The Corporatization of Higher Ed Is Holding Back Fossil Fuel Divestment

By Eugenia Kim |

Academics, concerned students, or our government is not deciding the future of our universities. In looking at who has the decision making power at large colleges and universities across the country it is clear that those who have the power to make decisions are never going to be affected by those decisions. When it comes to the moral direction of a university’s finances the people who are making decisions have had it in their job descriptions to care about the bottom line. The fossil fuel divestment movement across college campuses is a moral question that is largely dependent upon the leadership of the schools. So when university administrators and trustees are drawn from the ranks of business tycoons, Wall Street executives, and real estate moguls, it’s hard not to question their motivations, or the future of the movement.

In the private sector, success is about maximizing profits and returns to shareholders. But academia is concerned with more than the bottom line. Universities are generally nonprofit organizations that provide a public good: education. Moreover, they are economic drivers, they produce world-altering research, and they take political stances on moral issues such as apartheid.

Yes, it is important that universities remain financially healthy and solvent; however, it should be noted that any kind of investment is risky, including investments in the fossil fuel industry. In fact, pension funds in both California and Massachusetts lost billions of dollars due to investments in coal and other fossil fuels.

One would expect that those who are involved in financial markets, banking, and business have experience in deciding which transactions are likely to yield gains and which are too risky to pursue. But in practice, this has not been the case. Take Georgetown University as an example: Its board members, who include managing directors of financial firms, chief financial officers of companies, and heads of investment management groups, didn’t have a problem engaging in bond swaps that are costing the university millions. Yet when students get involved or question the financial well-being of their university, the response they often hear is that they are not equipped to have an opinion on such matters.

In the University of California system, graduate students brought up risky borrowing practices and put time and energy into researching and writing a detailed report. In response, the chief financial officer, Peter Taylor, wrote an op-ed in the San Francisco Chronicle talking down to the students and suggesting that they shouldn’t question authority. “The students who have criticized the university’s policies should understand that just because they are in graduate school doesn’t mean they are experts in everything,” he writes. Now, he’s partly right: Students are not experts. That’s precisely why they’re called students. However, he fails to use this as a teaching moment—precisely what the University of California system is meant to do.

Perhaps speaking with students who are interested in higher education financial practices would allow them to feel that those who purport to have their best interest at heart actually embody the university’s mission of teaching and scholarship. However, if we instead follow Mr. Taylor’s example of ad hominem critique, we might question whether his previous role as Managing Director of Public Finance at Lehman Brothers has anything to do with his defense of university decisions.

At my own university, NYU, students on multiple causes have tried to question and approach the institution about practices from investments, expansion, and student debt. Each time, my university has met our efforts over the course of the past few years with prohibitive practices. Wonderful professors, peers, and campus organizations at NYU have made me feel like my thoughts are important and worth developing. For that, I am grateful. However, NYU has also been the place where I’ve felt most small and insignificant, because no matter how much research and effort I put into an idea, and no matter how many official channels I go through, the status quo remains unchanged. In the past few years, NYU has been accused of not prioritizing low-income students and not supporting international students who are in need. One of its previous board members served subpoenas to students who had the audacity to question his practices.

For the past three years, the NYU Divestment movement has used both official and unofficial channels to obtain a meeting with the board of trustees, but the trustees have refused to hear their presentation. Given these past instances, I don’t think it’s unreasonable to assume that the board will continue to resist any student input on this issue. While I hope that the trustees will side with the students, faculty, and the collective voice of NYU’s university senate, which voted for divestment last year, they’re under no obligation to do so. I can’t help but wonder why we are so beholden to them.

The board of trustees at NYU controls the university’s financial well-being, but I would argue they also make a moral statement about who and what they choose to support and listen to. Of course, I’m not saying that all members of the board act in prohibitive ways; I’m simply doing precisely what my university education has enabled me to do: question, think critically, and learn. I hope that members of the board are capable of doing the same, but I question whether they fully understand the weight of the decisions they make and how they will affect not just the students in this community but the wider world.

I hope that they will think critically about the effects of climate change, especially considering the summit in Paris later this year. And I hope that they will learn that students are worth listening to. Most of them were once in our shoes, and perhaps they have forgotten the importance of being given a seat at the table and a voice in the room.

Eugenia Kim is chapter leader of Roosevelt Institute @ New York University and a member of the Rethinking Communities Brain Trust.

Eugenia Kim is a program associate for the Roosevelt network.