Universities Divest from Mining Companies

October 14, 2015

 

The University of California has become the latest educational institution in the United States to divest from investments in coal and oil sands companies in its endowment and pension funds. The university made the $200 million move in response to environmental concerns and increasing financial risks.

 

According to Chief Investment Officer Jagdeep Baccher, the university decided that coal and oil sands were no longer good investments for its $98.2 billion fund. The university believes that it should consider climate change as a risk factor when evaluating investment opportunities.

 

The University of California still has about $10 billion in other energy and utilities industry investments. That is equal to about 10 percent of the university's endowment and pension funds. The University does not plan to divest from oil and natural gas stocks because the world still relies heavily on fossil fuels.

 

UC's regents committee announced last year that it would not sell off stocks and holdings in oil, coal, and natural gas. The committee said at the time that it was trying to balance the cause of climate change with the need to earn good returns for pensions, faculty chairs, and scholarships.

 

Last year, Stanford University announced that it planned to sell shares in coal mining companies held by its nearly $19 billion endowment fund. After a campaign by students and a review by its advisory panel on investment responsibility, Stanford's trustees decided to stop investing in about 100 firms that mine coal to generate power. The university said it would not sell oil and gas holdings because alternatives to those fuels are not readily available.

 

Other educational institutions have divested from fossil fuel investments, including Hampshire College, Pitzer College, and College of the Atlantic. Students at other universities have called on their institutions to divest as well.