In the biggest achievement yet for the fledgling fossil fuel divestment campaign, Stanford University pledged on May 6 to divest its $18.7 billion endowment of coal mining assets. The move makes Palo Alto-based Stanford the first major American university to do so.
“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,” Stanford’s president John Hennessy said in a statement.
Universities have a fiduciary responsibility to ensure their endowment earns a return on investment, but Stanford said that divesting from coal still meets its internal guidelines. Trustees are permitted to take into account how a certain company can “create substantial social injury” through its operations. The university decided that coal, as one of the leading contributions to climate change, met those criteria.
Bill McKibben, founder of the climate-change awareness group 350.org -- a major driver of the divestment campaign -- praised Stanford in a statement. “Stanford, on the edge of Silicon Valley, is at the forefront of the 21st century economy. It's very fitting, then, that they've chosen to cut their ties to the 18th century technology of digging up black rocks and burning them,” he said.
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At least 11 smaller universities have pledged to divest from fossil fuels, and environmental advocates have active and ongoing campaigns in some 300 other schools. Stanford becomes the twelfth university to divest, but is by far the largest and most prestigious of the bunch.
The divestment campaign has had some success with municipal endowments as well, in Seattle, San Francisco and Portland.
Critics of divestment argue that pulling out money from fossil fuel companies would do next to nothing to reduce greenhouse gas emissions and such decisions are merely symbolic.
Recently, students at Harvard University blocked the office of President Drew Faust, demanding an open meeting on divestment. Harvard University has already rejected calls to divest from fossil fuels.
By Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com