Memorandum

TO: Janet Hopkins, CEO

Ralph Kramden, COO
FROM: Amand Biernacki, Research consultant
DATE: October 22, 2015
SUBJECT: Divestment Topic Proposal

Dear CEO Hopkins and COO Kramden,

INTRODUCTION
My purpose in writing to you is to receive approval for the topic of the economic effects of fossil
fuel divestment. As you requested, I have created a proposal for a divestment topic to be
developed into a formal report. The following proposal contains a description of the project and
the proposed topic.

PROJECT BACKGROUND
As you are aware, PWG managers have reported that group members have been insisting BBI
pension funds be divested from environmentally insensitive companies, and in some groups there
have been conflicts among the members. Additionally, the media have been making inquiries,
and there are worries about how BBIs pension investments are affecting the companys
reputation for being socially responsible. These issues are affecting morale and performance
among PWG members, and there are concerns that internal conflicts will severely damage the
effectiveness of the PWGs. BBI wants to be proactive in avoiding these negative outcomes.

In hopes of coming to a reasonable company-wide agreement on these issues, the CRC will hold
a series of meetings with PWG members about the controversial investments and, based on these
meetings, come to a decision on divestment. Before the meetings, BBI wants to ensure that the
PWG members are educated about important divestment issues. I have been asked to prepare a
formal report on a divestment issue to ensure the PWG members are fully and accurately
informed.

PROPOSED TOPIC
As you know, divestment is a complex and controversial subject. In order for a topic to be useful,
it needs to be limited in scope. For this reason, I have chosen the economic effect of fossil fuel
divestment as the topic for the formal report. In order to understand the topic, one must be
familiar with complex economic concepts. Also, there are many disagreements among
economists and investors surrounding what the future economics on fossil fuel companies and
divestors will be. This topic, while specific, is complex enough to represent the technical and
controversial elements of divestment as a whole. This section is broken into two subsections. The
first will discuss the technical element of this topic and how it relates to BBIs current issues.
This section will discuss the controversial element and how it connects to the problems of BBI.

1
Technical Element
The economic effect of fossil fuel divestment is a technical and complex topic. In order to fully
understand the subject, one must be familiar with advanced economic concepts. Some of these
concepts include economic inputoutput life cycle assessment models (EIO-LCA), shadow
impact calculators (SICs), and endowment carbon shadows. Because these economic concepts
are so technical and rarely talked about in everyday life, it is likely that the PWG members have
varying levels of understanding regarding this. A formal report on this topic would familiarize all
of BBIs employees on the economic effects of fossil fuel divestment, creating a more unified
understanding of divestment among employees when it is time for the CRC meetings. This
understanding will allow employees to ask well-informed questions and voice relevant concerns
at these meetings. Therefore, their concerns will be dealt with before they turn into frustrations,
and eventually into conflicts between employees and surrounding the CRCs decision.

Controversial Element
The economic outcomes of fossil fuel divestment are far reaching. Not only do they affect fossil
fuel companies, but they also affect divestors. Controversies around the economic effects of
fossil fuel divestment arise when determining exactly how much each group is affected. Many
economists say the negative economic costs for divestors, including loss of income, outweigh the
impact the divestors are trying to make on fossil fuel companies. However, others, such as
California State Senator Kevin de Len, believe that fossil fuels are old technologies that will
prove to be poor long-term investments as cleaner energy sources gain popularity. The long-term
effects of fossil fuel divestment are under debate, and economists, politicians, and investors are
unable to come to a consensus on this topic. Because there are many conflicting opinions
regarding the economic effects of fossil fuel divestment, it is likely that there could be
disagreements among employees. A formal report on these economic effects would familiarize
all employees with both sides of the argument, creating a more unified and unbiased viewpoint
among BBI employees. It would also show that divestment is a controversial topic as a whole,
and so it is alright for there to be different opinions regarding the topic. This will help to avoid
possible workplace disagreements regarding divestment and the CRCs decision.

CLOSING
The economic concepts relating to fossil fuel divestment can be confusing. Conflicts and
confusions regarding divestment can be avoided through educating BBIs employees on the topic
of fossil fuel divestments economic effects. A formal report distributed among BBI employees
would give all employees an accurate understanding of this confusing and controversial topic, as
well as the concept of divestment as a whole. This would prepare the employees for the CRC
meeting regarding divestment and help avoid possible future conflicts surrounding this topic. I
am eager to develop a report for your company pending your approval of this topic. Thank you
for your time, and I look forward to your response.