The University of California Just Sold Off $200 Million in Fossil Fuel Investments

But it’s still a small fraction of the university’s overall investments in dirty energy.

Students involved in the Fossil Free UC campaign protest for divestment.Provided by Fossil Free UC


Environmentalists are celebrating after the University of California announced Wednesday that it had dumped $200 million worth of holdings in coal and tar sands from its massive investment fund.

Jagdeep Singh Bachher, the UC system’s chief investment officer, says the decision to sell off investments in some of the world’s dirtiest energy sources was based largely on economic considerations. Bachher cited huge declines in the coal industry and falling global oil prices, according to Reuters. Baccher added that “slowing global demand, an increasingly unfavorable regulatory environment, and a high threat of substitution pose insurmountable challenges to coal mining companies,” and that he worried about “sustainability issues” that are making oil sands investments risky, according to the Los Angeles Times.

Despite the announcement, there has been no official change in UC’s investment strategies, a university spokesperson told Reuters. That means the UC has no plans to get rid of their investments in other fossil fuels—natural gas and conventional oil—anytime soon.

Nonetheless, the news was immediately embraced by environmentalists as a big win for the divestment movement, a global campaign led by the group 350.org that is pushing major institutions to distance themselves—and their finances—from industries contributing to climate change.

“It is the largest university commitment pulling out of fossil fuels in the history of the campaign.”

“This is the first time that they are committing to do it, so it is massive—it is the largest university commitment pulling out of fossil fuels in the history of the campaign,” says Karthik Ganapathy, a 350.org spokesperson. UC has only divested from specific sectors three times before: from South African companies during apartheid, from businesses associated with the genocide in Darfur, and from tobacco companies. The school system has resisted fossil fuels divestment for years, despite ongoing student protests.

In reality, this sell-off represents a mere fraction of UC’s overall portfolio, which is valued at more than $98 billion, and it’s unclear whether it was related at all to the ongoing protests to get the university to divest. Klein told the LA Times that UC still has about $10 billion in energy industry investments, and has no plans to sell off any more.

As part of the divestment campaign, 350.org has teamed up with student groups on campuses who are taking a stand against their universities’ investment practices. Fossil Free UC, organized by students, faculty, and alumni of the UC system, has been involved since 2012. Over the past three years, student demonstrations have caused university officials to reevaluate how they were doing business, students say, and the group is now claiming some vindication.

“Students put this debate on the table,” said Avi Oved, a UCLA student who currently serves on the UC Board of Regents. The 22-year-old, who plays a role decision-making on the board, says Fossil Free UC paved the way for divestment discussions to take place.

“Students put this debate on the table,” said Avi Oved, a UC student regent.

After protests last year, UC set up a task force to investigate its investments. Though the board ultimately decided not to divest at that point, it did develop environmental, social, and governance standards that included issues like climate change, human rights, and ethics. These standards, Oved claims, helped lead to Wednesday’s announcement to ditch the coal and tar sands investments.

“These holdings were reducing in profitability, they were higher risk, and it made sense economically—as well as in the context of social responsibility—to sell them,” Oved said. “Now they are looking at the implications of carbon pricing on their holdings, and they are looking at conservation questions—even things like not investing in the gun industry.”

“There are no so many different degrees that they are taking under consideration, which were completely ignored in the past,” Oved added.

While the activists see Wednesday’s decision as a victory, they aren’t standing down. Jake Soiffer, a UC Berkeley junior who has been involved in Fossil Free UC since he first arrived on campus, says he plans to keep fighting the university’s investment practices.

“They have divested from coal and from oil sands, but the major players profiting off of environmental destruction in California are oil and natural gas. They haven’t done anything about those,” Soiffer said. “We need to be using the institutions we have access to as a platform for climate justice, and calling out the way a system has been set up to keep power in the hands of a few…and highlight how those few are wrecking our planet.”

More Mother Jones reporting on Climate Desk

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate