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The St. Paul school board recently voted to stop investing the school district’s money in fossil fuels and private prisons, joining a growing number of institutions distancing themselves from controversial industries.
The board made its unanimous decision at a November 15th meeting, approving twin divestment resolutions after nearly a year of research, consultation with its bank, and time needed to draft the new rules. School board members Uriah Ward and Chauntyll Allen started the discussions about divestment.
The issues of prison divestment and fossil fuel divestment are separate, but the written resolutions for each emphasize racial disparities in the respective industries.
“All actions that address climate change and environmental degradation must prioritize justice and equity,” reads the resolution about fossil fuels. “While vulnerable populations, such as those in developing countries, women, children, indigenous groups, people of color, and the financially insecure, have accrued few if any economic benefits from fossil fuels, they disproportionately bear harms.”
The majority of students in the district are students of color. As of 2021, 25 percent of the student body were Black, 30 percent were Asian, and 14 percent were Hispanic/Latino, according to St. Paul Public Schools.
The school board oversees a fund for “other post-employment benefits” that are paid out to qualifying school district employees after they retire. That fund is worth about $50 million, and is invested in several different places to continue generating money to pay retired employees.
About $9 million, or 19 percent, was invested in fossil fuel companies, according to Ward. The names of the companies where the funds were invested are kept confidential due to agreements between the board and their asset manager at Wells Fargo, Ward said.
At its first meeting of the year, the school board holds a routine vote authorizing the assistant treasurer to handle the board’s investments. Ward, who was elected to the board last year, noticed the vote on the meeting agenda and started asking the district and school board where that money went.
Ward set out to see if the school board could change the investments.
“We as an organization do the best we can to serve our kids, but we also have economic power in the way that we invest,” Ward said at the November board meeting. “It’s our responsibility to make sure that we’re using that power to help to cultivate the kind of world that we want to build for our students.”
The school board doesn’t invest that fund directly; an asset manager at the board’s bank handles the day-to-day decisions about where to invest the district’s money. Asset managers generally put that money where they believe it will grow—unless there’s a policy asking them not to invest in certain industries.
That means that if an organization hasn’t set specific parameters, its money could be invested in any industry—which is how the school board’s funds ended up in fossil fuels.
When Ward first proposed divesting from fossil fuels, Allen suggested an additional change: divesting from private prisons. The board doesn’t hold any investments in private prisons, but there was nothing stopping them from doing so.
School board chair Jim Vue said the board’s diversity and the members’ understanding of divestment as an equity issue helped the approval process go smoothly.
“I think one of the reasons why there wasn’t a whole lot of opposition is because board members understood the connection between divesting from the school to prison pipeline and divesting from fossil fuels, because we know that our communities that are not white are disproportionately impacted,” Vue said.
Ward hasn’t found a record of any other school board in the country divesting from fossil fuels or private prisons even as such moves become more common among other institutions.
Several organizations in Minnesota have taken steps to divest from fossil fuels. The University of Minnesota is in the process of divesting, and the Minnesota State Board of Investments has divested from the coal industry. The Minneapolis City Council voted in 2015 to divest its funds from fossil fuels.
Private prison divestment has caught on at several organizations and universities, too—Columbia University was the first university to divest in 2015, followed closely by the University of California system.
What does ‘divestment’ mean?
Activists across several social justice movements have demanded that governments, colleges, and nonprofit organizations take their money out of industries they feel are harmful.
Activists push divestment for a few key reasons: Economically, if enough organizations stop investing in an industry, it could create a financial barrier for that industry. Divestment is often a symbolic move, too.
Tee McClenty is the executive director of MN350, a climate justice organization that encourages divestment from fossil fuels. She said divestment sends a message to the industries that are targeted.
“When we invest in fossil fuel companies, we are collectively writing them social license, allowing them to extract from the earth and local communities—especially Black and brown and Indigenous communities—where they operate with little regard to the consequences,” McClenty said. “Divestment is one way we can impose consequences and begin to heal the harm that has been done.”
Divestment movements often spark controversy. Behind the University of Minnesota’s vote to divest from fossil fuels was an eight-year-long student movement. Students at Harvard University have been pushing the university for four years to divest from private prisons to no avail.
Unlike those drawn-out debates, Ward said the St. Paul school board’s effort went fairly smoothly. Board members had questions for their bank and wanted to ensure that divestment wouldn’t pose a financial risk. According to Ward, their advisor said it wouldn’t.
The board also received positive input from community members, teachers, and parents.
“I don’t remember seeing any negative community feedback about it, which is not usually what happens whenever we talk about issues that are facing our schools,” Ward said. “It was really nice to see it being a unifying effort, and also, I think, demonstrates that the effort does reflect the values of this community.
The teachers’ union, St. Paul Federation of Educators, wrote a letter to the school board endorsing both of the proposals. Tom Lucy, a social worker in St. Paul Public Schools and a member of the union’s climate action team, spread the word about divestment among union members and encouraged teachers and community members to send letters of support to the board.
“Where we put our money shows where our values are,” Lucy said. “Our job is to educate our kids, our job is to prepare them for a future. We feel it’s very obvious that without addressing climate change, their future is very much at risk.”
Some students got behind the measure, too. At a school board meeting in April, eighth grader Harriet Miller took the mic to read a statement in support of divestment.
“I want to grow up in a world where I can actually live, where children can live without the worry of climate change being our biggest predator,” Miller said at the time. “I know this won’t end climate change and all, but knowing that our schools can be doing something—that will put a little ease to my mind.”
With the board’s vote to divest, its asset manager at Wells Fargo will be able to move the money from fossil fuels to other investments in a matter of weeks, Ward said, adding that the change won’t create any additional work for district employees or school board members.
Investing in an equitable future
The St. Paul school board has previously taken steps toward distancing itself from the criminal justice system. In 2020, the board voted not to renew its contract with the St. Paul Police Department, ending the practice of placing police in schools as school resource officers.
With these two divestment measures, the school board is looking to further some of that equity work.
The resolution to divest from private prisons notes the high rates of incarceration in the United States, and cites statistics from Michelle Alexander’s book, “The New Jim Crow”: The United States makes up approximately 5 percent of the overall world population but comprises 25 percent of the world’s prison population.
The proportion of people incarcerated in private facilities has increased in the last twenty years. Over 26,000 people were held in private immigration detention centers in 2017—a 442 percent increase since 2002, according to The Sentencing Project.
The resolution to divest from fossil fuels also emphasizes equity, noting that environmental issues tend to disproportionately impact low-income communities the hardest.
Researchers have found that asthma hospitalization rates in the Twin Cities are much higher along the Interstate 94 corridor, which includes several communities of color, because vehicles traveling on the highway create air pollution.
McClenty said she sees these disparities across the country and world in her role as a climate justice activist.
“We know that the most catastrophic impacts of climate change fall first and hardest on those communities who have historically contributed least to the crisis, whether it’s BIPOC (Black, Indigenous, and people of color) communities here in Minnesota… or the youth around the world,” McClenty said.
Ward said his biggest takeaway from the board’s vote is that effecting change wasn’t as difficult to accomplish as he had expected. He hopes more school boards will take a look at their own investments.
“Maybe some other ones hop on and decide to make this part of their agenda,” Ward said. “If all of us at all levels decide to make these changes and align our money with our values, then it can make a really big impact.”