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Saturday, April 20, 2024

UC is largest educational institution in nation to divest completely from fossil fuels

UC sells more than $1 billion in assets from pension, endowment, working capital pools to divest completely from fossil fuels

After a five-year effort to move the UC’s $126 billion investment portfolio toward more environmentally sustainable sources, the UC Office of the Chief Investment Officer of the Regents announced on May 19 that the final $1 billion of the UC’s investment portfolio in fossil fuels was sold. 

In working toward the sustainable investment goal, Jagdeep Singh Bachher, the UC’s chief investment officer, also announced that the UC had surpassed its goal of investing $1 billion into “promising clean energy projects.”
“Today we remain convinced that continuing to invest in fossil fuels poses an unacceptable financial risk to UC’s portfolios and therefore to the students, faculty, staff and retirees of the University of California,” Singh Bachher said.

With the divestment, the UC has secured its place as the largest educational institution in the nation to divest completely from fossil fuels. 

This comes eight years after students, staff, faculty and alumni first began organizing for Fossil Free UC in 2012. 

Even as recently as 2018, real change felt distant and unobtainable, according to UC Davis alum Evan Steele, who was an environmental policy and planning major and advocated for Fossil Free UC. 

“My experience working [in] Fossil Free UC Davis was very frustrating, it kind of led me to the belief that not much was going to happen quickly,” Steele said. 

Steele and others involved with the Fossil Free UC Davis movement arranged a meeting with UC Regent Richard Sherman, the chair of the UC Board of Regents’ Investments Committee, after a several-day sit-in at Mrak Hall in protest of the UC’s investments. 

“[Sherman] sidestepped all our questions and it seemed like he had only accepted the meeting to basically waste our time and get it to end our sit-in,” Steele said. 

Yet four years prior, in 2014, the UC had already begun to discuss and integrate environmental, social and governance (ESG) factors into investment decision making and committed to “Evaluate all strategies for achieving ESG goals as soon as practical, including whether to use divestment,” among other things, leading to its eventual complete divestment from fossil fuels.

“As long-term investors, we believe the university and its stakeholders are much better served by investing in promising opportunities in the alternative energy field rather than gambling on oil and gas,” Sherman said.

Steele took issue with some of the reasoning behind the recent divestment, given that much of the language used by the investments committee, Regents and the chief investment officer centered around financial risks and serving stakeholders rather than the principle of protecting the environment and serving future generations of UC staff, students and faculty.

“If you believe [the researchers at the UC] and all their research, it’s not a gamble,” Steele said. “It’s [an inevitability] that renewable and alternative energies are the future.”

Steele also recognized that not all investments in alternative or renewable energies are created equal, saying that just because something is “under the label ‘alternative energy’ or even ‘renewable energy’ or ‘green energy’” does not necessarily mean “it’s totally good for the environment and people.”

The “UC Investments’ commitment to clean energy now stands at $1.036 billion, with the lion’s share — $750 million — allocated to two best-in-class, utility-scale wind and solar developers, and an aggregator strategy to own and operate commercial and industrial solar opportunities,” according to a press release from the UC Office of the President (UCOP). 

UCOP’s Senior Communications Strategist Stett Hollbrook commented on the UC’s unique responsibility to climate action as one of the nation’s largest, most prestigious and forward thinking universities. 

“Universities in particular have a responsibility to translate their research findings into technologies and solutions that benefit the public good,” Hollbrook said. “These commitments will better bridge the gap between the latest academic findings on climate and on-the-ground actions that universities and communities can take to advance sustainability at home.”

Written by: Jessica Baggott — campus@theaggie.org


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