UC Is Now Largest University System in US to Divest From Fossil Fuels

Protesters carry signs as they march during the Youth Climate Strike on March 15, 2019, in San Francisco.  (Justin Sullivan/Getty Images)

After selling off more than $1 billion in assets over the last year, the University of California's investment portfolio is now completely divested of oil, gas and other fossil fuel companies, UC announced Tuesday.

While it is not the first educational system to completely rid itself of  fossil fuel investments, with about 285,000 students, it is the largest in the country to withdraw financial stakes in an industry that is the principal driver of climate change.

Richard Sherman, chair of the UC Board of Regents investments committee, said in a statement that the investment strategy includes a “hopeful view of the future.”

“As long-term investors, we believe the university and its stakeholders are much better served by investing in promising opportunities in the alternative energy field rather than gambling on oil and gas,” he said. 

Jagdeep Singh Bachher, UC’s chief investment officer, said in a statement that fossil fuel companies posed "an unacceptable risk" financially.

For years, the climate advocacy group 350.org and student activists have led a campaign aimed at cutting off financing to fossil fuel companies by encouraging universities and other big financial institutions to walk away from the oil, gas and coal industries. The group's slogan is “not a penny more."

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“Just amazing,” tweeted Bill McKibben, the founder of 350.org and a leader of the movement. “Univ of California system finishes its massive divestment from fossil fuels. Such thanks to all who made this happen”

Divestments from big institutions total more than $11 trillion, according to the campaign.

Fifty other colleges and universities have also divested, including California Institute of the Arts, Chico State University and the Peralta Community College District in California.

UC’s lead investors said in a Los Angeles Times op-ed published in September that the decision to divest was not driven by the demands of environmentalists or an effort to stave off the worst impacts of climate change.

Instead, they framed the decision as sound financial thinking based on “risk-averse” reasoning.

“Some might see our action as born of political pressure, or as green movement idealism or perhaps political correctness run amok,” they wrote. "So be it; we are part of a university system where diversity of opinion thrives.”

Since 2019, the university's shedding of $1 billion in fossil fuel assets has coincided with about the same amount of added investments in clean energy, mostly large-scale solar and wind projects.