Stanford has become the first major U.S. university to divest its shares in coal-mining companies from its endowment funds, lending support to a growing nationwide movement calling for universities and pension funds to drop investments in fossil fuel companies.
Citing guidelines that allow trustees to weigh whether “corporate policies or practices create substantial social injury” when choosing investments for the university’s $18.7 billion endowment, the board decided, after five months of deliberation, to purge stakes in up to 100 companies worldwide that derive profits primarily from coal mining.
A Stanford spokeswoman said that coal companies constitute a small fraction of the university’s total endowment investments, “but a small percentage is still a substantial amount of money.” Board members said their decision was made partly because coal is the most carbon-intensive of any major fossil fuel and that less carbon-intensive energy sources are available.
The university also is not dependent on coal or coal-derived products. Other fossil fuels do not yet meet these standards, but those investments will likely be reviewed in the future, the university said. Advocates praise the move as a major milestone in the divestment movement and predict it will put pressure on other major universities to follow suit.