Request for the Formation of an Ad Hoc Committee

on Coal and Oil Investments

Prepared by: Law Students for a Sustainable Endowment

September 9, 2014

Contacts
Scott Bloomberg sbloombe@umich.edu
Aaron Schaer schaer@umich.edu

Table of Contents
Executive Summary ...................................................................................................................................... 1
I. Introduction ............................................................................................................................................... 2
II. The Precedent for Divestment .................................................................................................................. 4
a. A Basic Procedural Framework ............................................................................................................ 4
b. The Precedent for Forming a Divestment Committee .......................................................................... 5
III. Adhering to the CFOs Standard ............................................................................................................. 6
a. Prong One: A Consensus on Climate Change ....................................................................................... 6
b. Prong Two: Antithetical to the Universitys Core Mission and Values................................................ 9
1. Sustainability as a Core Value and the Attributes of Coal and Oil ................................................... 9
2. The Pursuit and Dissemination of Truth and Knowledge and the Activities
of the Coal and Oil Industries ............................................................................................................. 11
3. Conclusion of Prong Two ............................................................................................................... 14
c. Prong Three: Uniquely Responsible ................................................................................................... 15
IV. Common Misconceptions ..................................................................................................................... 17
a. The Hypocrisy Misconception......................................................................................................... 17
b. The Empty Gesture Misconception ................................................................................................. 18
c. The Financial Risk Misconception .................................................................................................. 18
d. The Slippery Slope Misconception ................................................................................................. 19
e. The Hiring and Funding Misconception .......................................................................................... 19
V. Conclusion ............................................................................................................................................. 20

Executive Summary
In accordance with the University of Michigans process and precedent, Law Students for
a Sustainable Endowment (LSSE) requests that the Regents of the University of Michigan form a
committee to consider divesting the Universitys endowment from coal and oil investments.
There is a three-prong precedent that signals when the Regents must create a committee
to consider divestment: 1) there must be a consensus on campus surrounding the issue; 2) the
activities of the particular industries must be antithetical to the Universitys core values; and 3)

these industries must be uniquely responsible for the problem. Coal and oil investments meet
each prong.
First, there is a consensus across all levels of our campus. The Graham Sustainability
Institutes most recent survey found that around 89% of undergraduate students, 93% of graduate
students, and 93% of faculty think that climate change is happening. The study found that a
similar percentage believed humans are contributing to it, and that the issue is important to them
personally. A consensus is further demonstrated by the educational and extra-curricular pursuits
of students and the operational changes the University has made to reduce greenhouse gas
emissions. Few significant issues, if any, enjoy this level of campus support.
Second, the activities of the coal and oil industries are antithetical to the Universitys core
values. In two ways this is true. These industries offend the Universitys core values of
sustainability and academic integrity. These were the crucial elements in the Universitys choice
to divest from tobacco companies in 2002.
And third, the coal and oil industries are uniquely responsible for climate change. The
pollution from their industries is a chief driver of climate change, and their political and
misinformation campaigns have undermined progress on this issue.
Thus, the precedent is met.
This does not mean that the University must divest from the coal and oil industries.
Rather, when an issue meets the precedent, all the University must do is form a committee to
consider the issue. That is what LSSE is asking that the Regents create a committee to consider
divesting from the coal and oil industries.
LSSE is acutely aware that the endowments main purpose is to fund academics. That
being said, this University has twice before divested from industries when it determined that they
involved such significant social and moral implications . . . that normal investment procedures
should be altered. The coal and oil industries, as the primary drivers of climate change and the
campaigns that have prevented steps to counteract it, are investments that meet this standard.
Further, LSSEs proposal is crafted to protect our endowment as well as our core values.
Once formed, the committee can establish several limiting principles to ensure both financial
stability and moral consistency. This dual objective is well past due, for while the rest of the
University has strived to balance economic realities with environmental ones, the endowment
has been noticeably exempt.
LSSE recognizes that forming a committee is a serious action that should not be called
for lightly. We also recognize that addressing climate change is a challenge to which there is no
silver bullet. But by all credible accounts, climate change is the most significant long-term issue
facing the world today. And simply because solutions are complex and involve difficult
decisions does not mean that the University should take no action at all. In fact, when a
consensus exists and when core values are so directly implicated, the Universitys precedent
demands the opposite.
I. Introduction
In May 2013, atmospheric concentrations of carbon dioxide (CO2) passed 400 parts per million
(ppm) for the first time in human history.1 Passing this symbolic threshold served as yet another
illustration of the dangerous and unprecedented state of our environment. This new revelation not only
1

Scripps Institution of Oceanography at the University of California, San Diego, Carbon Dioxide at Mauna Loa. .
. (May 10, 2013). Available at https://scripps.ucsd.edu/news/7992.

3
increased the concerns of traditional environmental groups, but also groups not traditionally interested in
environmental causes. The World Bank2 and International Monetary Fund3 both recently warned about
the dangers of climate change.
While climate change is not a new issue, passing the 400 ppm threshold is a recent reminder that
we are losing a catastrophic battle. Climate change is no longer a challenge for the future; it is an
immediate reality with global and local consequences. In recent years, the world has experienced more
extreme weather in the form of floods, droughts, and severe storms to name a few. This global trend is
embodied by the recent polar vortex that caused the first school cancellation at the University of Michigan
(University) in over 35 years.4 This is just the most recent, visible, and local symptom of climate
change, occurring on the coattails of the worst drought in Michigan in over a half century.5 To its credit,
the University has taken actions against climate change, recognizing that inaction would offend its core
value of sustainability and contradict the consensus of the University community.
In light of the dangers of climate change and the Universitys unequivocal stance on the issue,6
Law Students for a Sustainable Endowment (LSSE),7 requests that the University of Michigan Board of
Regents (Regents) form a committee to determine whether the University should divest its endowment
from coal and oil investments.8 We make this request in adherence to the Universitys process for
divestment. LSSE is not demanding that the University immediately divest from these funds. Rather, we
are requesting that, consistent with the established process, the Regents form a committee to consider
whether complete or partial divestment is appropriate.
LSSE also makes this request consistent with University precedent on divestment. We recognize
that divestment is a serious action that should not be called for lightly. While [t]he Universitys
endowment must not be regarded primarily as an instrument of political or social power,9 the University

The World Bank, Turn Down the Heat Why a 4C Warmer World Must Be Avoided (Nov. 2012). Available at
http://climatechange.worldbank.org/sites/default/files/Turn_Down_the_heat_Why_a_4_degree_centrigrade_warmer
_world_must_be_avoided.pdf
3
Ben Hirschler, Reuters, Davos Strives to Make Climate Talk More Than Hot Air (Jan. 25, 2013). Available at
http://www.reuters.com/article/2013/01/25/us-davos-climate-idUSBRE90O0LB20130125.
4
Though some may question how climate change could cause the most severe winter in over three decades, NASA
concluded that it was actually an extreme increase in temperatures in the arctic that was responsible for the eventual
polar vortex. Coy, Lawrence; Pawson, Steven, NASA Global Modeling and Assimilation Office, "GEOS-5 Analyses
and Forecasts. . ." Available at http://gmao.gsfc.nasa.gov/researchhighlights/SSW.
5
Sam Nelson, Reuters, Drought drops Lake Michigan water to near record low (Nov. 30, 2012). Available at
http://www.reuters.com/article/2012/11/30/us-transportion-water-drought-idUSBRE8AT17E20121130.
6
E.g., Research universities in particular are well positioned to make a difference. Our basic research, expertise in
medicine and public health, and pioneering approaches to social challenges, are a powerful arsenal for confronting
climate change. Mary Sue Coleman, Going Green, Staying Blue: Sustainability at Michigan (Sept. 27, 2011).
Available at http://sustainability.umich.edu/news/going-green-staying-blue-sustainability-michigan (hereinafter
Coleman Address).
7
The Divest & Invest Campaign contributed to this proposal and has endorsed our request.
8
We do not mean to include commingled funds (such as mutual funds) which may have some investments in the
coal and oil industries. We only mean to include individual investments in these industries and industry specific
commingled funds. We also do not include long-term private equity investments which cannot be divested from.
9
Report and Recommendations of the Senate Assembly Advisory Committee on Financial Affairs on Investment
Policies and Social Responsibility at 2 (Feb. 28, 1978) (hereinafter Apartheid Committee).

4
must accept some responsibility for the political and social implications of its investments. 10 The
precedent established by the Universitys decisions to divest from companies aligned with apartheid and
from tobacco companies strikes a balance between these two principles. After studying this precedent,
LSSE believes that its request fits squarely within it. The perils of climate change exemplify an issue that
poses such significant social or moral implications . . . that normal investment practices should be
altered.11
We do not suggest that a set of noncontroversial investments [can] be found that would not
offend [anyones] moral sensibilities.12 But, that the University cannot achieve moral purity in its
investments[,] does not mean that it can never or should never take a moral position on any investment.13
We seek divestment only from two industries whose attributes and activities most egregiously offend the
Universitys core missions and values.14 Moreover, like the apartheid and tobacco divestments, divesting
from coal and oil would not cause financial risk that could impair other core missions. The divestment
committee could establish limiting principles to ensure that divestment is done in a financially responsible
manner. For example, the committee could recommend that divestment be staggered over time, or it could
recommend only a partial divestment such as divestment from coal and oil equities and debts (which
comprise only 1% of the Universitys endowment15).
The Universitys process for divestment begins with the creation of an ad hoc committee by the
Regents to study whether divestment is appropriate. In accordance with the Universitys established
precedent, and considering the consensus among the scientific and University communities, we believe
the Regents must form such a committee. Section II of this proposal explains and examines the
Universitys process and precedent for determining when divestment is appropriate. Section III details
how coal and oil investments fall squarely within this precedent. Section IV addresses some common
misconceptions about divestment. Section V concludes the proposal.
II. The Precedent for Divestment
a. A Basic Procedural Framework
Twice before, the Regents have voted to divest the Universitys endowment from a socially
irresponsible set of investments. First, in 1978, the Regents adopted a measure which led to the eventual
10

Id. at 3.
Id. at 4.
12
Id. at 3.
13
Report and Recommendations of the Ad Hoc Committee on Tobacco Investments, at 4 (Mar. 17, 2000)
(hereinafter Tobacco Committee).
14
We refer specifically to the Universitys core value of sustainability. See e.g., University of Michigan Vision
Statement, 10. Available at http://president.umich.edu/mission.php.
15
Based on data from October 2, 2012 FOIA request. Partial data available at http://www.divestum.org/uminvestment-data.html. Full data available upon request. This percentage is comparable to the percentage of tobacco
stocks in the Universitys endowment prior to tobacco divestment (0.8%). SACUA Minutes (June 2, 1997).
Available at http://www.sacua.umich.edu/sacua/sac06-02-97.pdf. See also SACUA Tobacco Divestment Report to
Senate Assembly (Sept. 29, 1997) (According to the University Treasurer. . . where an investment opportunity
represents only 1% or less of the portfolio. . . increased volatility will not be noticeable.) (PDF available upon
request).
11

5
divestment from companies doing business in South Africa that failed to take specific affirmative steps
towards opposing apartheid. This measure established a basic procedural framework for determining
whether divestment is appropriate.
If the Regents shall determine that a particular issue involves serious moral or ethical
questions which are of concern to many members of the University community, an
advisory committee consisting of members of the University, Senate, students,
administration, and alumni will be appointed to gather information and formulate
recommendations for the Regents consideration.16
Finding that the issue of apartheid met these standards, the Regents adopted such a committees
(the Apartheid Committee) findings. This committee explained the importance of divesting when it is
indeed appropriate.
[T]he Advisory Committee recognizes that by investing in a firm the University must
accept some responsibility for the political and social implications of a companys
activities. . . . The great issues of peace, human rights, and the preservation of the
environment arise in all sectors of the economy. . . . [S]ome measure of responsibility
does remain [for the University], especially in those cases in which an extraordinary
social evil is apparent and a broad consensus develops within the University community
concerning the moral shortcomings of a particular firm or type of investment.17
The Apartheid Committee continued by explaining that when such a case arises:
If . . . the Regents become convinced that the companies in question are not likely to alter
their questionable behavior within a reasonable period of time, then the University should
sell its shares and should not purchase any other securities of these firms until their
policies have changed.18
In sum, the Regents actions and the Apartheid Committees report establish the following twostep process: First, a committee shall be formed if the Regents determine that a particular issue involves
serious moral or ethical questions which are of concern to many members of the University community.
Second, if the Committee finds that an extraordinary social evil is apparent and there is a broad
consensus . . . concerning the moral shortcomings of a particular firm or type of investment, then the
University should sell its shares if the companies are not likely to alter their questionable behavior within
a reasonable period of time. The remainder of this proposal focuses on the first part of the divestment
process forming a committee since that is the appropriate action for the Regents to take at this time.
b. The Precedent for Forming a Divestment Committee
The divestment committee precedent established by the Regents and the Apartheid Committee
16

Minutes from the March 1978 meeting of the University of Michigan Board of Regents, at 8 (March 16, 1978).
Apartheid Committee, supra n. 9, at 2-3 (emphasis added).
18
Id. at 3.
17

6
was relied on in 2000 to form the Ad Hoc Advisory Committee on Tobacco Investments (Tobacco
Committee). The Tobacco Committee was tasked with determining whether the University should divest
from all tobacco company holdings. In its report, the Committee noted that the existence of serious
moral or ethical questions which are of a concern to many members of the University community is the
threshold for deciding when to appoint an investigative committee.19
Building on the Apartheid and Tobacco Committees reports, in 2005 the Universitys Chief
Financial Officer (CFO) provided his interpretation of the precedent for requesting a divestment
committee:
We will ask the Regents to appoint an ad hoc committee to investigate the ethical and
moral implications of our investments only when the following conditions have been met:
1) The concern to be explored must express the broadly and consistently held
position of the campus community over time.
2) There must be reason to believe that the behavior or action in question may be
antithetical to the core mission and values of the University.
3) There must be reason to believe that the organization, industry or entity to be singled
out may be uniquely responsible for the problems identified.20
The CFOs interpretation synthesizes the precedents set by the Apartheid and Tobacco
Committees into a concise standard. LSSE endorses this standard and considers it to be the standard by
which our request should be judged.
III. Adhering to the CFOs Standard
This section will demonstrate that adherence to the Universitys professed divestment precedent
necessarily results in the forming of an ad hoc divestment committee. Specifically, we examine each
prong of the CFOs standard, finding that the broadly held campus position regarding climate change, the
Universitys commitments to scientific integrity and sustainability, the unique attributes of coal and oil,
and the activities of the coal and oil industries make the formation of a divestment committee appropriate.
a. Prong One: A Consensus on Climate Change
1) The concern to be explored must express the broadly and consistently held position of
the campus community over time.
Climate change is an issue that enjoys a broadly and consistently held position of the campus
community. This consensus is expressed through statistical analysis, the Universitys sustainability
programs and goals, its curriculum and research, and various student initiatives, all discussed below.
Importantly, the precedent does not require a consensus that divestment is the appropriate

19
20

Tobacco Committee, supra n. 13, at 6.

CFOs statement on University investment policies, November 17, 2005. (PDF available upon request).

7
response to climate change.21 The Apartheid Committee specifically noted that a consensus existed
regarding the issue of apartheid, but that no such consensus existed regarding the appropriate University
response.22 Even so, the University divested. In the same vein, the Regents formed the Tobacco
Committee despite the fact that the University community was divided between those who believed it
would be ludicrous to divest from tobacco companies, and those who believed it would be ludicrous
not to.23 Thus, the appropriate question to ask is whether there exists a broadly and consistently held
position about climate change, not about divestment as a response to climate change.
There can be no doubt that such a consensus exists. The Graham Sustainability Institute at the
University of Michigan performs an annual scientific poll on the culture of sustainability at the University
of Michigans Ann Arbor campus. This survey is called the Sustainability Cultural Indicators Program
(SCIP). The latest results not yet published are from 2013.24 These results show a broad consensus
about climate change. 89% of undergraduates, 93% of graduate students, 81% of staff, and 93% of faculty
think that climate change is happening. Only 5%, 3%, 6%, and 2%, respectively, think it is caused mostly
or exclusively by natural causes. 81% of undergraduates, 87% of graduate students, 84% of staff, and
92% of faculty consider climate change to be important to them personally.25
The 2012 data from SCIP further proves the existence of a consensus, and one that has existed
over time.26 The data showed that 81% of undergraduates, 85% of graduate students, 77% of staff, and
91% of faculty were mostly or completely convinced that climate change is happening, while a mere 3%
of undergraduates, 2% of graduate students, 6% of staff, and 2% of faculty said that they were not at all
convinced. Moreover, only 6% of undergraduates, 4% of graduate students, 6% of staff, and 3% of
faculty believed that climate change is happening mostly due to natural causes.
Even if this scientific polling data werent enough to demonstrate a consensus, a consensus about
climate change is made evident by several other factors. Chief among them is the Universitys Campus
Sustainability Integrated Assessment Goals announced by President Coleman in September of 2011.
Notably, the initiative includes a commitment to reducing carbon emissions by 25% by 2025.27 In her
speech introducing the initiative, President Coleman declared that there was broad support for
sustainability initiatives across all college campuses, and that Michigan will work to significantly
decrease our greenhouse gas emissions going forward.28

21

It is the role of the committee itself to determine whether divestment is an appropriate response.
The Advisory Committee on Financial Affairs is convinced that a general consensus exists among members of
the University Community that . . . the University must formally recognize the issue. No such clearly apparent
consensus exists, however, regarding the best procedure to follow with respect to the management of University
investments in corporations having operations in South Africa. Apartheid Committee, supra n. 9, at 5 (emphasis
added).
23
Tobacco Committee, supra n. 13, at 7.
24
Forthcoming (2014).
25
This figure is established by combining the responses extremely important, very important, and
somewhat important, and discounting the categories not too important and not at all important.
26
Sustainability Cultural Indicators Program: First Year Report Overview, at 1. Available at
http://graham.umich.edu/media/files/scip-overview.pdf.
27
http://sustainability.umich.edu/commitment.
28
Coleman Address, supra n. 6.
22

8
President Coleman also highlighted the unique role universities play as research and academic
institutions, calling universities like Michigan a powerful arsenal for confronting climate change.29 Per
President Colemans speech:

The University has over 670 faculty with expertise in sustainability issues.
Over 640 courses across campus have content about sustainability.
Over 25% of new interdisciplinary teaching positions are grounded in climate change and
other fields of sustainability.
The University has established the Graham Sustainability Institute to lead collaborative
sustainability education and research efforts on campus.
Eight University researchers shared the 2007 Nobel Peace Prize for their work on
mitigating climate change.30

In addition to the list enumerated by President Coleman:

The University has degrees - from concentrations up to PhDs - that are heavily focused
on climate change. These include the concentration in Climate Impact Engineering, the
Undergraduate Sustainability Scholars Program, the Program in the Environment within
the LSA, and the Erb Institute partnership between the School of Natural Resources and
the Environment and the Ross School of Business.
The University has increased its total sustainability research funding by 200% since
2003.31
The University has created the Planet Blue Student Innovation Fund to finance studentled environmental sustainability projects on campus.

Beyond the Universitys academic, research, and administrative commitment to combating

climate change, there is also an operational commitment. Under the leadership of the Office of Campus
Sustainability, the University has formed the Planet Blue Operations program, an initiative dedicated to
making University buildings more energy efficient, thus reducing the Universitys contribution to climate
change. This initiative is bolstered by the requirement that all new construction projects be LEED
certified. The University has begun purchasing wind generated energy, accounting for 2% of the total
electricity purchased for the Ann Arbor Campus. Operations has also converted over half of the
Universitys vehicle fleet to alternative fuels.32 Simply put, the University would not have invested the
millions of dollars necessary to make these operational changes were there not a broadly and
consistently held position about climate change.
The Universitys actions are not alone in demonstrating this consensus; the campus consensus on
climate change is also demonstrated by the actions of the students. On top of dedicating their college
careers to the academic pursuits discussed above, students are deeply engaged in hundreds of

29

Id.
Id.
31
http://sustainability.umich.edu/report/2012.
32
Id.
30

9
sustainability projects on campus and around the world.33 Most notable is the Student Sustainability
Initiative (SSI). SSI is a group of individual students and over 25 student organizations dedicated to
creating a culture at the University of Michigan that values long-term environmental sustainability.34
SSI acts as the central organizing body for most of the sustainability initiatives on campus. A diverse
group of other student organizations such as the Environmental Law Society, the Greek Life
Sustainability Team, and Students for Clean Energy have also helped increase the already widespread
support for combating climate change.
To be sure, these student organizations have also achieved significant results. For example, the
Kill-A-Watt initiative aims to collectively lower energy consumption in dormitories by ten percent each
year. Blue Lab an initiative sponsored by the College of Engineering is a student run organization that
works on renewable energy projects across the globe. Dozens of other student organizations host
speakers, conferences, and demonstrations regarding the dangers of climate change every year. Over
1,300 students, faculty, and staff completed training to become Planet Blue Ambassadors, a program
dedicated to promoting sustainable practices on campus.35 Additionally, students are frequently involved
in national movements calling for action on climate change. For example, over fifty students recently
attended the largest student conference on climate change in the country. And, needless to say, our
defending National Champion Solar Car Team is the envy of all.36
The amount of support the undergraduate Divest and Invest Campaign enjoys is a further
indication of a campus consensus on climate change. The campaign, with a goal of complete fossil fuel
divestment, represents a coalition of over thirty student organizations. Their request for complete
divestment was endorsed by the Michigan Daily. It was also endorsed by the LSA Student Government, a
governmental body representing approximately 20,000 students.37 The broad support for their campaign
demonstrates not only a campus consensus about climate change, but also the communitys desire for
prompt action to address it.
Finally, in addition to the LSA Student Governments endorsement of complete fossil fuel
divestment, a 2007 Michigan Student Assembly resolution is instructive. The resolution, passed
unanimously in February of 2007, encouraged the University to purchase 100% of its energy from
renewable energy sources by the year 2015, and proclaimed that there are mounting concerns among
students and faculty about the risks of climate change.38 This action, taken seven years ago, shows not
only a consensus, but a sustained consensus about climate change.

b. Prong Two: Antithetical to the Universitys Core Mission and Values

33

http://sustainability.umich.edu/report/2013/#student_engagement.php
http:// http://umssi.org/about.
35
http://sustainability.umich.edu/report/2013/#greencampus_seven.php
36
http://solarcar.engin.umich.edu.
34

37

http://www.lsa.umich.edu/UMICH/facstaff/Home/Office%20of%20the%20Dean/LSA%20Facts/2013_Fact_Sheet.p
df
38
PDF available upon request. Hard copy available at the Bentley Historical Library.

10
2) There must be reason to believe that the behavior or action in question may be
antithetical to the core mission and values of the University.
Framing this question as the Tobacco Committee did,39 we ask whether the attributes of coal and
oil products, and the activities of the industries, are antithetical to the core mission and values of the
University. Due to the inherent attributes of coal and oil and the industries campaign to raise doubt about
the science of climate change, there can be no question that the attributes and activities are antithetical
they run directly against the Universitys commitment to combating climate change, to education and
research, and to the pursuit and dissemination of truth and knowledge40 inherent in those pursuits.
1. Sustainability as a Core Value and the Attributes of Coal and Oil
Sustainability is a core value of the University of Michigan, and reducing the Universitys impact
on climate change is the most necessary aspect of fulfilling that value. In addition to the Universitys
research, academic, administrative, and operational commitments discussed above, the Universitys
Vision Statement makes its values clear: We look for tools and strategies to create and enhance
sustainable practices in all facets of operations and seek to lead in the global quest for a sustainable
future. Indeed, sustainability defines the University of Michigan,41 and with . . . continued efforts to
reduce our carbon footprint, U-M is striving to operate in the most environmentally friendly manner
possible.42 With statements like these, the University has recognized that continued, perpetual, reliance
on coal and oil does not align with its core values. President Coleman affirmed this position by declaring
that the University is committed to significantly decreas[ing] our greenhouse gas emissions going
forward. We will be aggressive and relentless. As a campus, a community, and a planet, there is no
other approach to take.43
We have singled out coal and oil products in our proposal because they are the primary drivers of
climate change.44 Reserves of coal and oil are extracted from the earth for one reason: to convert them to
usable forms of energy. During this conversion (i.e., combustion), carbon dioxide (CO2) the most
abundant greenhouse gas is released into the earths atmosphere. Greenhouses gases retain radiation
from the sun in the form of heat, and higher concentrations of these gases retain larger amounts of heat.
The exponential increase in the burning of fossil fuels over the last 260 years is pushing concentrations of
CO2 far above levels the earth has experienced for nearly the past 1 million years,45 and potentially the
past 20 million years.46 These elevated levels of CO2 have been directly linked to the global increase in
39

The Tobacco Committee considered whether the attributes of tobacco products and the activities of the industry
[are] antithetical to the core missions of the University. Tobacco Committee, supra n. 13, at 26.
40
See Section III(b)(2).
41
Coleman Address, supra n. 6.
42
Mary Sue Coleman, Letter from the President. Available at
http://sustainability.umich.edu/report/2013/president.php.
43
Id.
44
C.f., Tobacco Committee, supra n. 13, at 11 (Tobacco companies make a product that is unique in its capacity to
cause death in its intended use.).
45
Intergovernmental Panel on Climate Change (IPCC), Climate Change 2013: The Physical Science Basis.
Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA (hereinafter IPCC).
46
Tripati et al., Science 326, 5958 (2009)

11
temperatures and other dangerous changes to our climate system.47
The entire business model of the coal and oil industry is based on the extraction and sale of these
fuels to a myriad of end-use consumers who burn the fuels for energy and release CO2 in the process. A
business model that at its core results in the continued increase of atmospheric CO2 concentrations, and
thus the exacerbation of climate change, is inherently unsustainable (We refine and expand upon these
ideas further in Section III(c), below.).
Given the Universitys core value of sustainability, it is antithetical to invest in the most
unsustainable products in the world those which are the primary drivers of climate change. Although the
University necessarily relies on coal and oil for some of its energy, the declarations and actions discussed
here and in Section III(a) show that the University is committed to ending or significantly reducing this
reliance. The environmental consequences inherent to continued reliance on coal and oil cannot be
reconciled with its core value of sustainability. In this way, coal and oil products are antithetical to the
Universitys core value of sustainability.

2. The Pursuit and Dissemination of Truth and Knowledge and the Activities of
the Coal and Oil Industries
One of the chief reasons the University divested from tobacco in 2000 was the concerted effort of
that industry to cover up the serious health effects of its product. The Tobacco Committee explained that
the brazen dishonesty of the tobacco industry for so many years about a matter of such enormous publichealth significance is . . . unquestionably antithetical to the core missions of the University. That
industrys cynical and hypocritical attempt . . . to cloak itself with the mantle of scientific legitimacy . . .
constitute[s] the most blatant and deplorable contradiction of academic values . . . .48
President Bollinger echoed the Tobacco Committees emphasis, stating that in the specific area
of financial investment policy, we have decided as an institution to refrain from taking ownership of
organizations whose practices are fundamentally at odds with our own mission of education and
research.49 An excerpt from the Tobacco Committees report is instructive in defining these core
missions:
The core missions of the University, as described in the Universitys mission statement
and bylaws, are: teaching, research, and service. . . . If there is anything that unifies the
three core missions, it is the pursuit and dissemination of truth and knowledge: We
conduct research to find truth and create knowledge; we teach as a means of
disseminating that knowledge, encouraging its pursuit, and installing respect for its
value; and we put that knowledge to public use in various areas of service to the
community.50
47

IPCC, supra n. 42, at 38.

Tobacco Committee, supra n. 13, at 26.
49
Lee Bollinger, Memorandum to the Board of Regents (June 12, 2000) (PDF available upon request).
50
Tobacco Committee, supra n. 13, at 26.
48

12

There can be no doubt that the activities of the coal and oil industries are antithetical to these core
missions in the same way that the tobacco industrys actions were.
The similarities between these industries activities are striking. The similarities are also
unsurprising some of the key players in the tobacco industrys campaign have been central to the coal
and oil industries campaign to undermine the science of climate change. For example, the Heartland
Institute (discussed below) worked with tobacco companies Philip Morris and R.J. Reynolds to cast doubt
on the health effects of tobacco.51 The founder of the George C. Marshall Institute (discussed below),
Frederick Seitz, formerly worked for R.J. Reynolds, where he helped R. J. Reynolds give away $45
million to fund medical research in the 1970s and 1980s, studies that avoided the central health issue of
smoking and served the tobacco industrys purposes.52 Rep. Henry Waxman, who chaired congressional
tobacco hearings in the 1990s, noted in respect to climate change science that [n]ot only are we seeing
the same tactics the tobacco industry used, we're seeing some of the same groups. For example, the
Advancement of Sound Science Coalition was created in 1993 to debunk the dangers of secondhand
smoking before it moved on to global warming.53
Indeed, just as the [Tobacco] Research Council was formed as a public relations front designed
to placate smokers concerns about the health effects of smoking, the coal and oil industries have funded
several front groups to manipulate the publics perception about the burning of fossil fuels and climate
change. We will not attempt to provide an exhaustive list of these groups and the coal and oil companies
that have funded them it would be prohibitively long but we will provide some examples.

51

An internal document from the American Petroleum Institute (API) titled Draft Global
Climate Science Communications Action Plan details a coordinated strategy to ensure that a
majority of the American public . . . recognize that significant uncertainties exist in climate
science, and that both average citizens and media understand (recognize) uncertainties in
climate science to the point that recognition of uncertainties becomes . . . conventional
wisdom. (quotation marks and parentheticals in original). Representatives from Exxon, Chevron,
and other coal and oil related institutions were listed as contributing to the development of the
plan. The $7.9 million plan included a National Media Relations Program, the establishment
of a Global Climate Science Data Center, and National Direct Outreach and Education all
designed to mislead politicians, the media, and the public into believing that uncertainties
surrounding climate change science existed when they did not. One measurement of success for
this effort was listed as the number of school teachers / students reached with our information on
climate science.54

The American Legislative Exchange Councils (ALEC) Energy, Environment and Agriculture

Indeed, to this day, Heartlands website contains a section dedicated to countering the propaganda and
exaggeration of anti-smoking groups. http://heartland.org/policy-documents/welcome-heartlands-smokers-lounge
52
Dennis Hevesi, New York Times, Frederick Seitz (March 6, 2008) (internal quotations marks omitted).
Available at http://www.nytimes.com/2008/03/06/us/06seitz.html?_r=0.
53
Mark Hertsgaard, Vanity Fair, While Washington Slept (May 2006). Available at
http://www.vanityfair.com/politics/features/2006/05/warming200605.
54
Available at http://www.euronet.nl/users/e_wesker/ew@shell/API-prop.html. PDF version available upon request.

13
Task Force drafted model legislation designed to undermine the teaching of the scientific
consensus behind climate change.55 It has been introduced in at least seven states and become the
law in at least three.56 Several coal and oil related entities are (or have been) members of ALEC,
including (but not limited to) American Coalition for Clean Coal Electricity, the API, Marathon
Oil, ExxonMobil, and Shell. Numerous lobbying and public relations organizations with known
coal and oil connections are also members.57

55

The Heartland Institute paid a coal-industry consultant $100,000 to develop classroom modules
that promote climate change science as controversial.58 The Heartland Institute is a leader in the
campaign against climate science.59 Its efforts have been funded by a variety of coal and oil
entities including ExxonMobil, the API, Koch, and the Illinois Coal Association.60

Members of the coal and oil industries led the Orwellian-named Global Climate Coalitions effort
to undermine the scientific consensus behind climate change until it folded in 2002.61

The George C. Marshall Institute, an organization that openly promotes climate change denial,62
has been funded directly by ExxonMobil and indirectly (through other foundations) by other coal
and oil related institutions. Further, its CEO is the former COO of the API and was the Chair of
the Global Climate Coalition.

In 2007, the American Enterprise Institute (AEI) offered to pay scientists to conclude that the
UNs Intergovernmental Panel on Climate Change (IPCC) is resistant to reasonable criticism
and dissent and prone to summary conclusions that are poorly supported by the analytical work.
AEI had received over $1.6 million from ExxonMobil at the time, and the former head of the
company was the vice-chairman of AEIs board of trustees.63

Over the span of a decade, oil and coal corporations paid more than $1 million to fund leading

http://www.alec.org/model-legislation/environmental-literacy-improvement-act/. See also Connor Gibson,

Greenpeace USA, Heartland Institute and ALEC Partner. . . (Mar. 30, 2012). Available at
http://greenpeaceblogs.org/2012/03/30/heartland-institute-and-alec-partner-to-pollute-classroom-science.
56
Steve Horn, DeSmogBlog, ALEC Climate Change Denial Model Bill Passes in Tennessee (March 21, 2012).
Available at http://www.desmogblog.com/alec-climate-change-denial-model-bill-passes-tennessee.
57
http://www.sourcewatch.org/index.php/ALEC_Corporations;
http://www.sourcewatch.org/index.php/Energy,_Environment_and_Agriculture_Task_Force
58
The Heartland Institute, 2012 Fundraising Plan at 18. Available at http://thinkprogress.org/wpcontent/uploads/2012/02/1-15-2012-2012-Fundraising-Plan.pdf. See also Brad Plumer, The Washington Post, Will
your kid . . . blog, (Feb. 23, 2012). Available at http://www.washingtonpost.com/blogs/wonkblog/post/will-yourkid-be-taught-that-climate-change-is-a-hoax/2012/02/22/gIQAp6fFVR_blog.html.
59
Dealing in Doubt, Greenpeace USA, 2013, at 32. Available at http://www.greenpeace.org. See also The Heartland
Institutes May of 2012 press release. Available at http://www.ucsusa.org/assets/documents/global_warming/28Heartland-Institute-Press-Release.pdf
60
http://www.sourcewatch.org/index.php?title=Heartland_Institute#Foundation_funders
61
The Global Climate Coalition folded in response to a national divestment campaign that criticized the group for
deceiving the public about climate change.
62
See e.g., http://marshall.org/climate-change/
63
Ian Sample, The Guardian, Scientists Offered Cash to Dispute Climate Study (Feb. 1, 2007). Available at
http://www.theguardian.com/environment/2007/feb/02/frontpagenews.climatechange.

14
climate change denialist Willie Soons research. These corporations included ExxonMobil, the
API, Koch, and Texaco.64

In more recent years, as public perception of climate change has evolved, funding to undermine
the science of climate change has been funneled anonymously through conduit organizations,
making it difficult to attribute the funding to any particular organization, individual, or industry.65
This is the same strategy that the tobacco industry used.

In 2000, the Tobacco Committee concluded that the actions of the tobacco industry constituted
the most blatant and deplorable contradiction of academic values by a single business or industry in
modern history. It is safe to say that the coal and oil industry-led climate change misinformation
campaign constitutes the most blatant and deplorable contradiction of academic values since the tobacco
industrys campaign. The conduct of both the coal and oil industries, and the tobacco industry, creates
more than trivial academic concerns. It creates academic issues of the utmost concern. These industries
have cloaked themselves with the mantle of scientific legitimacy, for the purpose of economic gain, and at
the expense of the public health and the environment. There can be no question that the practices of the
coal and oil industries are fundamentally at odds with our own mission of education and research.
3. Conclusion of Prong Two
When we realize that climate change has often been called the greatest threat facing our planet,
the phrase antithetical to the core missions of the University seems a profound understatement. This is
particularly the case given the combination of a scientific consensus on the harmful effects of coal and oil
use and the overwhelming evidence of dishonest conduct by the coal and oil industries over many years in
a manner that is directly contradictory to the Universitys most central values. Whats more, the actions
of the coal and oil industries, when coupled with the nature of their products, are especially antithetical to
the missions of this University, given its commitment to teaching, research, and service in the fields of
sustainability and the environment, as well as its operational commitment to sustainability.66

c. Prong Three: Uniquely Responsible67

3) There must be reason to believe that the organization, industry, or entity to be singled
out may be uniquely responsible for the problems identified.

64

John Vidal, The Guardian, Climate Skeptic Willie Soon Received $1m from Oil Companies, Paper Show (June
28, 2011). Available at http://www.theguardian.com/environment/2011/jun/28/climate-change-sceptic-willie-soon.
65
E.g., Robert J. Brulle, Climatic Change Journal, Institutionalizing Delay (Dec. 2013). Available at
http://www.drexel.edu/~/media/Files/now/pdfs/Institutionalizing%20Delay%20-%20Climatic%20Change.ashx.
65
Suzanne Goldberg, The Guardian, How Donors Trust Distributed Millions to Anti-Climate Groups (Feb. 14,
2013). Available at http://www.theguardian.com/environment/2013/feb/14/donors-trust-funding-climate-denialnetworks.
66
C.f., Tobacco Committee, supra n. 13, at 26-27.
67
David Marvin, PhD, Ecology and Evolutionary Biology, University of Michigan 14.

15
The increase in atmospheric CO2 levels over the last 260 years is not a natural phenomenon. Each
molecule of CO2 has a unique chemical signature that can be used to identify its source. CO2 released
from fossil fuels has a different chemical signature compared to that released naturally from soils,
decaying organic matter, and volcanoes. Scientists are able to make measurements and determine how
much CO2 comes from both fossil fuel burning and natural sources. Through these measurements we
know that the rise in CO2 levels is primarily due to the burning of fossil fuels.68
We have emitted 1,351 billion tons of CO2 from burning fossil fuels since 1751,69 with a resulting
40% increase in atmospheric CO2 concentrations worldwide.70 This additional CO2 traps more radiation
from the sun in the form of heat, and has led to a global temperature increase of 1.5F since 1880.71
Thousands of studies have all reached the same conclusion: this increase in global temperature has
already begun, and will continue, to have major consequences for our climate system. 72 Scientists have
calculated that we have ~1,000 billion tons of CO2 that we can emit before we cross a threshold CO2
concentration after which we risk a high probability of extremely dangerous changes to our climate
system.73 Burning the remaining reserves of fossil fuels the core of the fossil fuel industrys business
model will emit ~2,800 billion tons of CO2, far exceeding this threshold.74
Coal, oil, natural gas, and their energy related derivatives are the specific sources of fossil fuel
emissions. However, not all fossil fuels are created equal: a full 83% of the CO2 emissions ever emitted
by burning fossil fuels come from just coal and oil.75 Just as bad, coal and oil emit far more CO2 per unit
of energy produced than natural gas (82% and 40% more, respectively).76 In other words, coal and oil
have, and will continue to be, far and away the primary drivers of climate change.
The especially dangerous nature of the products that the coal and oil industries extract and sell is
not alone in making them uniquely responsible for climate change. The industries sustained campaign
through attempts to discredit the established science of climate change,77 lobbying, and making political
contributions to stop legislative action addressing climate change also make them uniquely responsible.
First, the actions discussed in Section III(b)(2), above, have created a sense of uncertainty around the
science (one that is entirely unfounded78) that has caused much of the public and many elected officials to
believe that climate change does not pose a risk or that the risks are uncertain.
Second, the industries campaign to create uncertainty has been complemented by their funding
68

Manning & Keeling., Tellus 58, 95 (2006).

Carbon Dioxide Information and Analysis Center (CDIAC), Global Fossil Fuel CO2 Emissions. Available at
http://cdiac.esd.ornl.gov/trends/emis/tre_glob_2010.html.
70
IPCC, supra n. 42, at 38.
71
Id.
72
Id.
73
Rockstrom et al., Nature 461, 472 (2009).
74
Meinhausen et al., Nature 458, 1158 (2009).
75
CDIAC, Global Carbon Budget, http://cdiac.ornl.gov/GCP
76
Emissions factors for coal, oil, and natural gas are 96.4, 74.1, and 53.0 kg CO 2 per million BTUs.
http://www.theclimateregistry.org/downloads/2012/01/2012-Climate-Registry-Default-Emissions-Factors.pdf.
77
See Section III(b)(2).
78
E.g., IPCC, supra n. 42, at 38.
69

16
of pro-fossil fuel lobbyists and contributions to policymakers to prevent climate change legislation. For
example, over the spans of their political careers, the current members of Congress have received nearly
$73 million from the oil industry and nearly $47 million from the coal industry. This includes over $11
million since the last election cycle alone.79 To the benefit of the industries bottom lines, and to the
detriment of the climate, these contributions have been extremely effective in preventing action on
climate change. Since 2005, 73% of votes on energy legislation were decided in favor of the fossil fuel
industry.80 Moreover, the U.S. is one of only six of the top sixty-six polluting countries that has not
passed flagship climate change legislation in the past 50 years.81 Unsurprisingly, the other five countries
all have powerful coal and/or oil industries as well.82
In sum, the coal and oil industries extract and sell the raw materials that primarily cause climate
change. In addition, the industries have aggressively battled to sustain global dependence on their
products, hindering progress on addressing climate change. It is this combination of the industries role in
causing climate change and preventing progress on addressing climate change that makes them uniquely
responsible.
IV. Common Misconceptions
Having shown that an ad hoc committee on coal and oil investments is commanded by the
precedent, in this section we address some common misconceptions about divestment. Before addressing
the misconceptions, it is important to reemphasize that considering the merits of divestment in general is,
at this stage of the divestment process, premature. Rather, the merits of divestment are for the ad hoc
committee to factor in making their recommendation to the Regents. Nonetheless, we address these
misconceptions here because doing so strengthens many of the points made above.
a. The Hypocrisy Misconception
One common misconception is that the Universitys operational reliance on coal and oil makes it
hypocritical to even consider divesting from these industries. This viewpoint lacks validity for three
primary reasons. First, the University is actively trying to minimize its dependence on coal and oil. The
tens-of-millions of dollars the University has committed to this pursuit show that the status quo is
unacceptable; that maintaining the status quo would be hypocritical given the core values of the
University. This observation alone collapses the logic of the hypocrisy argument. Since maintaining the
operational status quo would be antithetical to the Universitys core values, it makes little sense to
conclude that a parallel change in our financial operations would be hypocritical. On the contrary, not
divesting would be hypocritical because it would exempt the management of the endowment from the
values that we hold the rest of the University to.
79

Report from Oil Change International based on data provided by the Center for Responsive Politics. Available for
download at http://dirtyenergymoney.com/analysis.
80
Report from Oil Change International based on data provided by the Center for Responsive Politics. Available at
http://dirtyenergymoney.com/votes.
81
The GLOBE Climate Legislation Study, 4th Edition (2014). Available at
http://www.globeinternational.org/pdfviewer. Notably, the flagship legislation passed by the U.S. in 1963 was the
Clean Air Act, a law not originally concerned with climate change.
82
Id. at 9 (Canada, Saudi Arabia, United Arab Emirates, and Venezuela).

17

The second reason to dismiss this argument is that the optional utilization of coal and oil for
financial gain is fundamentally different from the necessary utilization of those fossil fuels in operations.
Unlike the supply of energy that is available for use, the University has complete autonomy over its
investments. There is a choice to be made. As the Apartheid Committee explained, by investing in a firm
the University must accept some responsibility for the political and social implications of a companys
activities.83 This is so precisely because investments constitute a choice; a choice not practically
available for our supply of energy. This choice places a level of responsibility on the University for the
political and social implications of its investments.
As far as operational choices do exist though, the University does bear their social implications.
In this light, the University has set goals to reduce its operational reliance on coal and oil as much as is
practically possible.84 It took this action in part because it recognized the social implications of
maintaining its operational status quo. It cannot then be hypocritical for it to recognize the parallel
implications of maintaining the status quo of its investment choices.
Third, that the University as society more broadly is so reliant on coal and oil for energy is (in
part) precisely the point. We have known of the devastating effects of climate change for decades, but
progress in addressing the issue has been forestalled by the efforts of the oil and coal industries to
perpetuate reliance on their products.
b. The Empty Gesture Misconception
Another misconception is that divestment would be nothing but an empty gesture, devoid of any
effect. This viewpoint ultimately lacks merit. First, the Universitys history of divestment renders this
argument effectively moot. The Universitys past decisions to divest reflect an institutional view that
divestment is a meaningful action. Given the significant impacts of its past divestment movements, this
view is hardly surprising.
Second, the practical effect of institutionalizing the stance that divestment in general is not
meaningful is striking. This viewpoint would permit any investment, even when it compromises the
Universitys core mission and values. This stance would in turn render our core mission and values
nothing but an empty gesture. Moreover, it is a viewpoint that in a way belittles the University by
declaring that its actions are devoid of effect. Given the Universitys position as the preeminent public
university in the United States, that view defies reality.
Third, divestment has clear purposes reflected throughout the Universitys precedent on the topic.
Primarily, the purpose is to make a value statement.85 Making a value statement has important internal
and external implications. It communicates to the University community and to the public that the
University is committed to fulfilling its core missions and values; that the investments in question are
83

Apartheid Committee, supra n. 9, at 13.

We'll do a better job, because we must. Coleman Address, supra n. 6.
85
To be clear, this is not a political statement the University is not taking a political stance on a political issue. It is
instead a value statement regarding the Universitys core missions and values.
84

18
inappropriate given those core missions and values. In other words, divestment, when appropriate, is a
necessary step to adhere to the constitution of University.86
c. The Financial Risk Misconception
Like the two misconceptions discussed above, whether, and to what extent, divestment involves
financial risk is properly left as a factor to be evaluated by a divestment committee. Unlike the
misconceptions above, this argument is generally not without merit; financial risk is a factor in the
divestment process. Nonetheless, it is of little consequence with regard to our specific request. An
analogy to the Universitys operational policy regarding greenhouse gas emissions demonstrates this
point.
As discussed above, the University cannot immediately and entirely cease relying on greenhouse
gas emitting sources of energy. It would be economically, financially, and operationally implausible.
However, it is committed to minimizing its reliance on such forms of energy as much as possible, in order
to fulfill its core value of sustainability. This change in operational policy requires significant financial
and economic commitment. But it does not require a commitment so large that it threatens the
Universitys other core values and missions.
When juxtaposed with the alternatives of maintaining the status quo or completely divesting from
all fossil fuel investments, divesting only from coal and oil constitutes a decision that corresponds with
the Universitys operational policy. Maintaining the status quo compromises the Universitys core value
of sustainability, while completely divesting poses risks to the Universitys other core values and
missions. Divesting from coal and oil (and doing so over time or while applying limiting principles that
can be established by the Committee) strikes the appropriate balance: it helps fulfill the Universitys
sustainability core value without causing financial risk to its other core values and missions.
d. Line Drawing Issues
Once the standard for forming an ad hoc committee is met as it is here detailed considerations
such as which specific companies warrant divestiture are properly left for the Committee to decide upon a
thorough evaluation of the issues. Nonetheless, two types of line drawing problems are worth addressing,
and dismissing, in order to strengthen support for the creation of a committee. First, that there are some
utilitarian benefits to oil and coal does not mean that we shouldnt divest from oil and coal companies.
Second, that many oil and coal companies are large conglomerates with a variety of businesses does not
mean that we shouldnt divest from them. Comparison to tobacco divestment helps to explain why both
arguments are red herrings.
With both tobacco and oil and coal, the purpose of divestment is / was not to eliminate the
industries from our national economy completely. This is so, in part, because from a utilitarian
perspective, tobacco, coal, and oil, all have some measure of social benefit. For all three, that benefit is
outweighed by its negative externalities upon some measure of prolonged use. The enjoyment of an
occasional cigar may outweigh its negative health effects. Similarly, there is a level of reliance on coal
86

By constitution of the University we mean the structure, composition, and principles of the University.

19
and oil at which its benefits outweigh its serious externalities. However, like with tobacco (both currently
and at the time of divestment) no reasonable assessment of the status quo could conclude that that level
has even remotely been met. Extending the comparison further, the status quo is / was the direct result of
industry conduct in both cases. The status quo was established and preserved for far too long by industry
lobbying, undermining science, and manipulating public opinion.
Regarding the latter argument, several of the largest tobacco companies were conglomerates that
functioned in several sectors of the economy. Yet, we still divested. Moreover, several companies such
as those which sell cigarettes at their stores participated in the tobacco industry in a more indirect
manner. Regarding this latter group, the Tobacco Committee was able to draw a line to define, in
principle, what set of companies we should divest from. A committee on oil and coal investments will be
faced with a similar task. Their task, however, is made slightly more complex by the fact that a subset of
oil and coal companies operates subsidiaries in solar or wind energy. As with other issues, the Committee
will have to draw a line or establish a principle to determine when and whether to divest from these
companies. For example, the Committee could ask what the primary business of the company is, how
large their oil or coal operation is (independent of their other business areas), or may decide that any
operations in oil or coal is enough to warrant divestment.
e. The Slippery Slope Misconception
Another misconception is that forming an ad hoc committee on coal and oil investments would
create a slippery slope, resulting in the creation of many other divestment committees. As we have
discussed throughout this proposal, the University has established a specific process and a precedent for
divestment. They have done so specifically to protect the endowment from frivolous divestment efforts,
ensuring that it is generally utilized for its primary purpose of maximizing returns with limited risk. When
the standards have been met, the Regents should not refrain from creating a divestment committee for fear
of a slippery slope. The protections already in place ensure that the slope is not slippery.
f.

The Hiring and Funding Misconception

A final misconception is that divestment from coal and oil is somehow inappropriate because
those companies may hire University of Michigan graduates and grant the University research funding. If
this viewpoint has any basis in reality then it is a further indictment on the respective industries.
Companies hire University of Michigan students because they are intelligent, educated, and well-prepared
for the work force. They grant the University research funding because its researchers are among the best
and brightest in the world. They do not hire the Universitys students and fund its research because the
University owns their stock or finances their debt. If a company feels otherwise, then that is an indictment
on its academic values an indictment which should cause reflection on how investing in such a company
accords with the Universitys values. Moreover, any company that threatens to stonewall Michigan
graduates or avoid funding its research upon divestment would face grave public backlash, rendering such
actions implausible.

20
V. Conclusion
Climate change is the greatest challenge of our times, and will remain so for generations to
come. Reversing its course demands leadership. The University of Michigan, as a preeminent public
University, has twice taken the lead on divestment efforts when one of its investments involved such
significant social or moral implications . . . that normal investment practices should be altered. And in
both cases, divestment led to important changes within the respective industries. The coal and oil
industries as the primary drivers of climate change and the misinformation campaign that has paralyzed
steps to counteract it are investments that meet this standard.
In this light, and consistent with the Universitys process and precedent, LSSE requests that the
Regents form a committee to determine whether the University should divest its endowment from coal
and oil investments. LSSE is not demanding that the University immediately divest from these funds.
Rather, we are requesting that the Regents form a committee to consider whether divestment is
appropriate, and how to divest in the most fiscally responsible manner.
As stated throughout, LSSE recognizes that forming a committee is a serious action that should
not be called for lightly. We also recognize that addressing climate change is a challenge to which there is
no silver bullet. But simply because solutions are complex and involve difficult decisions does not mean
that the University should take no action at all. In fact, when the Universitys core values are so directly
implicated, its standards demand the opposite.
After thoroughly studying the Apartheid and Tobacco Committees decisions, the CFOs
directive, and the Universitys current steps to combat climate change, LSSE is confident that its request
is the only option that is consistent with the Universitys process, precedent, and core values.