The University of California system has decided to drop all fossil fuel investments from its US$13.4-billion endowment and its $70-billion pension fund.
The decision came after an historic faculty vote across the sprawling, 10-campus system, Chief Investment Officer and Treasurer Jagdeep Singh Bachher and investments committee chair Richard Sherman wrote in a post for the Los Angeles Times earlier this month.
“We believe hanging on to fossil fuel assets is a financial risk,” they wrote. “That’s why we will have made our $13.4-billion endowment ‘fossil free’ as of the end of this month, and why our $70-billion pension will soon be that way as well.”
Teachers, along with a vocal student movement, “have said to the UC Regents that dumping the oil and gas holdings represents an ethical obligation in the age of climate change,” notes the Institute for Energy Economics and Financial Analysis. “They also argued that investing in fossil fuel companies has become increasingly risky because extractive activities will likely, and perhaps abruptly, be significantly restricted in the future to limit damage to the environment.”
As recently as August, Sherman wasn’t sold on the stranded asset risk in fossil investment, arguing that divestment would violate the university system’s “fiduciary duty”.