Why won’t the Cal Poly Foundation stop investing in fossil fuels?

This article was originally published in the Mustang News April print issue.

Miranda Mills graduated from Cal Poly in the spring of 2017 with a degree in architecture. Some years later she ended up at a construction company doing project management.

“Construction is incredibly slow to change,” Mills said of her industry. “What kind of importance do we put on sustainable construction? There’s almost none.”

Mills said she was raised with the notion that climate change was her generation’s problem, butting in its ugly head to constantly remind her of its looming and present atrocities.

Mills’ enrolled in Professor Jonathan Reich’s EDES 408, Implementing Sustainable Principles, in her final quarter at Cal Poly. The class’s final project asks students to find ways to “implement sustainability principles” at Cal Poly, according to Reich.

“Me and my roommates, who all took the class, called it ‘sad class,’” Mills said, joking that Prof. Reich would probably hate hearing her call it that. “The problems of climate change are too big for any one person to really feel like they can make a difference.”

Reich pitched a project idea to Mills and some of her classmates – to pressure the Cal Poly Foundation to divest its portfolio from fossil fuels.

The Cal Poly Foundation maintains the school’s endowment and supports university activities, according to its articles of incorporation. Between 2012 and 2020, 17 of Cal Poly’s donors gave a combined $406 million to the Foundation, according to a presentation created by the university.

As of Dec. 31, 2023, the Foundation held a $277 million endowment. Most of the money is held in mutual funds, 11 of them maintaining exposure to the fossil fuel industry, equating to $16 million in fossil fuel investments, according to calculations done by FossilFreeFunds.org.

Mills and a group of six other students had five weeks before presenting to the Cal Poly Foundation board on May 6, 2017. During the quarter, Mills and her colleagues would compile a 19-page document on how Cal Poly could achieve a sustainable investment portfolio. Their main goal – establish guidelines and positions to prevent the endowment from investing in fossil fuels, according to Mills.

The committee would weigh in on investment decisions along with the board members to ensure that the foundation is investing along Environmental, Social and Governance principles (ESG). ESG investment guidelines and funds require investors to avoid investments in fossil fuels, companies with corruption issues, child and slave labor, companies with pollution issues, companies that engage in illegal labor or financial practices and so forth.

Mills added that adopting these measures would get Cal Poly closer to achieving the coveted Platinum rating from the Association for the Advancement of Sustainability in Higher Education Sustainability Tracking, Assessment & Rating System (AASHE STARS). AASHE STARS ratings are the standard of sustainability ratings across higher education institutions and are rated on a scale of Bronze, Silver, Gold and Platinum ratings, Platinum being the highest and Bronze being the lowest.

Days before the meeting, Professor Matt Ritter, who sat on the board at the time, gave Mills and her colleagues the rundown on how the meetings worked and the demographics of the Foundation, according to Mills. Ritter told them many of the Foundation’s board members have a background in agriculture, engineering and other industries that could be affected by divestment, according to Mills. Ritter did not respond to Mustang News for comment on this story.

Unperturbed, Mills and her group readied themselves for their presentation.

“It was early in the morning [Saturday],” Mills said. “We had all dressed up, we looked like students going to interviews.”

The crew assembled in front of Building 104, the Advanced Technologies Laboratories, their excitement and anxiety bubbling as a chauffeur led them into the Foundation’s meeting room, Mills recalled.

Mills described the room similar to sitting in front of Congress for a hearing. The heads of the Foundation sat above her group in an oval.

“We were all nervous. I don’t think we realized at the time how much backlash we were going to get at that meeting.”

Miranda Mills, Cal Poly architecture alumnus

Mills and her colleagues were signaled to begin. One at a time, they stood up presenting the various ways in which the Foundation could invest sustainably and establish more oversight over their investing practices. She remembered it being a good presentation. They had spent all quarter practicing their presentation in class — laboring over every line.

Mills remembered a few board members commending the group for their tenacity and depth of research, but the critiques quickly followed.

“They weren’t keen on divestment,” Mills said. Some of the board members insisted Cal Poly was an engineering and agriculture school; it was heavily intertwined with “the companies and the processes that you’re trying to divest from,” Mills recalled.

Divestment was off the table.

“It’s our job to maintain these healthy relationships with these companies for student success in their career,” Mills recalled many of the board members articulating to the group.

A few days later, they received an email to meet with President Armstrong, who was not in attendance at their initial presentation.

On June 1, they gave their presentation to the audience of President Armstrong and Executive Director of Facilities Operations Dennis Elliot.

“I remember [Armstrong] tried to say something like, ‘You know, I’ve made a point in my career of standing up for environmental justice’ and Miranda said ‘Yes – and we’re asking [you] to do that again,’” Luis Wiley, an architecture junior at the time and a member of Mills’ group, recalled.

Mills said she doesn’t recall that exchange specifically but said it fit the general milieu of Armstrong’s comments during the meeting. Reich noted the exchange in a follow-up email to the group after the meeting.

Wiley, Reich and Mills all felt Armstrong patronized their group and didn’t expect them to be as well-researched as they were. The group was told not to attend the upcoming Foundation meeting in August 2017, yet some members went, according to Reich. Their push for divestment was dead in the water.

“I was trying to get the other group members to start organizing,” Wiley said.

But his calls fell on deaf ears for many reasons, mainly being that a majority of the group’s members were graduating and the quarter was coming to an end.

Reich was not surprised to learn that the group did not move the needle on divestment. He recalled an incident during Warren Baker’s tenure as Cal Poly President when Harris Ranch threatened to pull its funding for a new meat processing facility if the school did not allow a meat industry representative to be present at Dr. Michael Pollan’s talk on the effects of factory farming, as previously reported by The New Times.

“University administrators are so hurting for money that you put a little bit of money on the table and they’ll just about do anything for you,” Reich said.

Mustang News was unable to obtain a full list of Cal Poly’s major donors due to anonymity laws, but many are listed on promotional documents or have made their donations public.

Austin Hearst of the Hearst family fortune; William Frost, founder of Chemlogics – a fracking liquids company; Bill Swanson, former CEO of Raytheon Technologies; Peter Oppenheimer, former CEO of Apple and current Goldman Sachs board member; Richard Stollmeyer, billionaire and former CEO of Mindbody; and Abdul Aziz Al-Ghurair, billionaire Emirati businessman, Emirati Royalty and owner of materials and petroleum firm Al-Ghurair Industries are all listed in the major gifts and lead donors section of a university produced presentation.

University documents illustrate a similar dynamic between donors and the Cal Poly Foundation, hereinafter referred to as the Foundation. Former foundation financial director Bob Wacker noted that a fossil fuel-free investment option could be provided at the “request of a donor” in an August 2017 Foundation meeting.

The Foundation’s objections to divestment have also been noted in their 2019 STARS submission. In the school’s submission, Cal Poly called divestment “reactionary” and said other California State Universities (CSUs) “have taken a more proactive approach to sustainable investing,” although the university did not elaborate on what that meant. Furthermore, the school has no policy on investing in fossil fuels, according to President Armstrong.

University Sustainability Coordinator Kylee Singh further stated that “[Armstrong] is aware that there are a number of folks interested in [divestment] but is also balancing that push with the values of the folks who serve as major donors to the university and those who serve on the Foundation board,” in a 2020 email to a group who pushed for the university to divest obtained by Mustang News. President Armstrong did not elaborate on Singh’s comment when asked by Mustang News.

Armstrong himself has said that members of the board and himself are “firmly opposed to divestment as we see only harm and do not see a benefit to the holistic picture, that includes student success,” in a 2019 email to Reich. President Armstrong did not elaborate on his statement to Reich when asked by Mustang News.

“I feel like I have been having that meeting over and over again… with coworkers and bosses,” Mills said, comparing her industry with Cal Poly.

Despite some of her superiors’ resistance to change, she is undeterred.

“Keep bringing it up, don’t let them forget about it,” Mills said. “It’s my only coping mechanism.”

Trying again

Following Mills’ and Wiley’s group’s efforts, a few students tried to organize a divestment campaign in 2019, but the energy quickly fizzled out and the campaign didn’t accomplish anything, according to Reich.

Renewed interest in 2021 by a coalition called DivesttheCSU led by a group of community members, activists, students and faculty successfully got a resolution passed by ASI and the Academic Senate to urge Cal Poly to divest from fossil fuels, reinvest 5% of its endowment into sustainable funds and adopt ESG investment guidelines.

In a public pressure campaign during the winter and spring quarters of 2021, Lisa Swartz, then a mathematics major, and Hope Springer, the ASI Sustainability Director at the time, spearheaded efforts to effect change.

The campaigning group met with President Armstrong multiple times over the course of the spring quarter of 2021.

In one meeting, Swartz noted Armstrong asked the group, “if we divest, does that mean we don’t allow fossil fuel companies to recruit Cal Poly students?” thereby reiterating his objections to Mills’ and Wiley’s group.

Swartz said she felt as though “he’d been approached by people for divestment-related stuff in the past and sort of had a prewritten almost response, you know.”

The resolution was passed by ASI, but the Academic Senate was only “acknowledged,” according to Springer.

The CSU Board of Trustees passed a resolution urging CSU schools to divest their endowments from fossil fuels on Oct. 6, 2021, with the caveat that mutual funds would not need to be divested from. Cal Poly never adopted the resolution and still has no policy on investing in fossil fuels. It has added a policy statement acknowledging ESG investment guidelines, but Reich said it “has no teeth.”