The Clean Dozen
Last week, Stanford University announced that it would not make any direct investments in coal companies, making it the 12th U.S. college, and the most prominent, to eschew coal. While the university doesn't disclose its investment holdings, its endowment was worth $18.7 billion in 2013. The ban on direct investments applies to about 100 publicly traded companies for which coal extraction is their primary business. The university will divest itself of any current coal holdings.
While Stanford is obligated to maximize the financial return of its investments, natch, its Statement on Investment Responsibility, adopted in 1971, says that if the university’s trustees conclude that a company’s “corporate policies or practices create substantial social injury,” they may factor it into their decisions. "Stanford has a responsibility as a global citizen to promote sustainability for our planet,” said Stanford President John Hennessy. "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. 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."
Much credit for the move goes to Stanford’s Advisory Panel on Investment Responsibility and Licensing, composed of students, faculty, and staff, which conducted an extensive review of the impacts of fossil-fuel investments and recommended the changes to the Board of Trustees. The student group Fossil Free Stanford got the ball rolling last year when it petitioned the university to divest from 200 fossil fuel extraction companies. In a recent student referendum, 78 percent of students voted in support of divesting from fossil fuels. The group continues to push the university to divest from all fossil fuels, not just coal. (So far, Stanford is holding on to its oil and gas investments.)
"Stanford, on the edge of Silicon Valley, is at the forefront of the 21st century economy,” wrote Bill McKibben, Middlebury College professor and founder of climate activist group 350.org. “It's very fitting, then, that they've chosen to cut their ties to the 18th century technology of digging up black rocks and burning them."
image by iStock/JimFeliciano
Reed McManus is a senior editor at Sierra. He has worked on the magazine since Ronald Reagan’s second term. For inspiration, he turns to cartoonist R. Crumb’s Mr. Natural, who famously noted: “Twas ever thus.”