A committe of regents for the University of California has voted to maintain the system’s financial holdings in fossil fuels, frustrating a student-led effort to divest UC’s portfolio of coal, oil, and gas companies.
At the same time, regents approved sustainability principles for investment, including a $1 billion plan to invest in direct solutions to climate change.
The vote came in response to recommendations of a task force on sustainable investing. In presenting the task force’s recommendations, UC Regents' Chief Investment Officer Jagdeep Singh Bachher said that selling off all fossil fuel holdings would amount to $10 billion of the $91 billion total in the UC portfolio. Selling off holdings in “the carbon underground 200,” a privately-created index of the largest emitters of coal, oil and gas, would require UC to sell off $3 billion in its investments. Coal alone is half a billion dollars, he said.
“It is clear to me and from the homework that I’ve done that these actions will have financial consequences on all of us and on our portfolios,” Bachher said, later adding, "There are financial consequences every time we respond to an unfavorable industry or moral cause of the day."
Students from Fossil Free UC had demonstrated outside the meeting in San Francisco Wednesday, and two UC students had served as task force representatives. The vote is a setback for a national campaign seeded by 350.org, whose “Go Fossil Free” educational tools have been used by students around the country to build grassroots divestment efforts, including at 9 of the 10 UC campuses.
Regent Sadia Saifuddin, a student from UC Berkeley, sought to preserve student involvement in environmentally responsible investment discussions in the future. “Coal is a sunsetting industry, and if we’re going to talk about risk management as our number one priority, we need to consider carbon risk,” she said.
Regents and Bachher countered that as long-term investors, UC leaders had a responsibility to take a "holistic" and "positive" approach to investment decisions around climate change. "And it's for this reason we're committing to the adoption of an investment decision making framework that includes these environmental social and governance type issues in the investments going forward," Bachher said. A spokeswoman for the UC Regents told the Daily Californian that divestment wasn't likely to make much of an impact on climate change.
But Saifuddin said that wasn't the aim. “We’re not trying to bankrupt coal companies because we know that’s a huge, like, multibillion dollar industry,” Saifuddin said. “What we’re trying to do is galvanize legislative restrictions.”
Saifuddin and other students who spoke during public comment called for further discussion about UC divestment in the future, with more student participation in the debate.
Stanford University remains the largest institute of higher learning to divest – its leaders voted to sell off coal holdings from its $19 billion dollar endowment earlier this year. About 11 other schools have divested in fossil fuels to some extent. The first on the west coast was Claremont’s Pitzer College.