Stanford University’s board of trustees said it will not make direct investments from its $18.7bn endowment fund in publicly traded companies whose main business is mining coal to generate electricity.
The decision means that Stanford, located south of San Francisco, will not directly invest in about 100 publicly traded companies that extract coal as their primary business, and will divest any current holdings. Stanford will also recommend that external investment managers that invest on behalf of the university avoid such investments.
The board acted on the recommendation of an advisory panel that included students, faculty, staff and alumni. The panel had “conducted an extensive review over the last several months of the social and environmental implications of investment in fossil fuel companies,” the university said.
The institution’s 1971 statement on investment responsibility states that the obligation of the trustees is to maximize the financial returns of assets and can include “social injury” as a factor in their decisions. Stanford said that coal is a carbon-intensive energy source and other fuel sources can be substituted for it.
A student group called Fossil Free Stanford petitioned the university last year to divest from 200 fossil-fuel extraction companies, which led to the decisions by the advisory panel and the board of trustees.
Stanford said it does not disclose specific investments in its portfolio or their value. The total value for its endowment was as of 31 August, 2013.
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