After eight months of research, deliberation, discussion and numerous town halls, the Academic Senate Ad Hoc Committee on Divestment and Strategic Reinvestment Investigations has published a preliminary draft report detailing recommendations for the University of Utah to divest its holdings in the fossil fuel industry and reinvest in renewable resources. The 67-page preliminary draft report is now available here. The U community is welcome to submit comments on the report here or at a town hall meeting on April 12 from 12-1 p.m. via this Zoom link.
The report and its preliminary recommendations will be considered by the Academic Senate on Apr. 26, 2021, and by the Board of Trustees at a yet-to-be-determined date.
“We wanted to start with a preliminary draft so that we could continue to gather feedback from all perspectives at the U on this topic, rather than defending a position,” says Allyson Mower, committee chair. “Our shared governance culture at the U means the Academic Senate, the administration and the Board of Trustees all participate together in making decisions about the future of this institution. We all hold a stake in it and want it to succeed.”
What is divestment?
Divestment, in this context, would mean selling the university’s investments in companies that produce or sell fossil fuels. Following a number of other universities choosing to divest, the U’s Academic Senate investigated the issue in 2016. At that time, the Board of Trustees chose not to pursue divestment. Calls for divestment from ASUU and the U Staff Council, however, spurred the formation of the current committee in summer 2020, which is composed of eight faculty, five staff and three students.
The committee’s report, when finalized, will be submitted to the Board of Trustees. The Board of Trustees is responsible for approving investment policies of the University of Utah. The Investment Management Office is responsible for carrying out the day-to-day management of the investment program in conjunction with the university’s Investment Advisory Committee.
What would be divested?
The preliminary recommendations cover actions that could be taken concerning the U’s endowment pool, a portfolio worth more than $1 billion that is invested diversely in stocks, private equity, hedged equity, and bonds. Because of the diversity of investments (including pooled mutual funds managed independently) and the frequency with which the investments are rebalanced, it’s difficult to calculate, the report says, how much of the endowment pool is in fossil fuels. It’s also difficult to determine precisely all the companies that fall within the fossil fuel industry. But, with those caveats, the committee estimates 6-9% of the pool could be considered fossil fuel investments.
Divestment is aimed at investment holdings and need not affect research grants or charitable donations from fossil fuel companies. The U accepts gifts from a variety of individuals, foundations and businesses that share in their support of our mission to serve the public through education, research and service. As a place that facilitates exploration, dialogue, debate, analysis, critical thinking and transparency, the university focuses on whether the funding is to be used in a way that upholds the institution’s mission and values and does not endanger academic freedom.
Staff retirement funds would also be unaffected, as those investment decisions are up to individuals.
The preliminary recommendations
The preliminary report includes eight recommendations. Within one year, the committee says, the university should sell all public equity assets in its endowment from companies on the Carbon Underground 200 list, which includes the 200 companies with the highest quantities of fossil fuel reserves, the report says. Within 10 years, the university would sell private equity assets from all companies in the production and refining and distribution of fossil fuels.
Further, according to the recommendations, the university should set policies to prevent future investment in Carbon Underground 200 companies, should reinvest the proceeds from divestment sales in sustainable investments and should retain investment fund managers who will advocate for sustainable practices in the companies that comprise the university’s remaining investments.
Finally, the committee recommends regular reports on the progress of divestment and reinvestment actions and including the university’s chief sustainability officer on the Investment Advisory Committee. A proposed transition team would mitigate any unintended short-term consequences of these actions.
Find all eight recommendations in full, including the rationale behind each, in the preliminary draft report (available here), pages 64-67.
“The ad hoc committee has worked diligently on this preliminary draft and we hope the U community will digest it, share their opinions with us and have a say on the future of the U,” Mower says.
More information about the ad hoc committee, a recording of previous sessions, and other information can be found here.
The U has focused on committing to reducing its carbon footprint by using, promoting and studying renewable energies. In January, the U earned a STARS Gold rating from the Association for the Advancement of Sustainability in Higher Education (AASHE). STARS, the Sustainability Tracking, Assessment & Rating System, measures and encourages sustainability in all aspects of higher education.
Some of these efforts include:
- Contracting with Cyrq Energy to supply 20 megawatts of geothermal power per year. The contract means that about half of the U’s electricity now comes from renewable sources.
- Using geothermal ground-source heat pumps to heat and cool the Gardner Commons building.
- Securing a $140 million grant to develop new geothermal energy technologies.
- Hosting multiple community purchase programs to encourage and facilitate increased rooftop solar panels and electric vehicles and bikes in the local community.
- Investing in cluster hiring initiatives focused on society, water and climate and sustaining biodiversity.
Additionally, many scientists and engineers at the U are studying the effects of climate change and are working on new technologies to produce, harvest and store energy more efficiently than ever before. To learn more about the U’s efforts to become a more sustainable campus, visit the Sustainability Office here.