The growing fossil fuel divestment movement snagged what its proponents consider a significant victory as the University of California announced Wednesday that it had successfully purged its $200 million in coal and oil sands holdings.
"This is a huge, huge, huge win," said Karthik Ganapathy from 350.org, an environmental group that has supported divestment efforts nationwide. This "adds a lot of momentum to the divestment campaign and right when we need it."
This news came a week after the California legislature passed a bill mandating that the state's two major public pension funds, worth a combined nearly $500 billion, divest their less than one percent holdings in coal.
The University of California—one of the largest university systems in the world—is made up of 10 campuses and 238,000 students. The school's investment portfolio is made up of five funds totaling about $98 billion. School officials say all direct holdings in coal and oil sands have been sold from these funds, but the school's indirect holdings may still be tied up in such companies.
The school system's decision to divest was shared at a recent Board of Regents meeting by chief investment officer Jagdeep Bachher. "Slowing global demand, an increasingly unfavorable regulatory environment, and high threat of substitution pose insurmountable challenges to coal mining companies. We believe coal mining stocks will not see a sufficient recovery warranting investment for the foreseeable future," Bachher said, according to a transcript provided by the University of California's Office of the President.
Bachher added that oil sands were similarly "an increasingly risky investment."
Divestment activists said they were not aware the university system had been quietly divesting its holding in recent months, said Silver Hannon, a fossil free campaign director with the California Student Sustainability Coalition.
"However, it's not surprising news given the vast university-wide support for divestment from these companies and the continued pressure we've placed on the [University of California] over the last year," said Hannon.
Activists have been urging the University of California to divest for three years. Although happy with the recent news, they remain committed to pressuring the university system to also rid its portfolio of oil and natural gas assets.
The University of California schools join nine other colleges and universities in the state that have already divested or committed to doing so. The primary argument for divestment is laid out on the 350.org website: "If it is wrong to wreck the climate, then it is wrong to profit from the wreckage."