UC regents support renewable energy but not coal and oil divestment
A UC regents committee decided Wednesday not to sell off stocks and holdings in oil, coal and natural gas from the university’s $91-billion endowment and retirement funds but moved to have environmental and social issues more deeply influence investment decisions.
The action disappointed student activists who had been pressing the university to divest its holdings in fossil fuel industries out of concerns that burning those fuels is hastening climate change. About 35 students at times stood up at the meeting holding orange signs declaring “Divest” but did not disrupt the meeting in San Francisco.
At the minimum, activists in the Fossil Free UC group wanted regents to commit to selling off the $500 million that officials estimate UC owns in various coal-related holdings. The activists contend it does not make financial or ecological sense to keep coal investments and noted that Stanford University recently decided to drop its coal holdings.
“Coal is not an investment but an indulgence,” third-year UC Berkeley student Michael Roe said during a public comment period.
UC regents and administrators said they are trying to balance the cause of climate change with the need to earn strong financial returns in the funds that support pensions, faculty chairs and scholarships. They estimated that about $10 billion of the $91 billion is in various direct and indirect holdings in fossil fuel and energy industries.
UC’s chief investment officer, Jagdeep S. Bachher, said the university needs a more “holistic approach” than divestment when applying environmental and social concerns to its portfolio. He presented a new report from a university task force on sustainable investment that calls for UC to invest $1 billion in renewable energy, energy efficiency and improved agriculture over the next five years.
The report also urges UC to sign onto United Nations-sponsored principles that apply issues of human rights, corporate corruption and industrial pollution to investment decisions.
The task force faced much debate in recent weeks about divestment, although its final report said that divestment could be looked at in the future. But the regents, worrying about rising retirement costs and limits on state revenues for UC, did not seem in the mood to drop lucrative investments any time soon.
Regent Charlene Zettel emphasized that most of the portfolio supports pensions and retirement savings plans. So, UC should “proceed judiciously and cautiously and be mindful of the promises and pledges” to retirees and those employees expecting to retire soon, she said.
The regents’ investment committee voted Wednesday to approve that task force report, and the full board of regents is expected to do so as well Thursday.
Over the last decades, UC has withdrawn funds from tobacco companies and those firms seen as aiding South African apartheid regimes and genocide in Sudan.
Beyond the Stanford move, Pitzer College, San Francisco State and two community college districts in Northern California are among about a dozen schools nationwide that have taken steps for fossil fuel divestment.
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