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Coming Clean 

Environmental group targets Stanford investment muscle

Wednesday, Apr 7 1999
Fresh off organizing campaigns at two other universities, a national environmental group is hoping Stanford University will be the next incubator for its nationwide campaign to breed social activism among large, institutional investors.

Ozone Action, a Washington, D.C.-based nonprofit, opened a San Francisco office in February, and is lobbying Stanford students and faculty to join its call for the university to use its financial muscle to sway the environmental practices of large corporations.

With an endowment of about $4.7 billion -- the fifth largest of the nation's private universities -- Stanford holds stock in 2,000 to 3,000 companies at any given time, including stakes in some of the world's largest companies.

Instead of arguing that large investors like Stanford should sell off certain stocks, Ozone Action is trying to convince them to make use of their shareholder clout by prodding corporations -- particularly oil companies -- into improving their environmental performance.

After warm receptions at the University of Washington and Harvard, Ozone Action decided to target Stanford because the school has a good track record when it comes to progressive politics and investment decisions.

"The reason why we chose Stanford is because they have a history of divesting from corporations that are socially irresponsible," says Leila Salazar, a local Ozone Action field organizer. Stanford held extensive discussions with corporations doing business with apartheid South Africa throughout the 1970s and '80s and eventually divested stock in them, Salazar notes.

More than two dozen professors and 800 students have already signed petitions circulated by Ozone organizers, and several prominent faculty members have signed on to the cause. The Stanford student body is to vote April 7 on a symbolic resolution endorsing Ozone Action's primary goal.

Ozone Action specifically wants Stanford to start pressuring corporations that are members of the Global Climate Coalition, an industry lobbying group funded by big mining, auto, utility, and oil interests.

The GCC, Ozone Action argues, is trying to mislead the public about the causes and perils of global warming. The coalition funds an ongoing, multimillion-dollar "misinformation campaign" to discredit mainstream scientific consensus on the effects of global warming, Ozone Action argues.

Prevailing scientific knowledge holds that there is enough circumstantial evidence to suggest that human activities, especially things like burning fossil fuels, cause global warming, which could ultimately spell doom for the planet.

In its public information campaigns, however, the GCC argues that there is insufficient evidence to show that humans cause global warming, or even if the warming is really occurring. The coalition has also drawn fire for opposing international treaties aimed at reducing greenhouse gases, in particular the Kyoto Protocol.

The activists want investors like Stanford to demand meetings with companies that belong to the GCC and express their disdain for the coalition's tactics. Ozone Action also urges investors to use annual corporate meetings to press shareholder resolutions on environmental and social issues, like increasing research into alternative fuels.

If all else fails, Stanford should then divest stock in corporations that belong to the GCC, the activists argue.

The university currently holds stocks in four GCC member firms -- Texaco, Exxon, Mobil, and General Motors -- but will not disclose how many shares.

Donald Kennedy, a former Stanford president and environmental science professor, made his disgust with the GCC public in a recent, strongly worded letter to the university community in the Stanford Daily.

"As environmental scientists we find ourselves increasingly troubled by the claims and activities of corporations who are members of the Global Climate Coalition," Kennedy wrote. "This deceptively-named organization has spent millions of dollars in lobbying and advertising against the ratification of the Kyoto Protocol, and it has deliberately misinformed the public about the overwhelming scientific consensus regarding global warming."

The letter was also signed by Paul Ehrlich, a noted Stanford population studies professor who wrote Population Bomb, and Stephen Schneider, a biological sciences professor and author of a dozen books on climate change.

The GCC, whose slogan is "A voice for business in the global warming debate," concedes that it is funded by industry groups with a vital financial interest in shaping environmental policies, and especially in defeating the Kyoto Protocol.

"We know that if we follow the Kyoto Protocol, there will be economic problems," says GCC spokesman Frank Maisano. Maisano argues that GCC members are among the leading bulls of Wall Street, and that drastic emission-reduction mandates such as those called for by the Kyoto Protocol could "jeopardize" jobs and the nation's economic welfare.

Maisano also takes exception to the argument that the GCC is trying to mislead the public about global warming. "There is tremendous uncertainty [about global warming]," he insists. "There is a tremendous amount of information we need to know about this before we say this is the fault of what we are doing."

Not so, says Schneider, who is actively involved with the Intergovernmental Panel on Climate Change (IPCC), an international scientific body composed of credentialed climate scientists from around the world that is dedicated to advancing knowledge on climate change.

Schneider points out that, back in 1995, more than 2,000 IPCC-affiliated scientists agreed that "the balance of evidence suggests that there is a discernible human influence on global climate" -- a conclusion that warrants steps to reduce greenhouse gas emissions.

But despite that scientific consensus, he says, the GCC is spending big public relations dollars holding press conferences, writing faxes, and sending out press releases to convince the public otherwise.

While acknowledging that scientists are not 100 percent certain about the cause and effect of global warming, he argues that to wait for absolute certainty is "a gamble we cannot afford."

Those are the views Ozone Action would like to see Stanford start carrying into the boardrooms of the nation's major corporations.

The current campaign is only the latest grass-roots effort aimed at Stanford's investing practices. If history is any indication, its chances appear good.

In the early 1970s, Stanford became one of the first universities to adopt a statement on investment responsibility that emphasized a balance between financial health and ethics. Stanford defines investment responsibility as "fulfilling fiduciary responsibilities while giving independent consideration to allegations of substantial social injury by companies in which the university invests."

At that time, the school also founded the Advisory Panel on Investment Responsibility, which is made up of students, faculty, and school administrators. The Board of Trustees established a Special Committee on Investment Responsibility.

Both of the groups consider social issues, such as human rights violations and environmental degradation, involving companies Stanford invests in, and recommend shareholder actions the university can take.

Mary Kimball, Stanford's investment responsibility officer who sits on the advisory panel, said that she would bring up Kennedy's open letter in the next panel meeting.

Student representatives on the advisory panel are collaborating with Ozone field organizers to obtain information on the number of shares Stanford holds in each of the four GCC member firms in which it invests.

Ozone Action's campaign is clearly still getting started, and there are no earth-shattering results as yet. At the University of Washington, the student government recently passed a resolution calling for the university to divest stock in GCC members, but that has not happened. Harvard student leaders have proposed a similar resolution, but the idea has not yet been voted on by the student body. Still, Ozone Action's Salazar says, "we are making great headway. We are going to continue to work on other college campuses.

About The Author

Helen Gao


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