The University of California announced Tuesday that it has fully divested from all fossil fuels, the nation's largest educational institution to do so as campaigns to fight climate change through investment strategies proliferate at campuses across the country.
The UC milestone capped a five-year effort to move the public research university system's $126-billion portfolio into more environmentally sustainable investments, such as wind and solar energy. UC officials say their strategy is grounded in concerns about the planet's future and in what makes financial sense.
"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," Richard Sherman, chair of the UC Board of Regents' investments committee, said in a statement.
The movement against fossil fuels has mushroomed to encompass more than 1,100 faith, educational, government, corporate and nonprofit institutions with $14 trillion in assets in the last decade, according to 350.org, a global climate justice organization. Among them, more than 50 universities have committed to full or partial divestment.
In 2011, Hampshire College in Massachusetts became the first campus to shed its investment portfolio of fossil fuels. Since then, campus movements have increased, with Harvard faculty voting this year to support disinvestment and Georgetown University committing to completing it by 2030. Stanford University expects to make a decision on the issue by next month, a spokesman said.
At UC, students began organizing for divestment across all 10 campuses in 2012 and formed Fossil Free UC with staff, faculty and alumni. A major win came in 2017, when UC Santa Barbara Chancellor Henry Yang became the first campus leader to endorse divestment following a three-day occupation of the administration building, according to an account by two UC Santa Barbara students.
Last year, the UC Academic Senate overwhelmingly approved an appeal to regents to divest from fossil fuels, saying it would help "prevent an impending environmental catastrophe."
The UC action is groundbreaking, environmentalists said, because of the size of its investment portfolio and its massive teaching and research enterprise, which educates 285,000 students.
"It's the largest and one of the most recognizable universities in the nation" to divest, said Richard Brooks, a senior strategist with 350.org. "If they can do it, any other university can do it."
Sherman and Jagdeep Singh Bachher, UC's chief investment officer, announced the university's intention to go fossil free in an L.A. Times op-ed article last September. "Our job is to make money for the University of California, and we're betting we can do that without fossil fuels investment," they wrote.
In 2015, UC Investments published its first framework for sustainable investing that included environmental, social and governance goals. Three years later, the Board of Regents voted to include those goals in investment decisions. UC Investments' portfolio has grown from $91.6 billion in 2014, when Bachher took the helm, to $126 billion today.
Bachher announced Tuesday that UC has sold more than $1 billion in fossil fuel assets from its pension, endowment and working capital pools and surpassed its five-year goal of investing $1 billion in clean energy projects.
He said his team is convinced that investments in fossil fuels pose an "unacceptable financial risk," particularly with "geopolitical tensions and likely, a bumpy and slow global financial recovery in a post-pandemic world."
"While no one can know for certain how financial markets will perform, by examining the data and gauging potential risk, we have charted a long-term, sustainable course," Board Chair John A. Pérez said in a statement.