by Michael Wines, The New York Times, May 6, 2014
Stanford University
announced Tuesday that it would divest its $18.7 billion endowment of
stock in coal-mining companies, becoming the first major university to
lend support to a nationwide campaign to purge endowments and pension
funds of fossil fuel investments.
The
university said it acted in accordance with internal guidelines that
allow its trustees to consider whether “corporate policies or practices
create substantial social injury” when choosing investments. Coal’s
status as a major source of carbon pollution linked to climate change
persuaded the trustees to remove companies “whose principal business is
coal” from their investment portfolio, the university said.
Stanford’s
associate vice president for communications, Lisa Lapin, said the
decision covers about 100 companies worldwide that derive the majority
of their revenue from coal extraction. Not all of those companies are in
the university’s investment portfolio, whose structure is private, she
said. Over all, the university’s coal holdings are a small fraction of
its endowment.
“But a small percentage is still a substantial amount of money,” she added.
The
trustees’ decision carries more symbolic than financial weight, but it
is a major victory for a rapidly growing student-led divestment movement
that is now active at roughly 300 universities.
At
least 11 small universities have elected to remove fossil-fuel stocks
from their endowments, but none approaches Stanford’s prestige or
national influence. Tuesday’s decision seems likely to increase the
pressure on other major universities to follow suit.
Among
other universities, Harvard has resisted student pressure for
divestment, and one student was arrested on Thursday after
pro-divestment activists blockaded the entrance to the school’s
administrative offices.
Stanford’s
trustees acted after Fossil Free Stanford, the campus branch of the
movement, petitioned the board to re-evaluate the university’s holdings
in energy companies, Ms. Lapin said.
Yari
Greaney, 20, a Fossil Free Stanford organizer, said the group was “very
proud of Stanford taking this leadership position.” Nationally, leaders
of the divestment movement praised the school for its decision.
As
a global institution, Stanford “knows the havoc that climate change
creates around our planet,” Bill McKibben, the president and co-founder
of the environmental group 350.org, said in a statement. “Other forward-looking and internationally minded institutions will follow, I’m sure.”
Maura
Cowley, the executive director of Energy Action Coalition, an
assemblage of groups active on climate change issues, called the
decision “a huge, huge victory.”
“Their
decision, coming from such a major university and from such a huge
endowment, shows that the coal industry and other fossil fuel industries
are quickly becoming relics of the past,” she said in an interview.
The
trustees began studying divestment after Fossil Free Stanford
petitioned them to re-evaluate their holdings of energy companies. An
advisory panel that included students, faculty, staff and alumni spent
roughly five months studying the issue before recommending that coal
stocks be sold, Deborah DeCotis, the chairwoman of the board’s special
committee on investment responsibility, said in an interview.
Among
other deciding factors, Ms. DeCotis said, the panel noted that coal
produces the most carbon per British thermal unit of any widely used
fossil fuel, that practical alternatives to burning coal are available,
and that the university was not dependent on coal or coal-derived
products.
Other
fossil fuels did not meet some of those criteria, but “this is not the
ending point. It’s a process,” she said. “We’re a research institute,
and as the technology develops to make other forms of alternative energy
sources available, we will continue to review and make decisions about
things we should not be invested in. Don’t interpret this as a pass on
other things.”
Ms.
Lapin said the school is already asking its investment advisers to
review endowment holdings and sell stocks of coal companies. The order
covers mutual funds with coal stocks as well as investments in
individual companies, she said.
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