Student climate activists at Stanford University declared a sizeable, though not ultimate, victory on Tuesday after the prominent university's board of trustees announced it would wholly divest the school's holdings in the coal industry.
"Stanford’s decision is a clear testament to the power of the student movement for divestment and the broader movement to combat climate change." —Fossil Free Stanford
"Stanford University will not make direct investments of endowment funds in publicly traded companies whose principal business is the mining of coal for use in energy generation," the Stanford Board of Trustees declared in a statement.
“Stanford has a responsibility as a global citizen to promote sustainability for our planet,” said university President John Hennessy alongside the announcement. “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.”
In response, Fossil Free Stanford, the on-campus student group that has been calling on the university to fully divest from the fossil fuel industry, said the announcement is "a groundbreaking victory" for the climate movement. "Stanford’s decision is a clear testament to the power of the student movement for divestment and the broader movement to combat climate change," the group said.
“Now that one of the biggest endowments on earth has acknowledged that it can’t keep investing in climate change, others can follow," said Jay Carmona, a national organizer with 350.org, which helped launch the student-led divestment movement less than two years ago. "As Stanford students have said, this is a call to other college and university administrators across the nation to begin the divestment process in order to turn the tide on climate change. We’re looking forward to the day Stanford builds on this step and fully divests from fossil fuels.”
“Stanford, on the edge of Silicon Valley, is at the forefront of the 21st century economy; 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." —Bill McKibben, 350.org
And Bill McKibben, the group's co-founder and lead spokesperson, added: “Stanford, on the edge of Silicon Valley, is at the forefront of the 21st century economy; 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. Since it’s a global institution it knows the havoc that climate change creates around our planet; other forward-looking and internationally-minded institutions will follow I’m sure.”
According to the Stanford Daily:
As of August 2013, Stanford’s investment has a value of approximately $18.7 billion. While Stanford does not disclose specific investments or their value, the resolution stipulates that the University stop directly investing in approximately 100 publicly traded companies that focus on coal extraction and that it divest of any current holdings in those firms.
In addition to divesting any direct investments, Stanford is also recommending that its external investment managers, who invest in wide ranges of securities on behalf of the University, avoid investments in coal mining companies.
According to University spokesperson Lisa Lapin, Stanford will begin the divestment process immediately.
The students at Fossil Fuel Stanford said the decision is a "powerful illustration that America is waking up to the reality that continued large-scale combustion of coal is incompatible with a sustainable future."
The group credited anti-coal activists all over the country for setting the stage for their victory and also acknowledge that the larger fight against the fossil fuel industry remains.
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“We want to really celebrate this and put it in a bigger context than just a divestment campaign, because divestment is a strategy and fighting climate change is what we are working toward,” Yari Greaney, a junior at the school and organizer, told the school's newspaper, the Stanford Daily.
The fight will go on, said Greaney, who said the central goal remains Stanford's divestment from all fossil fuels.
“The entire fossil fuel industry is predicated on a business model that is incompatible with the climate and we will continue to ask that our administrators don’t fund an industry that pollutes our world,” Greaney said. “The Board seems open to further divestment so we’re excited to use this as a really strong and very powerful starting place.”
"In communities across America," the student group said in their statement, "local communities have stopped more than 150 coal-fired power plants and numerous mountaintop removal mining projects. Their relentless efforts have set the stage for divestment at Stanford and elsewhere. Together, the courageous organizers on the ground and the growing student movement against fossil fuels can guarantee coal’s necessary demise."
Echoing Greaney's balance of declaring victory and marching forward, the group's statement was careful to add that while it celebrates "Stanford’s decision to divest [from coal], we recognize that the battle to protect our climate is far from over."
As Gerard Wynn notes at the Responding to Climate Change (RTCC), decisions like Stanford's may not initially "move the needle on demand for or prices of shares in coal mining companies" or frighten other investors, but that "misses the point" on understanding Stanford's move as a serious victory. Wynn writes:
Universities can raise public awareness of reputation harm and so gradually reduce the attractiveness of companies to mainstream investors, who might incrementally extract a risk premium which in turn raised financing costs for such companies.
US universities were early actors in the anti-apartheid divestment movement which targeted companies active in South Africa and ultimately contributed to the downfall of the regime.
University divestment could therefore be an early step in the evolution of a wider campaign which can ultimately undermine an entire sector, argued a seminal report by Oxford University’s Smith School published last October.
And the New York Times adds:
[Stanford's] decision carries more symbolic than financial weight, but it is a major victory for a rapidly growing student-led divestment movement that is now active at roughly 300 universities.
At least 11 small universities have elected to remove fossil-fuel stocks from their endowments, but none approaches Stanford’s prestige or national influence. Tuesday’s decision seems likely to increase the pressure on other major universities to follow suit.
Among other universities, Harvard has resisted student pressure for divestment, and one student was arrested on Thursday after pro-divestment activists blockaded the entrance to the school’s administrative offices.