the Maules Creek coal mine under development in June 2014.
Stringer Australia / Reuters

Global climate change has spurred pressure on institutions around the world to cut ties with fossil fuels. In the United States, those calls have intensified as the Trump administration advocates for increased domestic oil, gas and coal production and moves quickly to roll back Obama-era policies to curb greenhouse gas emissions.

Since 2011, more than 700 institutions worldwide have divested more than $5 trillion in assets, according to Go Fossil Free, an arm of McKibben’s environment group. More than 100 universities and colleges, including Harvard, Barnard, Stanford, Georgetown and the University of California have committed to either partial or full divestment.

Rachel Calnik-Sugin, a Yale sophomore and member of Fossil Free Yale, told HuffPost that if Yale truly wants to lead on climate change, it must disclose and divest.

“More than ever we need moral leadership from our universities,” she said. “We can’t just be passive.”

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