It doesn’t make sense for the University of California to hold millions of dollars of stock in the fossil fuel industry and at the same time espouse a goal of carbon neutrality by 2025. Students at UC Berkeley and throughout the UC system have demanded that the Regents vote to divest from their stock in fossil fuel companies. On Sept.17, 2014, the Regents ignored their wishes.
In a hasty process involving only four one-hour meetings over the summer, a task force on Fossil Fuel Investments/Sustainable Investing, comprised of staff, Regents, two students, faculty and investment advisors made its recommendation to the Committee on Investments at the Regents Meeting at UCSF. Against the students’ wishes, divestment was not included in the recommendation. Only at the last minute, at the insistence of Fossil Free UC and its supporters, was language against divestment taken out of the recommendation.
The University of California holds $3 billion in the top 200 dirtiest fossil fuel companies out of a $90 billion endowment. One-half billion dollars of that is in coal, an “asset” that has been dropping in value.
UC’s new Chief Investment Officer, Jagdeep Bachher, said in his report that the university needed to stay positive and proactive in its strategy regarding climate change. But is holding $3 billion stock in fossil fuel companies being positive and proactive? Stanford University’s Board of Trustees voted to divest from coal in May, 2014.
The Regents did agree to invest $1 billion over the next five years in “solutions,” such as renewable energy. They will also establish a framework of ESG (environmental, social and governance) principles to guide investments. An ESG framework without divestment from fossil fuels, the very source of the problems, has no teeth.
While they gave lip service to include students in an ongoing process by the Committee on Investments to consider divestment, they ignored the student Regent’s (Sadia Saifuddin) efforts to add specific language that would commit the Regents to including students in the process.
The Task Force over the summer was a frustrating process for Virginia Fernandez and Alden Phinney, the students who were appointed to it. Meetings were sometimes held without much advance notice and the third meeting was held without the students present.
Even though the numbers run by the Task Force showed the UC would not lose money by divesting, Mr. Bachher stated at the Regents Meeting that divestment would cost the UC money.
A second reason against divestment brought up by the Task Force was that it wouldn’t affect climate change. We know divestment has been an effective tool regarding issues such as apartheid, tobacco and Sudan, all of which the UC has taken a position on in the past by divesting. Though divestment isn’t an end in itself, it is a tactic that facilitates more substantive changes.
The students won’t be letting go of the issue of climate change and the power that the UC could have by leading the charge on divestment of fossil fuel holdings. They know it’s their future.