Acting on a recommendation from a committee of faculty, students, and staff, Rutgers University said Tuesday it will take steps to divest its financial portfolio from coal, oil, and natural gas over the next decade and refrain from any future investments in them.
About $80 million, or 5% of the university’s $1.6 billion endowment, is invested in those so-called fossil fuels, the university said. Sixty percent of the investments are in private funds, and the university committed to divesting from those within the next 10 years, though board members said they expected it to happen sooner.
The rest are in public equity or fixed income accounts, and the school said it would exit those within a year and reinvest in “more environmentally friendly versions of those indices.” The university also committed to looking for new investments in renewable energy and energy-efficiency areas.
“This decision aligns with Rutgers’ mission to advance public health and social justice,” president Jonathan Holloway said in a statement, following a vote by the board of trustees. “While the university has taken steps recently to limit investments in this area, approving a policy of divestment from fossil fuels is a significant expression of the values of our institution and our broader community.”
Fossil fuel divestment has been a hot issue on college campuses, with groups of students and faculty concerned about the environment pushing for their schools to get out of the investments.
The University of Pennsylvania said a year ago that it had no direct investments in the thermal coal or tar sands industries and didn’t expect to put its money there in the future, a move that a student group hailed as a step in the right direction.
Johns Hopkins University, Middlebury College, Stanford University, and the University of California are among those that have divested from at least some fossil fuels. But others including Swarthmore College have declined to do so.
After a 32-day student sit-in, Swarthmore in 2015 announced it would not divest, citing investment guidelines that called for “the endowment to yield the best long-term financial results, rather than to pursue other social objectives.”
At Rutgers, the university said it will report on its divestment progress annually. Fossil fuel investments are considered to be any company involved in the exploration or extraction of the fuels or those that otherwise support the sector.
“The committee carefully considered the concerns of Rutgers community members along with the ethical and fiduciary responsibilities of the investment committee and the boards as we unanimously reached our recommendations,” Brian Ballentine, chair of the ad hoc committee and Rutgers senior vice president for strategy, said in a statement.