Stanford University announced on Tuesday that it would no longer make direct investments in coal companies.
The university’s Board of Trustees convened for a special vote to adopt a recommendation from a panel of students, faculty and staff members, and alumni that had spent the last several months reviewing the social and environmental implications of investment in fossil fuels.
The panel’s recommendation to divest from “publicly traded companies whose principal business is the mining of coal for use in energy generation,” according to a press release, makes Stanford the most prominent American university to take such a step.
But the board’s decision also reflects the nuanced approach with which colleges are increasingly parsing the challenge of meeting student and faculty demands, fulfilling social and institutional mandates, and maintaining fiscal responsibility when it comes to divestment from controversial industries.
John L. Hennessy, Stanford’s president, said in a written statement that moving away from coal investments was a “small but constructive step” for the university to take in its efforts toward larger energy solutions.
“Stanford has a responsibility as a global citizen to promote sustainability for our planet, and we work intensively to do so through our research, our educational programs, and our campus operations,” Mr. Hennessy said. “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.”
According to data from the 2013 Nacubo-Commonfund Study of Endowments, Stanford’s $18.69-billion endowment was the fourth-largest among colleges and universities in North America. Stanford does not disclose details of its holdings.
Krishna Dasaratha, a Ph.D. student in mathematics at the university who is a member of the student group Fossil Free Stanford, called the board’s decision “fantastic,” and added that he and his fellow advocates were “very proud of the university for being one of the first schools to divest in coal.”
“We think this is a necessary and important step in fighting climate change,” Mr. Dasaratha said.
But he noted that Fossil Free Stanford had originally called for the university to divest from both coal and oil companies. Asked if he considered the move the institution announced on Tuesday a half-step in some respects, he said, “You could say that.”
Other Campaigns
Fossil-fuel divestment campaigns have sprung up on hundreds of campuses across the country in recent years, but have met with limited success. Institutions such as Unity and Pitzer Colleges have divested from fossil fuels. Bowdoin College and Brown and Harvard Universities, among others, have declined to.
Mr. Dasaratha was a veteran of the fossil-fuel divestment campaign at Harvard as an undergraduate there before he came to Stanford last year, and he was among the students and faculty members who petitioned Stanford’s board to divest this past fall.
The petition was passed along to the university’s Advisory Panel on Investment Responsibility and Licensing, a group of faculty members, staff members, students, and alumni who report to a special committee of the Board of Trustees. Beginning in October of last year, the panel researched and considered the issue before delivering in April a recommendation to divest from coal companies. Since the board does not have a full meeting in May, it convened a special meeting on Tuesday to vote on the matter, in advance of its next scheduled meeting, in June.
“Because the issue is so important, we didn’t want to wait,” said Susan L. Weinstein, the university’s assistant vice president for business development and a member of the advisory panel. In addition, she said, Fossil Free Stanford had been “very diligent in keeping us moving forward on it, and we wanted to be responsive to their timetable as well.”
The decision to divest from coal companies, but not oil companies, came down to a consideration of the realities of current energy options and the charge of the university’s 1971 Statement of Investment Responsibility. While all fossil-fuel emissions “significantly contribute” to global climate change, Ms. Weinstein said, “there are not very many alternatives” to petroleum.
“Coal, by contrast, is one of the most carbon-intensive methods of energy generation,” she said, “and we do have other less carbon-intensive alternatives"—in particular, natural gas, which burns more cleanly than coal and is currently in abundant supply.
The university’s investment guidelines state that trustees can make investment decisions when “corporate policies or practices create substantial social injury.”
“We felt that it would be hard to claim that you could just get out of the fossil-fuel business entirely,” Ms. Weinstein said, “but we did believe that there was a social benefit to moving away from coal at this point.”
Such deliberate decision-making has marked many colleges’ recent divestment debates. Pitzer College’s decision to divest from all fossil fuels, announced last month, was arrived at after a lengthy debate and much institutional soul-searching, and led to a larger commitment to sustainability at the institution.
In the case of another controversial commodity, tobacco, the University of Pennsylvania’s president, Amy Gutmann, opposed a proposal this year for Penn to divest from cigarette companies because tobacco did not constitute “a moral evil"—a condition that factored into Penn’s 2006 decision to divest from oil companies operating in Sudan, in response to a genocide in Darfur.
But tobacco, Ms. Gutmann said, did not violate the university’s investing guidelines. Penn’s Board of Trustees is scheduled to vote in June on divestment from tobacco companies.
A Game-Changer?
The colleges that divested from fossil fuels before Tuesday were smaller institutions with relatively modest endowments at stake. Stanford’s international prominence and wealth make its commitment to divesting from coal a potential game-changer. Bill McKibben, founder of 350.org, an advocacy group that confronts climate change and has encouraged divestment drives at universities, praised Stanford’s decision in a written statement and added that “other forward-looking and internationally minded institutions will follow, I’m sure.”
Ms. Weinstein played down any activism in the board’s vote. Encouraging other colleges to divest “wasn’t part of our agenda,” she said. “We really made the correct decision for Stanford. It’s up to every institution to make its own decisions on these kind of issues.”
Mr. Dasaratha said he was “optimistic now that Stanford has taken the lead.”
“We’ll continue our campaign,” he said, “and we’ll be continuing to address climate change, but for the moment we want to celebrate Stanford’s decision.”
Correction (5/13/2014, 5:19 p.m.): This article originally reported incorrectly that Ithaca College had divested from fossil fuels. It has not, and the article has been updated to reflect this correction.
