Increasing sustainable investing practices with ASI – Technique

Sustainable investment and fossil fuel divestment by colleges and universities have received increasing attention as the climate crisis continues to worsen. Fossil fuel divestment refers to the process of institutions and organizations divesting money from fossil fuel companies and has been a largely student-run movement. 

In fall 2021, students looking to enact change at Tech began the Association for Sustainable Investment (ASI), whose goals include fossil fuel divestment, sustainable finance learning and increasing related educational opportunities for students. 

“This organization provides students with an avenue to learn more about and act on finance-related climate justice concerns, develop their leadership skills and meet other sustainability-minded students,” said Thiago Esslinger, fourth-year BCHM and EAS major and ASI founder.

Although Tech has made sustainability one of its central values and made numerous commitments to being green, many students have pointed out the failings of the Institute in following through on these promises. 

“While Georgia Tech has made significant progress in sustainability in recent years, including opening the Kendeda Building for Sustainable Innovative Design, launching the EcoCommons Project and firmly establishing the Serve-Learn-Sustain initiative, it has not done enough to financially address the urgency of the climate and ecological crisis,” Esslinger said.

For example, former Tech President Wayne G. Clough signed the American College & University Presidents’ Climate Commitment (ACUPCC) in 2007, an agreement to focus educational resources on combating climate change and reducing greenhouse gas emissions. However, the Georgia Tech Foundation (GTF) still invests in fossil fuel companies. 

As of June 30, 2021, 3% of the Georgia Tech Foundation’s (GTF) investment portfolio was allocated to energy investments, and according to the GTF in a statement to the Technique, this “includes historical and alternative fuels sources.”

According to the 2020 GTF Annual Report, Tech had -29.5% global market returns in the oil and gas category.

The GTF has refrained from making a public statement about divesting from fossil fuel companies.

“While Georgia Tech has made significant progress in sustainability in recent years, including opening the Kendeda Building for Sustainable Innovative Design, launching the EcoCommons Project and firmly establishing the Serve-Learn-Sustain initiative, it has not done enough to financially address the urgency of the climate and ecological crisis,” Esslinger said.

Esslinger compared the investment decisions of GTF to those made by other universities’ endowments.

“Whereas other top-tier institutions, like Harvard University, Oxford University and the University of California, have publicly committed to divesting their endowments from fossil fuels, Georgia Tech and the Georgia Tech Foundation have refrained from doing so,” said Esslinger, who defines fossil fuel divestment as a switch to values-based investing. 

The GTF explained their decisions regarding investments. 

“At the Georgia Tech Foundation, we review and consider managers with a focus on clean energy investments while recognizing the near-term reality of the need for base load energy sources from traditional sources. Significantly, we formally include ESG (Environment, Social, & Governance) risk factors in our investment decisions when reviewing new and existing manager relationships,” said the GTF. 

Esslinger noted Tech’s 2021 Sustainability Tracking, Assessment & Rating System report as a revealing resource about Tech’s commitments to sustainability. This score, based on self-reported facts, rates colleges and universities on their sustainability practices in a variety of areas, such as building and grounds operations, academic curriculum and sustainable research. 

Earning 58.19 points, Tech received zero out of seven possible points for the investment and finance category — notably, receiving zero points for investment disclosure, sustainable investment and a lack of a committee for investor responsibility. This was due to a lack of the minimum information needed to award points for this section. 

Esslinger pointed out that there are numerous examples of other colleges finding ways to engage students with how endowments are invested. 

“Georgia Tech Foundation’s lack of significant student involvement and public commitments to sustainability is noticeable when compared to the Arizona State University Foundation which publicly supports environmental initiatives and allows students to engage with companies they invest in through shareholder meetings,” Esslinger said. The GTF explained what existing opportunities there are for student involvement.

“We are fortunate to interact and benefit from Georgia Tech student contributions and efforts. Our committees receive regular reports from the Student Foundation, the largest student run investment fund of any university, on their strategies and investment priorities,” said the GTF. “We also include student interns in our business teams, and they contribute significant work in reviewing the effectiveness of our investment programs.”

While it is easy to focus only on Tech’s campus and sustainability efforts close to home, Esslinger emphasized that it is important to consider that financial decisions made in Atlanta can impact communities across the country and world.

“If we look at where fossil fuel plants are located, they are often disproportionately in close proximity to low-income and/or minority communities,” Esslinger said. “Climate change, driven mostly by the burning of fossil fuels, has also had a significant impact on the communities that contribute least to total greenhouse gas emissions. Divestment from fossil fuel companies is an act of protest against this industry that has fueled climate change and continually denied environmental justice.”

During his time at Tech, Esslinger has worked with numerous organizations focusing on climate action. After initially discussing fossil fuel divestment with his peers through a group chat, Esslinger worked to create organizational change. 

“Following the failed fossil fuel divestment resolution (8:7:8) from Georgia Tech’s Student Government Association’s Undergraduate House of Representatives in spring 2020, I launched the GT Divest initiative to raise awareness of this concern and gather support from the Georgia Tech community through a petition,” Esslinger said. “We grew from a group chat to a team over the summer.”

GT Divest has now transitioned into the Association for Sustainable Investment. ASI consists of four committees: communications, membership, research and programming. Members of these committees work on projects beyond just focusing on fossil fuel divestment. 

“We also strive to implement other lasting changes at the Georgia Tech Foundation that better serve students and our Institute such as developing stronger sustainable and responsible investment practices and metrics, and increasing educational and student involvement opportunities on the topic,” Esslinger said.

One of the ways to increase education opportunities is focused around sustainable finance. 

“We are hosting speaker events with professional leaders in the sustainable investment field and working with other organizations and departments to implement sustainable investment as part of existing investment-related courses and the Vertically Integrated Project (VIP) Program for undergraduate students interested in this type of research,” Esslinger said. 

ASI has so far encountered roadblocks from the GTF. 

“The Institute and the Foundation both proved initially receptive to discussion, yet the Foundation’s status as a separate legal entity, that has remained relatively quiet on investment topics throughout its history, has delayed significant progress in terms of public commitments and increased transparency,” Esslinger said.

Despite these challenges, Esslinger and his peers remain optimistic that change can and will occur. He believes that switching to investments in renewable energy would be a clear commitment to Tech’s motto of Progress and Service. 

“With continued student support and conversations with the Foundation, we can and will make positive change together,” Esslinger said.

To learn more about ASI and their efforts, stop by the Winter Organization Fair on Feb. 10 anytime between 11 a.m. – 1 p.m. at Tech Green, visit
linktr.ee/asi.gatech or follow @asi.gatech on Instagram.