UC Fossil Fuels Divestment Largest to Date
The University of California announced September 17th that it was divesting entirely from fossil fuel companies. The decision followed six years of vigorous campaigning by Fossil Free UC, an organization of students, faculty, staff and alumni, who argued that it was immoral for the UC to continue its investments, given the climate emergency. Top UC investment officers insisted, however, that their decision was strictly financial.
To date over 40 American colleges have divested of at least some fossil fuel stocks, including Stanford, the University of Massachusetts, and Georgetown. But with its endowment of $13.4 billion and its $70 billion pension fund, the UC action will be the largest public university ever to divest, and the decision is expected to reverberate throughout the academic world and beyond. Bill McKibben, one of the founders of the international movement, said such a decision “would be one of the biggest moments in (our) seven-year history.”
In a Los Angeles Times op-ed, Richard Sherman and Jagdep Singh Bacher, the UC’s top two investment officers, said that the decision was based entirely on perceived financial risk and not in response to activist demands. They pointed out that the UC had been phasing out its fossil fuel investments for several years, and said that they simply believe “that there are more attractive investment opportunities in new energy resources than in old fossil fuels.”
Fossil Free UC campaigners, for their part, approached the investments primarily from a moral perspective. As campaigners Emily Williams and Theo LeQuesne put it, “If extraction of more fossil fuels in a time of climate emergency is a moral obscenity, then investments in extraction is complicity in that obscenity. For decades, the UC padded its portfolio with investments in the industry that has sickened, maimed, and degraded communities in California and around the world.”
However different the approaches, the same end has been achieved. As Bacher and Sherman put it, “While our rationale may not be the moral imperative that many activists embrace, our investment decision-making process leads us to the same result.”
Go Fossil Free, the umbrella organization for the groups working on divestment, claims that worldwide over a thousand organizations have now divested wholly or in part since the campaign began in 2012. Besides universities and colleges, they include non-profits, churches, foundations, public pension funds, and city governments. Los Angeles, Seattle, Portland, San Francisco, Minneapolis, and New York have all divested, as have several major European capitals. Ireland became the first nation to do so this past summer.
Investment funds worth over eleven trillion dollars have now divested some or all of their fossil-fuel holdings. While the total does not, of course, represent how much money is being pulled out of fossil fuels, just how much the funds manage, it does indicate the enormous financial clout of those who are saying “no” to fossil fuels.
Is it working? Goldman Sachs seems to think so. In a recent report, it blamed divestment for the steep drop in coal production and warned that oil companies need to make major changes if they don’t want to end up in similar straits.
Finally, if you’re wondering about CalPERS and CalSTRS, the largest two pension plans in the nation with assets totaling over $500 billion, they both have portfolios with considerable holdings in fossil fuel companies. Fiona Ma, the state Treasurer, is calling on CalSTRS to divest, and forty students appeared before its board on Sept. 5 asking for the same.
For a Fossil Fuel Free UC