8 May 2014 — Stanford University has announced it will no longer invest in coal, banning direct investment in around 100 publicly traded companies, and divesting current holdings worth around $18.7 billion.
The announcement followed a recommendation by Stanford’s advisory panel on investment responsibility and licensing, after a student-led divestment campaign requested the university remove investment in 200 fossil-fuel extraction companies.
The Board of Trustees said the university would no longer use endowment funds in publicly traded companies whose principal business was the mining of coal for use in energy generation.
The trustees’ primary obligation in investing endowment assets is to maximise financial returns, however investment decisions can also factor in “corporate policies or practices [that] create substantial social injury”.
The board agreed that divesting from coal was consistent with the policy given the alternatives available to coal.
“Stanford has a responsibility as a global citizen to promote sustainability for our planet, and we work intensively to do so through our research, our educational programs and our campus operations,” said Stanford president John Hennessy.
“The university’s review has concluded that coal is one of the most carbon-intensive methods of energy generation and that other sources can be readily substituted for it. Moving away from coal in the investment context is a small, but constructive, step while work continues, at Stanford and elsewhere, to develop broadly viable sustainable energy solutions for the future.”
Student divestment campaign gets results
The move follows a student-led divestment campaign that petitioned the university to divest from 200 fossil-fuel extraction companies as part of a national divestment campaign.
The group’s request was reviewed by a subcommittee and subsequently approved.
“Fossil Free Stanford catalysed an important discussion, and the university has pursued a careful, research-based evaluation of the issues,” Steven Denning, chairman of the Stanford Board of Trustees, said. “We believe this action provides leadership on a critical matter facing our world and is an appropriate application of the university’s investment responsibility policy.”
The student group said it was proud the university had listened to and responded to its campaign.
“Stanford’s commitment to coal divestment is a major victory for the climate movement and for our generation,” a Fossil Free Stanford group statement said.
Stanford does not disclose specific investments nor their individual value, though does provide information on endowment holdings by broad asset category. The total value of the endowment was $18.7 billion as of 31 August 2013.
Stanford’s on campus sustainability efforts
Stanford University is also acting on climate change with the Stanford Energy System Innovations, a new energy system that is estimated to reduce campus carbon emissions by 50 per cent and reduce water use by about 15 per cent. It also features high performance buildings including the Knight Management Center and the Jerry Yang and Akiko Yamazaki Environment and Energy Building.
Australian universities ignoring the climate
In Australia, recent revelations found the major Group of Eight universities were stymying efforts to have them reveal investment in companies fuelling climate change. The ABC’s Lateline program revealed the universities may have been colluding to avoid scrutiny.
See our articles:
- Monash denies colluding to keep climate investment risk a secret
- Universities fail the climate risk management test