(May 7, 2014) — Stanford University announced its decision to divest from publicly traded coal companies following months of study over social and environmental implications.
The $18.7 billion endowment is the largest of a dozen schools already committed to rid investments in fossil fuel companies.
“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 university President John Hennessy in a statement. “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.”
The university said the decision is an official endorsement of the recommendation of Stanford’s Advisory Panel on Investment Responsibility and Licensing (APIRL), a panel consisting of students, faculty, staff, and alumni. The divestment is also in line with the endowment’s statement on investment responsibility allowing trustees to factor in “corporate policies or practices [that] create substantial social injury” as part of their investment decisions.
While the Stanford Management Company does not reveal the endowment’s specific investments or holdings, the university confirmed it will no longer directly invest in approximately 100 publicly traded companies with coal extraction as their primary business, and will purge any current holdings in these companies.
The movement was initiated by the student-led organization Fossil Free Stanford when it petitioned to the university to divest from 200 fossil fuel companies. The petition was reviewed by APIRL and, following its own extensive research, a recommendation was made to the board of trustees.
“Fossil Fuel Stanford catalyzed an important discussion, and the university has pursued a careful, research-based evaluation of the issues,” said Steven Denning, chairman of the Stanford board of trustees. “We believe this action provides leadership on a critical matter facing our world and is an appropriate application of the university’s investment responsibility policy.”
The board also adopted a mandate that the university approve proxy resolutions asking companies to “adopt sustainability principles, reduce greenhouse gas emissions, and increase the energy efficiency of their operations.”
“The board of trustees greatly appreciates the thoughtful work of the students and of the APIRL,” said Deborah DeCotis, chair of the trustees’ special committee on investment responsibility. “This is a considered approach that is consistent with our institutional values and acknowledges the critical sustainability challenges facing our planet.”
The news of Stanford’s divestment comes just days after a student was arrested at Harvard University during a protest over fossil-fuel holdings in the $32.7 billion endowment. Brett Roche, a junior, had participated in a seven-person blockade of President Drew Faust’s office. No charges were pressed and Roche was released the following morning.
Related Content: Harvard Endowment Commits to Responsible Investing, Report: Little Portfolio Risk in Dropping Fossil Fuel Holdings