Stanford University has decided to divest its $18.7 billion endowment from coal stocks in response to a student led movement – Fossil Free Stanford. This is part of a larger movement among students to get their colleges and universities to get rid of fossil fuel stocks. Fossil Free Stanford petitioned the university last year to divest from 200 fossil-fuel extraction companies as part of a national divestment campaign.
In their wisdom the Stanford Trustees limited their divestment activities to 100 fossil fuel corporations. Evidently, divesting of stocks in 200 companies was considered to be a little bit too extreme.
Surprisingly, Stanford, home to the right wing Hoover Institute, acceded to most of the students’ demands. The Hoover Institute is a think tank closely associated with Republican politicians and Presidents who have derived many of their policies from Hoover fellows including Condoleeza Rice who gave some intellectual credibility to George W Bush’s lies which enabled him to invade Iraq.
If an elitist institution like Stanford can become part of the climate change movement, perhaps there is hope for Harvard, the most richly endowed university in America with a $35 billion endowment, which so far has resisted demands that it divest from fossil fuel stocks.
The Boston Globe ran an opinion piece entitled: “Harvard should cut the hypocrisy and divest from fossil fuels” by Krishna Dasaratha a PhD student at Stanford University and a 2013 Harvard graduate. She said:
Even more disturbingly, Harvard is backing an industry that threatens to make our whole planet a scary place. In the words of ninety-three Harvard faculty who offered a dissenting position on divestment, “If there is no pressure [to decrease fossil fuel use], then grievous harm due to climate change will accelerate and entrench itself for a span of time that will make the history of Harvard look short.”
Since graduation, I have learned that my universities need not choose the wrong side of history. I urge Harvard, along with the hundreds of other colleges and universities grappling with fossil fuel divestment, not to finance the destruction of the world my generation will inherit.
Stanford, having become the first major university to do so, is delighted at the contrast between themselves and the apparent Neanderthals at Harvard! Acting on a recommendation of Stanford’s Advisory Panel on Investment Responsibility and Licensing, the Board of Trustees announced that Stanford will not buy any more coal mining company stocks and will get rid of the ones it already has in its portfolio. “Stanford has a responsibility as a global citizen to promote sustainability for our planet,” President John Hennessy said.
Score one for the students who will be inheriting this warming planet while Stanford’s trustees, professors and other eminence grises will probably not live to see the full havoc that climate change and global warming is in the process of wreaking. Most universities include a statement in their endowment management policies and guidelines that the only purpose of buying and selling in the endowment fund is to make money just like similar statements in most corporations’ mission statements. However, there is a loophole for Stanford.
Stanford’s Statement on Investment Responsibility, originally adopted in 1971, states that the trustees’ primary obligation in investing endowment assets is to maximize the financial return of those assets to support the university. However, when the trustees judge that “corporate policies or practices create substantial social injury,” they may include this factor in their investment decisions.
The trustees endorsed the recommendation of the university’s Advisory Panel on Investment Responsibility and Licensing (APIRL). This panel includes representatives of students, faculty, staff and alumni. They conducted an extensive review of the social and environmental implications of investment in fossil fuel companies, and guess what. They decided to do the right thing and get rid of fossil fuel stocks even if it might mean that therir $18 billion endowment fund might take a hit.
This decision on Stanford’s part is not totally altruistic. The smart money is saying that there will be a huge rise in alternate green energy sources and that fossil fuels might be headed for the dustbin of history if not now then maybe sometime in the near future. They’d better be if the planet is to remain inhabitable.
“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.”
Take that, Koch brothers! Guess they won’t be donating to the Hoover Institute any more.
“We are proud that our university is responding to student calls for action on climate by demonstrating leadership,” the Fossil Free Stanford group said in a statement. “Stanford’s commitment to coal divestment is a major victory for the climate movement and for our generation.”
Stanford is active on many fronts in addressing the challenges of global climate change so it would be a pity if, in its investment strategies, it were hypocritical to the point of investing in companies which are doing the opposite of what the professors in various departments are recommending. This includes work at the School of Earth Sciences, the Stanford Woods Institute for the Environment and the Precourt Institute for Energy among others.
Stanford faculty members have also played a key role in the U.N. Intergovernmental Panel on Climate Change (IPCC) process. But too often the right hand of investment strategy doesn’t know what the left hand of global warming research is doing.
Stanford is also doing some other good things. A new energy system that will reduce campus carbon emissions by 50 percent and reduce water use by about 15 percent above the 21 percent reduction Stanford had previously achieved is being implemented. Stanford also has reduced employee drive-alone rates from 72 percent in 2002 to 47 percent today, developed campus facilities with state-of-the-art energy features and launched an effort to accelerate water-recovery technologies.
In other developments Archbishop of South Africa, Desmond Tutu has called for divestment as well. “People of conscience need to break their ties with corporations financing the injustice of climate change,” the Nobel Peace Prize laureate wrote in an essay earlier this month. Tutu’s call to action also urges a strategy of divestment, the selling off of stocks and other investments in companies which are destroying the environment.
This week, Bill talks with two leaders who helped inspire the new fossil fuel divestment movement that Tutu is encouraging. Ellen Dorsey is executive director of the Wallace Global Fund and a catalyst in the coalition of 17 foundations known as Divest-Invest Philanthropy. Thomas Van Dyck is Senior Vice President – Financial Advisor at RBC Wealth Management, and founder of the shareholder advocacy foundation, As You Sow.
They are urging foundations, faith groups, pension funds, municipalities and universities to sell their shares in polluting industries and reinvest in companies committed to climate change solutions.
“The climate crisis is so urgent that if you own fossil fuels, you own climate change,” Dorsey tells Moyers. Van Dyck adds that reinvestment is needed to create “a sustainable economy that’s based on the energy of the future, not on the energy of the past.”
OK, UCSD, your turn!