The University of California has divested nearly $200 million from coal mining industries and oil companies focused on tar sands. The decision came after years of student concerns and decreased demand in the coal and tar sands industries.
Over the past several months, the UC has been selling off approximately $200 million of direct holdings in coal and oil sands companies. The UC still has approximately $10 billion in various types of energy industry investments, roughly 10% of its nearly $100 billion investment portfolio, according to the Los Angeles Times.
The announcement was made on Sept. 9 by the UC’s Chief Investment Officer, Jagdeep Bachher, at the meeting of the UC Regents’ Committee on Investments. Bachher cited “slowing global demand [and] an increasingly unfavorable regulatory environment” as factors that pose “insurmountable challenges” to coal mining companies. Baccher also cited “sustainability issues” and the lowered profitability of companies focused on developing crude from oil sands as factors that have made these companies increasingly risky investments.
The divestment announcement came about a week after the California state legislature passed a bill, SB 185, to require the state’s two largest pension funds to divest from coal companies. The bill has been sent to Gov. Jerry Brown’s desk and is awaiting his signature.
The sell off did not come with any official change in the UC’s policy with regard to coal mining or oil sands companies. UC spokesperson Dianne Klein has said that the UC has no plans to extend the sell off into the University’s other energy investments, and that the UC is still free to purchase shares in these companies in the future if economic circumstances ever warrant it.
“It’s somewhat frustrating that they haven’t decided to go ahead and make it official policy,” said Fossil Free UCSB coordinator and global studies graduate student Theo LeQuesne. “But, at the same time, it’s very unlikely that they’ll be able to backtrack and reinvest in coal and tar sands.”
Fossil Free UC, a coalition of students, faculty, staff, and alumni from the entire UC system, has been a major force in the campaign to divest from energy industries. Since its inception in 2012, Fossil Free UC has been demanding that the UC divest all its holdings in fossil fuel industries. The decision by the UC to divest from coal and oil sands industries was met with both excitement and hesitation by the organization, who still sees the UC’s remaining $10 billion in various energy industry investments as an issue that needs to be addressed.
“The divestment from coal and tar sands has been something that we’ve really been pushing for, along with oil and gas…” LeQuesne said. “I don’t think that this first pass divestment should overshadow the fact that, in the long run, there are also oil and gas industries that need to be held accountable.”
Part of Fossil Free UC’s mission, aside from campaigning for divestment, is to campaign for reinvestment in “community oriented solutions” like investing in community energy and breaking up the monopolies held by the large energy industries. Fossil Free UCSB, the University of California, Santa Barbara chapter of the statewide organization, has organized demonstrations on campus to raise awareness about issues related to the fossil fuel industry, particularly in the wake of the Refugio Beach oil spill back in May.
“Part of the key of divestment is also reinvesting and making sure that universities change the way they invest so that ethics really become a central category by which they choose to invest in different industries,” LeQuesne said. “I think that makes industries more accountable to the people, and I think it prevents them from doing things like lobbying to ensure that their interests are heard over the interests of people like you and me.”