University of California Sells $200 Million Fossil Fuel Holdings

Back Bloomberg Sep 15, 2015 By Janet Lorin & Lauren Streib

The University of California system, with $98.2 billion in holdings as of June 30, including retirement and endowment assets, sold $200 million in coal and oil sands company investments.

The system’s action is the largest in the U.S. divestment movement to date, according to the activist group 350.org. Stanford, Oxford and Georgetown universities have promised to shed investments in coal in their endowments, but had few holdings to sell.

The selloff was announced Wednesday by Jagdeep Singh Bachher, chief investment officer of the regents, at a meeting of the investment committee.

“We’ve gone one step further as part of our housekeeping and managing risks over the course of the year and selling our direct holdings, to reiterate, in coal companies, oil sands-focused companies and specifically spend a fair amount of time looking at water as we think about agricultural land,” he said at the meeting, according to a recording.

Students representing the university’s 10 campuses have protested and collected petitions urging the school to divest from fossil fuels that include coal and oil sands, a mix of sand, clay, water and a heavy oil called bitumen. Fossil Free UC, a coalition of students, faculty, staff and alumni has asked the university to adopt a five-year plan to freeze new fossil fuel investments.

“It’s an epic moment in this campaign — a portfolio three times the size of Harvard’s endowment, representing the greatest public universities in the nation, starting down the right path,” Bill McKibben, co-founder of 350.org, said in an e-mail. “California students, wondering what their leaders are up to amidst the devastating drought, have reason to be pleased and hopeful.”

UC holds about $10 billion in different types of energy industry investments, about 10 percent of the system’s total portfolio, said Steve Montiel, a spokesman for the UC system. There are no plans to extend the sell-off into oil and natural gas, he said.

“It is not a blanket divestment from fossil fuels,” he said.

Last week, California lawmakers approved legislation requiring the California Public Employees’ Retirement System, the largest U.S. pension, and the California State Teachers’ Retirement System to divest from companies that receive at least half their revenues from coal mining.

The regents’ endowment was valued at $8.9 billion as of June 30. The system returned 7.2 percent for the year, beating its benchmark of 3.5 percent.