Stanford votes to divest $18B endowment from coal

Source: Debra Kahn, E&E reporter • Posted: Thursday, May 8, 2014

Stanford University’s board of trustees voted yesterday to rid the university’s $18.7 billion endowment of any direct investments in coal-mining companies, a move that activists hailed as a harbinger for institutional investors.

The university will refrain from directly investing in about 100 public companies whose primary business is coal extraction and will get out of any such investments it currently has.”The university’s review has concluded that coal is one of the most carbon-intensive methods of energy generation and that other sources can be readily substituted for it,” Stanford President John Hennessy said. “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.”

The vote came at the behest of a student group, Fossil Free Stanford, that works with the climate activist group A campus referendum last month found 78 percent of undergraduates supported divestment.

A committee of faculty, staff, students and alumni considered the group’s petition from last year and concluded that there are alternatives to coal that are less environmentally harmful. The university’s policies allow trustees to take “substantial social injury” into account when making investment decisions.

In addition to divesting its endowment, Stanford will recommend that its external investment managers avoid coal companies. It won’t take any action on other forms of fossil fuels, including natural gas and oil.

Investments involved remain a secret

Students don’t actually know how much money Stanford has invested in coal or other fossil fuels.

“If we were with the University of California system, they have to disclose everything, but Stanford doesn’t have to, and doesn’t,” said Michael Peñuelas, a junior majoring in Earth systems who worked on the campaign.

“We’ll keep pushing,” Peñuelas said. “If enough substantial social injury is occurring from climate change as a result of coal combustion, then it makes sense to us that they would go ahead and divest from other fossil fuels because those are also responsible for driving climate change.”

According to, 11 other colleges and universities are pursuing fossil fuel divestment, including Hampshire College, Pitzer College and San Francisco State University. Stanford is so far the most prominent school to take a stand against fossil fuel investment.

“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,” said founder Bill McKibben. “Since it’s a global institution, it knows the havoc that climate change creates around our planet; other forward-looking and internationally minded institutions will follow, I’m sure.”