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Fossil Fuels Update

February 23, 2016

​Dear Students, Staff and Faculty:

We write to update the Smith community on the status of the college’s endowment with regard to fossil fuels.

Smith’s endowment has a total fossil fuels exposure of 6 percent. This figure reflects 2.4 percent in publicly traded investments and 3.6 percent in private equity holdings. We have no direct holdings in coal. Currently, 9.4 percent of the college’s endowment portfolio is invested with managers whose decisions are guided by environmental, social or governance (ESG) factors. This includes $1 million invested in 2014 in a sustainable global equities fund managed by Investure, the firm that oversees Smith’s endowment.

One of the questions raised by Divest Smith College students is the effect that full or partial fossil fuels divestment would have on our investment returns. Understanding this effect is important; more than one-third of the college’s operating budget—funding for faculty and staff salaries, financial aid, facilities and student services—comes from endowment income. To address this question, we have engaged an investment consultant, independent of Smith and Investure, to provide an objective analysis. Part of the consultant’s  work will include meeting with student activists to hear their questions and concerns. We expect the results of the study before the end of the fiscal year.

Review of our portfolio holdings is taking place in parallel with two broader initiatives. An Advisory Committee on Investor Responsibility (ACIR), chaired by Trustee Peggy Eisen ’75 and comprising students, staff and faculty, has been formed to advise the investment committee of the board of trustees on matters of social responsibility and the college’s endowment. Its role is to consult with the investment committee on social issues relevant to investing, to ensure that the endowment continues to be invested in a manner consistent with—and supportive of—the college's mission and values. ACIR’s scope encompasses, but is not limited to, fossil fuels.

At the same time, a Study Group on Climate Change, constituted last fall, is developing recommendations for how the college can mitigate climate change on our campus and contribute to broader climate change solutions. The group is co-chaired by Vice President for Finance and Administration Mike Howard and Associate Professor of Geosciences Amy Rhodes ’91; its members include staff, students, faculty and trustees.

We look forward to reporting on the divestment analysis and climate change study recommendations later this spring.


Kathleen McCartney

Elizabeth Mugar Eveillard ’69
Chair, Smith College Board of Trustees