Editorial: UC should divest from fossil fuels, commit to sustainability
By Editorial Board
Sept. 15, 2014 3:49 a.m.
Divestment at the University of California has a greater meaning than whatever practical effects can be achieved by its implementation.
Fundamentally, it’s about furthering a moral goal that is more important in the long term than immediate donations or investment returns.
Yet despite student protests, the UC Board of Regents is expected Wednesday to vote to keep the University’s investments in fossil fuel companies for more immediate monetary payoffs. To offset this decision, the regents may invest $1 billion in companies that support sustainability over the next five years, in line with the UC Task Force on Sustainable Investing’s recommendation last week.
Instead of hypocritically choosing to promote “positive investment” in sustainability at the same time it puts $3 billion of its $91 billion portfolio into fossil fuel companies, the UC should divest from fossil fuels.
The monetary effects of the UC’s divestment from fossil fuel companies would be just a “pinprick” to those companies – the results of a “storm in a storm in a teacup,” according to UCLA finance professor and economist Ivo Welch. But divestment is about making a moral decision and a statement about principle, about what the UC stands for and prioritizes.
In their report last week, officials said divesting from fossil fuels could hurt programs for students at the University by losing millions of dollars in stocks.
Still, some other studies say it is unlikely that divestment will cost the UC a significant amount of money. Certain research firms have even found that universities could have made more in the long run if they divested a while ago, according to the Associated Press and a report from Fossil Free Stanford.
In a statement last week, UC chief investment officer Jagdeep Singh Bachher claimed “the University is not in the business of taking the easy route.”
But avoiding divestment by throwing about 1 percent of the UC’s portfolio at sustainability is the easy route.
What the regents aren’t saying publicly is how donors and other powerful friends of the UC will respond if it divests. In that sense, concerns about the UC losing money may be legitimate. But what are we willing to sacrifice to keep donors happy?
It’s important to be honest with students about decision-making, and it is also important to be honest internally. If the University is going to call itself a “living laboratory for sustainability” on brochures and say in speeches that “there is no reason the UC can’t lead the world in (the) quest” for sustainable technology, then divesting from fossil fuels is a given.
If there were no adverse consequences to divestment, the UC would do it in an instant. The regents made the right decision to divest from tobacco and guns years ago, and they have the potential to show students they are listening to them and are willing to stand by their beliefs this week.
