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Barnard College has decided on a set of criteria it will use as it attempts to divest its endowment from companies that dispute climate science and climate change, it said Tuesday.

The announcement comes about a year after a Barnard task force recommended the college divest from fossil fuel companies that deny climate science or that try to undermine efforts to mitigate climate change. That recommendation was considered a new way to respond to divestment campaigns asking colleges and universities to keep their endowments from investing in fossil fuel companies. It was arguably a way for Barnard to divest from objectionable companies while still giving the college flexibility to invest in energy companies as it sought to maximize returns for its endowment.

But Barnard’s plan left much work to be done. It wasn’t clear what criteria the college would use to determine which companies were not worthy of its money. While a report issued last year suggested some criteria, they were not final.

The new criteria announced Tuesday were developed over several months by an internal divestment working group. They require asking the following six questions about investment options:

  • What is the company’s position on climate change?
  • What action is the company taking to reduce its carbon footprint?
  • Is climate science integral to the governance and oversight of the company?
  • What are the company’s affiliations with third parties that spread disinformation on climate science?
  • Does the company publicly support the need for climate policies and regulations?
  • Has the company been publicly transparent about their position, actions and affiliations with regard to climate science and climate change?

The ideas are largely consistent with criteria suggested in last year’s report despite some changes to specifics, said Robert Goldberg, Barnard’s chief operating officer, who chaired the college’s task force to examine disinvestment and served as its interim president last year. That report’s suggested criteria included examining whether a company made accurate and consistent public statements, whether it is affiliated with industry groups that spread misinformation, and whether it is committed to reducing net emissions.

Companies’ climate denial isn’t necessarily overt anymore, Goldberg said. Realizing that, the college’s working group tried to find a way that would best inform investment decisions.

“We needed to understand a total of company behavior around climate change and how that was consistent with our mission,” he said. “It’s really a lot about support for science and the kind of behavior these companies are exhibiting in this area.”

There is still work to be done before the criteria translate into actual investment decisions. Barnard considered developing a scoring system in-house but decided outside experts would have better access to data, have more expertise and lend the effort more credibility. So the college is turning to Fossil Free Indexes, a research and advisory firm, to refine the criteria and develop a scoring method. Fossil Free Indexes previously developed a list known as the Carbon Underground 200 to be used as a standard for divesting from fossil fuels.

The firm will use the expertise of the Union of Concerned Scientists to help it create a climate action list for Barnard. It will be vetting a set of oil and gas companies on the Carbon Underground 200 list.

The goal is for Barnard to be able to view a list scoring different companies. Leaders will then be able to decide where they want to draw a line -- which scores are acceptable for investment and which are not.

“Our efforts will enable Barnard to take a nuanced and thoughtful approach to the divestment question consistent with the college’s values,” Christopher Ito, CEO of Fossil Free Indexes, said in a statement.

Leaders have pointed out that they aren’t just penalizing companies that they feel behave badly. They would be rewarding companies judged to be responsible actors.

“Differentiating between companies is, in some ways, a more powerful way of ultimately changing behavior than a blanket divestment from the whole industry,” Goldberg said.

Barnard plans to release its climate action list publicly this spring. The college also plans to release information that colleges and universities can use to decide whether a company should or should not receive investments.

The idea that Barnard can serve as a leader in a new type of divestment movement is important. Many experts are skeptical about whether any one institution can have a direct effect on the fossil fuel industry through its investment decisions. A quick look at Barnard makes clear why.

Barnard’s endowment is considerable for a women’s college with about 2,500 undergraduates that is affiliated with Columbia University. But at $327.2 million, the college’s endowment is only a small fraction of the size of ExxonMobil’s $351.2 billion market capitalization. And Barnard’s endowment is not entirely invested in fossil fuels, let alone one single fossil fuel company. About 6 percent of its endowment portfolio is exposed to fossil fuel investments.

In other words, Barnard isn’t going to move markets on its own, even if it dumps all of its shares of a specific company tomorrow.

What the college can do is give institutions and consumers a way to evaluate their investments and spending.

“Ultimately, it’s very hard to affect the bottom line of the companies, but if you carry our approach out to a number of degrees, this could send signals, which could change consumer behavior,” Goldberg said. “I know that’s aspirational. But the theory around the approach we’re taking is to send some signals around positive actors and less positive actors.”

Oil and gas producers have argued that divesting from fossil fuels can be costly for endowments. A report issued this spring by the Independent Petroleum Association of America argued divesting would cut endowment spending by more than 15 percent on average. Environmental advocates disputed that idea, saying that fossil-free indexes can outperform stocks of oil, gas and coal companies.

Divestment advocates voiced support for Barnard’s newly announced criteria Tuesday.

“The original purpose of the divestment campaign when it launched in 2012 was to stigmatize the fossil fuel industry and force our institutions to choose a side,” said Lindsay Meiman, U.S. communications coordinator for the group “To see an institution like Barnard recognizing climate denial and the deception of these companies is truly a testament to the power that people around the world have built in questioning the role of the fossil fuel economy and the role and responsibility that our institutions have to author the transition away from fossil fuels.”

Meiman did have some questions about the criteria, however. She wondered whether a bullet could be added about lobbying -- one that would measure whether companies contributed to political candidates who deny man-made climate change. She also pointed out that companies can take a particular public stance while privately acting irresponsibly or sowing misinformation.

Criteria involving lobbying were considered, Goldberg said. But the criterion dealing with third-party affiliations would cover trade organizations and associations that could engage in some of the behavior a look at lobbying would examine. And criteria could be added in the future, because the scoring system is meant to be a living, updated resource.

“We felt that was a bridge too far for this particular exercise,” Goldberg said. “I wouldn’t rule it out down the road as we get more refined and better at this.”

Barnard has taken several other steps to reach the point where it could make Tuesday’s announcement. The college’s endowment had for years been pooled in a consortium, preventing it from excluding specific investments. In September it named a new outsourced chief investment office without the consortium limitations, allowing it to tailor investments.

Its Board of Trustees also had to approve the divestment plan. It did so in March.

Meanwhile, others are hoping the ideas applied in Barnard’s divestment decisions can be applied elsewhere. Sandra Goldmark is an associate professor of professional practice in theater and the director of sustainability and environment at Barnard. She is also a member of the college’s task force to examine divestment.

She noted the institutional tension between sustainability and needing to function. Some could see a slippery slope from divesting from fossil fuel companies and not being able to buy food, clothing and computers because of their impact on natural resources and the environment. Goldmark believes balance between immediate needs, long-term principles and impetus for change can be found.

“If we take a position that tries to leverage every action that we do take, I think we can apply this logic to a lot of things we do as individuals and an institution,” she said.

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