Williams investment practices and climate change

Dear Williams community,

Over the last several months, I have received some questions regarding Williams’ investment strategy as it relates to fossil fuels. This letter seeks to clarify our current policies and approach to this issue.

The climate crisis facing our globe is a galvanizing concern for this campus. As our Strategic Plan emphasizes: “Reducing greenhouse gas emissions will require a fundamental shift in the world’s approach to technology, resource use, international cooperation, inequality and social justice, and decisions about consumption, production and transportation. As a leading liberal arts college, Williams has a responsibility to confront these challenges through our teaching, research and actions.”

The strategic plan identifies six key areas through which Williams is seeking to increase its commitment to sustainability: Education and Research; Climate Action; Buildings, Landscaping and Land Use; Responsible Consumption; Community, Diversity, Equity and Inclusion; and Accountability and Transparency. The Provost’s annual updates on our progress in all of these areas continues to provide our community with an accounting of the great work we are doing and the significant work that is left to be done. If you have not done so, I urge you to read Provost Love’s October letter documenting these efforts.

Williams’ investment strategies have also sought to grapple with the climate crisis. Notably and most importantly, Williams led the higher education sector in 2015 when we launched a dedicated program to invest in funds that invest in renewable energy and the transition from traditional sources of energy to carbon-free producers of energy. In the last six years, Williams has committed $50 million into these funds and we continue to dedicate significant time and resources to exploring opportunities in this arena.

Regarding other college investments: Williams has not had direct investments in fossil fuel companies of any kind for many years. Indeed, Williams has no direct investments at all. Rather, the endowment is invested in funds that then invest in public and private companies. Through such “indirect investments”, Williams currently has approximately 4% invested in real asset funds, some of which are in projects related to fossil fuels. The College has not made any new investments in these funds since 2019 and this past fall, as part of its regular business to direct the College’s investment strategy, the Board of Trustees’ Investment Committee committed to maintaining that strategy going forward, which means there will be no new investments in funds engaged in oil and gas extraction. Our remaining investments in current funds will thus phase out over time, a process that we anticipate will be complete by 2033, once these partnerships are liquidated. As such, Williams’ investment policies are similar to those of peer schools that have announced comparable plans.

Until now, I have been reluctant to write a letter announcing such changes to the portfolio both because the process we and other schools have launched will take years to complete, and because I am skeptical that these changes or a statement about them will have any direct impact on the climate crisis. As long as the globe relies on carbon based sources of energy, companies will continue to produce fossil fuels and investors will continue to supply resources to those companies, even while we and many of our peer institutions do not. Our impact investment work, in contrast, which Williams has proudly promoted, continues to provide resources to those working to create innovative solutions to this immense global problem.

In closing, it is worth stressing that insofar as Williams can have a real impact on addressing the climate issues our society faces, we can do so most effectively through our ongoing commitment to research and education, which provides students and scholars with the tools they need to advocate for sustainable change, as well as in our efforts to reduce travel emissions and to move our campus away from its reliance on fossil fuels for heating and cooling our buildings, the two largest sources of our own contributions to unsustainable living. Both of these projects require a significant investment of funds and a broad commitment from each of us to change personal practices and behaviors. Such changes are never easy but the more individuals and institutions grapple with their own carbon footprint and diminish their reliance on carbon-based fuel sources, the more likely we will have a positive impact.

I hope this clarifies questions about college investment strategies in this arena.