March 28, 2019

To: Committee on Investments and Social Responsibility

From: Students of GU Fossil Free

Memorandum on the Proposed Strategy of Fossil Fuel Divestment

Our Strategy: Do No Harm and Lean to the Positive

First and foremost, thank you again for your willingness to engage and contribute your insights
in regards to GU Fossil Free’s most recent proposal. We have taken a hard look at the specifics
of our proposed strategy and methodology as a result of this conversation, and, in addition to
answering your questions, would like to elaborate on the potential for divestment from fossil
fuels over a five-year timeline with engagement.
As posited by our full proposal, climate change is both an immediate social and
environmental threat as well as an existential one. As the Committee recognized during our
March 20 meeting, we must align our endowment with the Catholic value of care for our
common home, and in particular by opposing climate change and the companies that contribute
to it. However, we must also recognize the potential for energy firms to progressively transform
their business models to be more sustainable. Not only is such a shift to clean energy from fossil
fuels possible, but Georgetown and its peer institutions have a unique role to encourage such a
transition. The ​Socially Responsible Investing Policy​ suggests that “...[I]​n rare cases, the Board
may choose to lead or join with others in a public campaign when deemed to be necessary to
promote the University’s principles and values.” This five-year process of divestment presents
such a rare opportunity to lead higher education institutions in promoting our principles and
values of environmental stewardship and corporate responsibility.

Process: Step-by-Step Outline

As a reminder, our January proposal advocated that Georgetown University should (1)
immediately freeze all new direct investments in fossil fuel companies and (2) completely divest

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its Endowment Fund from all fossil fuel companies by January 1, 2024. We would now like to
elaborate on the steps of this five-year timeline.
1. Georgetown University should immediately freeze all new direct investments in fossil
fuel companies, as defined below. Georgetown University should immediately develop
process of evaluating whether these companies in which it has direct, indirect, and/or
commingled investments meet a set of “Clean Energy Standards,” as outlined below.
2. If a company does not meet the Clean Energy Standards, a “Clean Energy Standards
Working Group,” composed of CISR members, GU Fossil Free members, members of
the Investment Office, and members of the Georgetown community, should engage with
the company in question by submitting shareholder resolutions. The resolutions would
allow for Georgetown to advocate for the alignment of its investments with its values
through the Clean Energy Standards.
3. If the shareholder resolutions do not pass and/or the company management does not
accept the resolution, Georgetown University will divest its direct, indirect, and/or
commingled funds from the company.
4. By 2024, all fossil fuel companies in which Georgetown University is invested would,
therefore, have adopted the Clean Energy Standards—and Georgetown University would
have divested from any companies not adhering to the standards, with the potential to
renew investments should they adopt the Clean Energy Standards.

Defining Key Terms

We define​ “fossil fuel companies”​ as any company whose business involves the extraction,
and/or processing of fossil fuels, including all forms of coal, petroleum, and natural gas—this
therefore implies primarily upstream companies. If a company has any involvement in these
processes, they must be subject to the Clean Energy Standards. However, if only a minor portion
of the company is based on these processes, they would very likely be following these standards,
and would be unlikely candidates for divestment.

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Defining Clean Energy Standards
The divestment strategy outlined above hinges on the establishment of Clean Energy Standards
for fossil fuel companies. These standards are intended to reward companies that foster a
forward-thinking vision of their business model that accounts for the destruction associated with
climate change and the need for global transitions from fossil fuels to clean energy. Because they
are different industries, the standards differ for fossil fuel companies. They are as follows:
1. Fossil fuel companies: These standards were established in accordance with the methodology
of the Union of Concerned Scientists’ ​Climate Accountability Scorecard​. The goal of the
Scorecard is strikingly similar to that of our divestment strategy: to take stock of which
companies are truly acknowledging, and acting upon, the realities of climate change. The
methodology is divided into four criteria:
A. Renunciation of Disinformation on Climate Science and Policy:​ The firm’s public
statements should be scientifically accurate.
B. Planning for a World Free from Carbon Pollution:​ The firm should publicly support
the agreements finalized in the Paris Climate Agreement, and instate a company-wide
plan over twenty years to adhere to the Agreement’s goal of preventing global
temperature rise below 2​°C.
C. Support for Fair and Effective Climate Policies: ​The firm should make a good faith
effort to engage in the formation of government policies that reduce carbon emissions.
D. Full Disclosure of Climate Risks: ​The firm should routinely disclose material,
regulatory, physical, and indirect risks and opportunities related to climate change, as per
the US Securities and Exchange Commission.
More details about these criteria and their indicators are included in the UCS document, and can
be further developed by the Clean Energy Standards Working Group.

The Potential for a Higher Education Coalition

This plan operates on the basis of Georgetown negotiating these terms from a shareholder
position. As a minority shareholder in the vast majority of its holdings, such negotiation would
be largely symbolic, though in line with our Jesuit ideals of leaning into the positive.

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 If these efforts were to be undersigned by multiple universities, however, it would be
possible to carve out a unique space for educational institutions to meaningfully engage with
fossil fuels companies. Just as we, as students, recognize our responsibility to advocate for a
sustainable endowment, this strategy underscores the parallel responsibility of educational
institutions to engage as shareholders. Other universities, including ​Harvard University​, have
recently frozen their endowments from direct investments in fossil fuels, and as such, many
institutions are at a standstill while deciding their next steps. This is a unique moment to invite
peer higher education institutions to join us in negotiating with companies in which we share a
stakeholder position, a strategy that harkens back to universities’ mass divestment from
Apartheid in South Africa.
Proving the strategy’s viability, however, would be no small feat. It depends on
Georgetown demonstrating its leadership onto this five-year pledge. We would then invite the
collaboration of peer universities and are open to their membership in the Clean Energy
Standards Working Group.

Conclusion: Reinvestment and the Role of GU Fossil Free

Ultimately, our vision of the endowment is one of moral coherence and environmental
leadership, free of investments in companies that lack the foresight to prepare for climate change.
But Georgetown’s financial role in environmental protection should extend beyond pure
divestment. We are heartened by the Investment Office’s existing efforts to reinvest strategically
in renewable energy, and we encourage CISR to affirm this after the process of engagement and
divestment is completed in 2024. This approach will allow Georgetown to enable the
development of transformative technologies by providing the early capital it takes to produce
them at scale.
We intend to be involved, both throughout the divestment and engagement process and in
reinvestment in sustainable energy projects. In addition to select members of GU Fossil Free
sitting on the Clean Energy Standards Working Group, our younger members may be able to
intern in the Investments Office to contribute to these projects. Our end goal would be the
long-term exploration and recommendation of sustainable impact projects, to ensure that

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Georgetown’s commitment to environmental protection endures with innovation and resolve for
years to come.