The University of California (UC) announced yesterday that it will completely divest its endowment and pension funds from the fossil fuel industry by the end of the month.
The UC system’s move towards fossil fuel divestment comes in the wake of a systemwide divestment movement and global youth activism raising concerns over the ongoing climate crisis. Activists across the UC system are organizing climate action marches on their respective campuses to demand further action on climate change.
In a Los Angeles Times op-ed, UC Chief Investment Officer (CIO) Jagdeep Singh Bachher and Chairman of the UC Board of Regents’ Investments Committee Richard Sherman said the decision is based on an analysis of financial risk and not necessarily influenced by political activism. Over the past six years, students, faculty, and some UC Chancellors have urged for divestment either through sit-ins, petitions, or letters.
At today’s finance committee meeting however, Bachher did credit student activists as the first to bring the financial risks associated with fossil fuel investment to his attention.
“Some might see our action as born [out] of political pressure, or as green movement idealism or perhaps political correctness run amok,” said Bachher and Sherman in the op-ed. “So be it; we are part of a university system where diversity of opinion thrives.”
According to Baccher and Sherman, the UC system had already been on the path to divest from fossil fuels. The UC system sold its coal and oil sands holdings four years ago, and they claimed that no new investments in fossil fuel companies had been made in the past five years, but The Triton was unable to confirm this. This left $150 million in the endowment fund invested in fossil fuels, which the UC system plans to sell by the end of this month. However, divestment activists counter that there has not been enough transparency to verify Bachher’s claims.
In 2017, Baccher stated that the Office of the Chief Investment Officer does not make blanket divestments. “We do not divest in our office,” Bachher said in a 2017 meeting regarding the UCOP’s gradual divestment from companies involved in the construction of the Dakota Access Pipeline, a decision Bachher also claimed was purely economic.
Students and faculty across the UC system have been advocating for divestment from fossil fuels since at least 2013 through the Fossil Free UC movement. Most recently, the UC Academic Senate, representing faculty from each of the ten UC campuses, submitted a memorial to the UC Regents at the Regents’ July meeting urging full divestment from fossil fuels.
UC San Diego professor and advocate for divestment Eric Halgren says that the news is evidence that financial considerations alone are enough to phase out fossil fuel investment.
“[Singh Baccher and Sherman] were careful to indicate that this was not a moral decision, but was a financial decision. And that is great because it means that even if you don’t care about other people or other species or about the future of our planet’s ecosystems, it doesn’t matter,” said Professor Halgren. “You should still divest because fossil fuels are a bad financial investment.”
While declaring victory, Fossil Free UC is continuing its push for the clarification and verification of the terms of divestment. The tentative victory still leaves unanswered questions, such as whether the announced divestment includes both direct fossil fuel investments and indirect investments such as bonds and companies that provide services to the fossil fuel industry.
Fossil Free Cal released an official statement in response to the op-ed, voicing their concerns about Baccher and Sherman’s claims that their divestment decision was made on purely financial grounds. They also stated that they will hold UC officials accountable for carrying out full divestment, demand transparency throughout the process, and ensure that the UC system does not invest in the fossil fuel industry again.
“Despite their best efforts, the Board of Regents and Mr. Bachher cannot ignore the moral and political implications of this decisive action,” Fossil Free Cal’s statement says. “Divestment is an incredibly powerful tool in reshaping the discourse around fossil fuels and decreasing their political, economic, and cultural hold on our society.”
Julianna Domingo is a Contributing Writer for The Triton. Mo Al Elew is a Senior Staff Writer for the The Triton.