The UC system has sold $200 million worth of coal and oil-sands stocks, joining a small group of institutional investors working to cut carbon fuels from their portfolios.
The sale represents a sliver of the University of California’s overall pension and endowment-fund portfolio of about $100 billion, but it comes at a time when other investors are considering a reduction or elimination of stocks tied to carbon.
The Legislature last week sent Gov. Jerry Brown a bill, SB 185, that would require CalPERS and CalSTRS to dump their coal stocks. Brown has yet to act on the bill.
UC sold its stocks over a period of several months but didn’t disclose the sale until earlier this week at a meeting of the Board of Regents’ investment committee. University spokeswoman Dianne Klein said the sale doesn’t represent a “blanket disinvestment of fossil fuels,” but UC felt the stocks carried higher financial risks because of environmental concerns.
“The move is part of our new risk-review process that more comprehensively considers environmental sustainability, social responsibility and governance risks,” said the university’s chief investment officer, Jagdeep Singh Bachher, in an opinion piece published Thursday in the San Francisco Chronicle.
According to an audio clip released by 350.org, an environmental group, Bachher told the regents’ investment committee that his staff is taking a close look at its electric utilities stocks and how they could be affected by climate change.
“We are going to include a carbon price to our assessment of the financials and the viability of these companies,” he said.
UC’s decision comes about 18 months after Stanford University announced it would sell its coal stocks, citing the carbon content of coal. Earlier this summer, the Norwegian parliament directed the government to unload $8 billion worth of coal stocks.
A spokesman for the coal industry said UC is overlooking the industry’s work at reducing carbon emissions and other pollutants.
“They’re missing the boat in that sense,” said Jason Hayes, spokesman for the American Coal Council. “They should be supporting the coal industry.”
He noted that billionaire investor George Soros, known as an environmentalist, recently invested in coal stocks. “What’s going on at UC is behind the curve,” Hayes said.
Environmental groups, however, hailed the decision by UC.
“This is a major milestone for the divestment campaign that should help unleash a wave of new commitments,” said 350.org’s executive director, May Boeve, in a prepared statement.