The University of California (UC) has sold off over $200 million in assets tied to coal and oil sands companies, handing a victory to students and other activists who have called for the school to divest from fossil fuels.
The sale, announced at this week’s meeting of UC’s investment committee, still leaves the UC system with substantial fossil fuel investments, as the school still has holdings with oil and natural gas firms. Jagdeep Singh Bachher, UC’s chief investment officer, says tougher regulations and slowing global demand made the risk of holding those assets no longer worthwhile for the school.
Bachher said selling off all fossil fuels at this point would be utterly foolish.
“The world is not switching out of fossil fuels,” he said Thursday, according to the Los Angeles Times.
Still, Bachher admits that “environmental sustainability issues” played a substantial role in the decision to sell, tipping the scales so that the level of risk was seen as outweighing the potential financial benefits.
As a result, student activists are claiming victory.
“This is a big deal and an important first step,” Alden Phinney, a member of the Fossil Free UC organization, told the Los Angeles Times. Another member of the group, Jake Soiffer, told The Daily Californian that the move is a big victory because, having sold its assets, it is extremely unlikely the school would ever be able to reinvest in coal or oil sands because of the wave of student outrage it would produce.
Avi Oved, a student at the University of California, Los Angeles, who serves as a student trustee for the UC system, credited student protesters with “put[ting] this debate on the table.” He told Mother Jones magazine that UC’s sustainable investment standards, adopted under student pressure last year, played a key role in the decision to divest.
Students, faculty, and politicians have been pressuring the UC system for some time to join the divestment movement against fossil fuels. The school has previously divested from apartheid-era South Africa, tobacco companies, and Sudanese companies linked to conflict in the Darfur region.
Divesting from fossil fuels is a far more ambitious proposition than earlier campaigns, though, as energy assets constitutes nearly 10 percent of the school’s endowment and pension funds.
UC’s decision comes one year after Stanford University made a similar move, selling off all its investments in coal mining operations. It also comes one week after the California State Assembly passed a bill that, if it becomes law, would require two major California pension funds to sell all of their coal assets.
Still activists say even total divestment from fossil fuels won’t be enough to satisfy them.
“If the regents are serious about climate solutions that means not just divesting from fossil fuel companies, but investing in a just transition away from fossil fuels and towards the non-extractive economy,” Fossil Free UC’s Victoria Fernandez said in a statement. “There is no stopping this movement. We have glimpsed a future of dignity, justice and sustainability, and we are determined to make it real.”
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