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Stanford to divest from coal companies

Following small colleges, Stanford is nation's first large university to divest

Stanford University Tuesday became the nation's first large university to decide it will divest its endowment holdings in publicly traded companies whose principal business is the mining of coal for energy generation.

The resolution by the Stanford Board of Trustees followed a recommendation from the university's Advisory Panel on Investment Responsibility and Licensing, which spent several months reviewing the social and environmental implications of investment in fossil fuel companies.

"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 in a statement issued by the university.

"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."

Board of Trustees Chairman Steven A Denning said a student-led organization, Fossil Free Stanford, had "catalyzed an important discussion" on divestment, which the university followed up with a "careful, research-based evaluation of the issues.

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"We believe this action provides leadership on a critical matter facing our world and is an appropriate application of the university's investment responsibility policy," Denning said.

Stanford is the first large university to decide to divest its coal-extraction holdings, university spokeswoman Lisa Lapin said. With an endowment balance last reported at $18.7 billion, it is the nation's third-largest-endowed university, behind only Harvard and Yale.

Pitzer College in southern California announced in April its plan to divest its fossil-fuel holdings by the end of the year. Hampshire College in Massachusetts and Unity College in Maine also have committed to selling their coal investments.

Stanford investment decisions are guided by the university's 43-year-old Statement on Investment Responsibility, which says trustees' primary obligation is to maximize financial return to support the university. But the policy also authorizes them to take into consideration cases in which "corporate policies or practices create substantial social injury."

In Tuesday's decision, trustees concurred with the advisory panel that coal divestment was consistent with that policy given current availability of alternatives with less harmful environmental impacts.

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The decision means Stanford will not directly invest in approximately 100 publicly traded companies for which coal extraction is the primary business and will divest any current direct holdings in such companies. Stanford also will recommend to its external investment managers, who invest in wide rages of securities on behalf of the university, that they avoid investments in those public companies as well.

Fossil Free Stanford last year petitioned the university to divest from 200 fossil-fuel extraction companies.

"We are proud that our university is responding to student calls for action on climate by demonstrating leadership," Fossil Free Stanford said in a statement. "Stanford's commitment to coal divestment is a major victory for the climate movement and for our generation."

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Stanford to divest from coal companies

Following small colleges, Stanford is nation's first large university to divest

by / Palo Alto Weekly

Uploaded: Tue, May 6, 2014, 3:07 pm

Stanford University Tuesday became the nation's first large university to decide it will divest its endowment holdings in publicly traded companies whose principal business is the mining of coal for energy generation.

The resolution by the Stanford Board of Trustees followed a recommendation from the university's Advisory Panel on Investment Responsibility and Licensing, which spent several months reviewing the social and environmental implications of investment in fossil fuel companies.

"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 in a statement issued by the university.

"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."

Board of Trustees Chairman Steven A Denning said a student-led organization, Fossil Free Stanford, had "catalyzed an important discussion" on divestment, which the university followed up with a "careful, research-based evaluation of the issues.

"We believe this action provides leadership on a critical matter facing our world and is an appropriate application of the university's investment responsibility policy," Denning said.

Stanford is the first large university to decide to divest its coal-extraction holdings, university spokeswoman Lisa Lapin said. With an endowment balance last reported at $18.7 billion, it is the nation's third-largest-endowed university, behind only Harvard and Yale.

Pitzer College in southern California announced in April its plan to divest its fossil-fuel holdings by the end of the year. Hampshire College in Massachusetts and Unity College in Maine also have committed to selling their coal investments.

Stanford investment decisions are guided by the university's 43-year-old Statement on Investment Responsibility, which says trustees' primary obligation is to maximize financial return to support the university. But the policy also authorizes them to take into consideration cases in which "corporate policies or practices create substantial social injury."

In Tuesday's decision, trustees concurred with the advisory panel that coal divestment was consistent with that policy given current availability of alternatives with less harmful environmental impacts.

The decision means Stanford will not directly invest in approximately 100 publicly traded companies for which coal extraction is the primary business and will divest any current direct holdings in such companies. Stanford also will recommend to its external investment managers, who invest in wide rages of securities on behalf of the university, that they avoid investments in those public companies as well.

Fossil Free Stanford last year petitioned the university to divest from 200 fossil-fuel extraction companies.

"We are proud that our university is responding to student calls for action on climate by demonstrating leadership," Fossil Free Stanford said in a statement. "Stanford's commitment to coal divestment is a major victory for the climate movement and for our generation."

Comments

Praise-The-Brave-Stanford-Trustees--NOT!
Another Palo Alto neighborhood
on May 6, 2014 at 4:44 pm
Praise-The-Brave-Stanford-Trustees--NOT!, Another Palo Alto neighborhood
on May 6, 2014 at 4:44 pm
Like this comment

Oh .. how brave of the Stanford Trustees .. genuflecting to a group of students—most of which are not even graduates, and most of whom are unlikely to understand the issues facing the nation when it comes to energy production, prosperity and national defense.

Got to wonder if this student group will be calling for the banning of the use of all fossil fuel vehicles on the Campus, and off? Got to wonder how many of the Stanford trustees are about to give up that cars, planes, boats and big houses just to placate a few students who won’t be on campus in a year or two.

There is a lot of electricity on the Grid that is generated by coal and gas—all carbon-based fossil fuels. Let’s see Stanford take a vow to not allow any electricity, or gasoline on the Campus. Let’s see how many of these students take a vow not to own, or even ride in, any vehicle that has any carbon-based product, in it (like carbon steel)—or uses any carbon-based fuel.

Let’s see how far these yahoos are willing to go before they realize that they can’t stop using, or generating, carbon.


MrRecycle
Duveneck/St. Francis
on May 6, 2014 at 5:41 pm
MrRecycle, Duveneck/St. Francis
on May 6, 2014 at 5:41 pm
Like this comment

The pain of this decision ultimately will fall on the poor coal mining families in places like West Virginia.


WilliamR
Fairmeadow
on May 6, 2014 at 7:10 pm
WilliamR, Fairmeadow
on May 6, 2014 at 7:10 pm
Like this comment

How does divestiture like this affect the coal companies? If the companies are publicly traded, Stanford is just selling its shares, which someone else will buy. The coal companies don't see any direct loss. If Stanford wants to make a statement that they don't want to profit from these types of investments, that's OK, but beyond that, I don't see how divestiture has any real effect.


100% bicycle commuter
Barron Park
on May 6, 2014 at 7:49 pm
100% bicycle commuter, Barron Park
on May 6, 2014 at 7:49 pm
Like this comment

@MrRecycle: As @WilliamR pointed out, selling shares won't have a direct effect on coal workers. However, your point in the larger context of trying to switch from coal to cleaner sources of energy is a very important one. That's why a lot of environmental advocates want to use retraining programs and responsible regulation to make sure that workers can transfer to emerging, cleaner energy industries instead of being abandoned by large corporations worried only about their bottom lines. (That aside, for now coal companies are selling to foreign markets so they can keep using their mines.) It's not the change in energy source, but our country's basic negligence in making sure that hard-working people can get jobs, that will be the problem (and has been the problem in other sectors for years now) if we don't work actively to prevent it.


laurie
another community
on May 7, 2014 at 5:03 am
laurie, another community
on May 7, 2014 at 5:03 am
Like this comment

Good for Stanford! Now if only the US government would stop subsidizing the fossil fuel industry to the tune of billions when they make billions in profit.
Are Americans FINALLY waking up to the fact that global warming is here and kicking our butt? I read the comments here and I just see corporate shallowness.
Maybe next Stanford will dump the war criminal Condi....


businessdecision
Menlo Park
on May 7, 2014 at 7:33 am
businessdecision, Menlo Park
on May 7, 2014 at 7:33 am
Like this comment

The main driver of what happens today - how it makes people feel about themselves.


curmudgeon
Downtown North
on May 7, 2014 at 9:44 am
curmudgeon, Downtown North
on May 7, 2014 at 9:44 am
Like this comment

"The main driver of what happens today - how it makes people feel about themselves."

- Plutarch


resident 1
Adobe-Meadow
on May 7, 2014 at 12:24 pm
resident 1, Adobe-Meadow
on May 7, 2014 at 12:24 pm
Like this comment

As a side note to coal - it is going to be mined in Montana then taken by train to Oregon - at which point it is going to be barged down the Columbia River to the Portland area and shipped to China. This is a big controversy - of course - the number of barges is going to be many. The risk to the Columbia River great - it is for fisheries and the major water distribution for the agriculture in the area.
Why and how our US Government allows this type of mining and sale of our resources with the high risk in the shipping is wrong.


Anonymous
Another Palo Alto neighborhood
on May 7, 2014 at 12:51 pm
Anonymous, Another Palo Alto neighborhood
on May 7, 2014 at 12:51 pm
Like this comment

It's a little late because natural gas has knocked the bottom out of the demand for coal. If the U.S. lifts its ban on exporting liquified natural gas maybe the market will recover a little. Coal extraction is basically a bad investment because their business is being displaced with cheaper natural gas.


Howard Hoffman
South of Midtown
on May 7, 2014 at 3:53 pm
Howard Hoffman, South of Midtown
on May 7, 2014 at 3:53 pm
Like this comment

This is great news. There are a lot of people who still are in denial about Anthropogenic Global Warming and there is a lot of money being spent by fossil fuels interests in maintaining a disinformation campaign about the issue. Stanford's action hopefully leads more universities to follow. All of this shows that people who know what they are doing are moving away from coal. Disinvestment helps to lower the stock price and this sends a clear message to the companies. Eventually, the US government will need to take some decisive action, like taxing carbon, which would be the most effective thing it could do.


Finally!
Professorville
on May 7, 2014 at 5:33 pm
Finally!, Professorville
on May 7, 2014 at 5:33 pm
Like this comment

Glad to hear of Stanford finally doing something of moral rectitude!


businessdecision
Menlo Park
on May 8, 2014 at 8:03 am
businessdecision, Menlo Park
on May 8, 2014 at 8:03 am
Like this comment

You might want to read in today's Stanford Daily
Divesting from coal: good intention, bad decision By: Op Ed May 8, 2014


Name hidden
Palo Alto Hills

on Jun 5, 2017 at 6:12 pm
Name hidden, Palo Alto Hills

on Jun 5, 2017 at 6:12 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


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