Open Divestment Letter to Board of Trustees and Response

Posted on April 11th, 2021 by

*Edited 4/27/21 to include a response from the President and the Board of Trustees received on 4/22/21. This response can be found linked at the bottom of this blog post.*


Several Gustavus students have renewed an ongoing divestment campaign that has had a long and dynamic history on campus. With concern for how the College is financially supporting socially unjust investments such as those that fuel our climate crisis, they are seeking a commitment of reinvestment from the college. This is an opportunity for the College to recommit to its core values, and live those out through our financial decisions. Financial ties to socially unjust causes can be present in several forms, from investments in mutual funds to business connections with banks, such as Wells Fargo, which are known to fund fossil fuel infrastructure. We are calling upon the College to reinvest in imaging a safe, healthy future.

Open Letter to Board of Trustees, The President, and The Chief Financial Officer:

Dear Trustees,

As members of the Gustavus community who value Justice, Faith, Excellence, Community, and Service, as well as global citizens, we address you with a task that must be carried out in order for Gustavus to uphold its core values and protect the future of its students.

In response to the letter sent by the Board of Trustees on June 20, 2017, we have assembled and summarized financial information. The findings indicating that divestment is not harmful to a college endowment; the ethical weight of divestment continues to grow. 

As stated in a study conducted by Christopher Ryan and Christopher Marsicano on multiple endowments of divested colleges and universities, “there was not a significant abnormal risk-adjusted return for fossil fuel-free portfolios.” [1] This indicates that fiduciary risk was not increased through investing strictly in fossil fuel free funds. Additionally, “these investment-restricted portfolios were not foreclosed to the diversification opportunities available to unconstrained portfolios.” [1] Thus, the concern regarding poor diversification of mutual funds as required by the Uniform Prudent Management of Institutional Funds Act (UPMIFA) is unfounded. This is corroborated by the case of Unity College, an institution in Maine with a 14 million dollar endowment, whose Board of Trustees divested from fossil fuels in 2012. Their fiscal portfolio “met or exceeded market benchmarks in the five-year period following its divestment.” [1] This illustrates that divestment does not augment the likelihood of decreased returns or poor diversification. This credibly addresses the fear of litigation against the college on behalf of the endowment. 

The 2017 letter states that due to the language of the UPMIFA, “which requires the College to manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances,” [2] the college was unable to divest. However, upon further examination, the UPMIFA also states that one should, “develop an investment strategy appropriate for the fund and the Charity” [3] and “the institution [can] reasonably determine that, because of special circumstances, the purposes of the fund are better served without diversification.” [3] These statements allow the investor to take into account reputational and environmental risk while making investments. Plainly stated, Gustavus has the right to ensure it invests in funds which align with its core values and protects the future of its students.

The UPMIFA reminds investors that the act also “protect[s] the interests of donors who want to see their contributions used wisely.” [3] In the letter from the Board of Trustees, the students of Gustavus were informed “that the endowment currently offers a social responsibility fund for donors wishing to contribute in that manner,” [2] however, after Monday, March 15th, 2021 students were informed that this exists only in a PAX fund which is comprised of 25% socially responsible funds and 75% other PAX funds. We ask that in accordance with UPMIFA, there is a clear option for donors to select Environmental Social Governance (ESG) funds and that a letter from Gustavus students be added to the endowment form asking donors to redirect their money to ESG funds. 

Throughout the 2017 letter from the Board, a common theme revolved around other colleges who “have only divested from coal or tar sands” [2] or that, “fewer than 50 Universities and Colleges have agreed to divest from the fossil fuel industry.” [2] We ask that Gustavus does not compare itself to other colleges but examines the integrity of our Core Values and the #WhyGustavus persona. We wish for OUR community to push ahead regardless of the commonality of the actions it takes.

Another theme in the letter was the negative narrative toward societal recognition of fossil fuel damages. It states, “[divestment] will not be financially impactful to the [fossil fuel] companies as there are many other investors.”[2] Additionally, “….like it or not, oil and gas energy are integral components of the global economy and critical to the livelihoods of billions of people around the World.” [2] Furthermore, “divestment merely intensifies the rhetorical divide that is making true progress/solutions more difficult to achieve” [2]. We do not believe that Gustavus’ divestment alone will halt the fossil fuel industry, however, it will be a catalyst to change. Gustavus can be a catalyst for change. This is what we ask of you. We ask that Gustavus recognize the fossil fuel industry as a major contributing factor to climate change and choose to not be a part of it.

Finally, the study by Ryan and Marsicano found “no discernable, consistent, average impact of divestment on endowment assets and no conclusive evidence of negative effects to private university endowments more generally.”[1] Divestment is unlikely to damage endowment return or result in litigation against the college. The ethical weight of divestment on the other hand is entirely positive, for it aligns with Gustavus core values and reminds us that we have great impact on the world around us. To truly act in accordance to the UPMI, support a sustainable financial future for investment of endowment funds, and secure a future for Gustavus students, we ask that Gustavus:

1. Prepare and deliver a public statement announcing that Gustavus is divesting. This entails:

  • Setting a timeline for reinvestment from current mutual funds to classified ESG funds.
  •  Ensuring new endowment funds are being placed in ESG classified funds.
  •  Stating that Gustavus will not fund the fossil fuel industry through mutual funds.
  • Reminding the community and itself that divestment is not the pinnacle of the fight for climate justice, it is a symbolic action which aligns the college endowment portfolio with its mission and values.

2.Established a position for a student liaison regarding the uses of the endowment.

  • A student who has access to where endowment funds are generally being invested by Gustavus and advocate for the student bodies interests.
    • This could take the form of a student representative signing a confidential agreement with the Board of Trustees and advocate for student ideals.

3. A message from Gustavus students in the endowment forms asking for money to be placed in ESG funds.

  • In order to provide a diversified portfolio we ask that Gustavus while on the journey to divestment selects more ESG funds for this money to be funneled to.
  • We ask that this option is plain to the endowers.

4. As President Bergman kindly informed the Gustavian weekly as published on March 19th, 2021 “divestment is a regular topic discussed by the Board of Trustees and our [Gustavus] investment committee,” we ask that the transcripts/notes from these meetings be placed in an accessible area, such as the college website.

The process of divestment and reinvestment is difficult and daunting, but we are not demanding perfection. We are asking for action. As President Bergman reminded us on Wednesday, May 15th, 2019 in her email to the Gustavus Community, “Please remember that each of us is responsible for doing our part to encourage environmental sustainability.”


Your Concerned Gustavus Community



  1. Belvedere-Young, Grayce (et. al.), Divest Response Letter to Gustavus Students(June 20, 2017)
  2. Ryan, Christopher and Marsicano, Christopher, Examining the Impact of Divestment from Fossil Fuels on University Endowments (January 27, 2020). New York University Journal of Law and Business, Vol. 17, 95-152 (2020)., Roger Williams Univ. Legal Studies Paper No. 195, Available at SSRN: or
  3. Uniform Law Commission, Prudent Management of Institutional Funds Act 


*Response from the President and Board of Trustees


If readers are interested in learning more or being involved, please email Abigayle Paulson ( or Alex Terpkosh (


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