(Adds coal industry group’s comment in last paragraph.)
May 8 (Bloomberg) -- Stanford University’s decision this week to end investments in coal companies may bolster student- led campaigns to stop climate change that have spread to hundreds of U.S. college campuses.
Stanford, which has an $18.7 billion endowment, is the wealthiest and most high-profile university to embrace the argument that universities should divest from fossil-fuel companies contributing to global warming. The other 11 institutions are relatively small, with endowments ranging from $960,000 to $124 million, and have stopped investing in oil and gas companies as well as coal, according to 350.org, the group behind the movement.
“Having Stanford come out like this is huge,” said Alli Welton, one of the student founders of Divest Harvard, which has been trying to pressure Harvard University. “The decision by Stanford will become a very powerful tool for other campaigns.”
Activists have been seeking a high-profile convert to the cause of divestment in the hopes that it will create a domino effect, making it safe for other universities to follow, Welton said. The climate campaign has been following a pattern found in other divestment drives that began in the 1970s when students sought to end the apartheid regime in South Africa by forcing universities to sell holding of companies with links to the country.
Harvard, the world’s richest university, has declined repeated calls by both students and faculty to sell its holdings of fossil-fuel companies. Instead Harvard President Drew Faust has said the school is embracing more sustainable investing while relying on research and teaching to provide solutions to climate change and also cutting carbon emissions on campus.
Last week, activists at Harvard tried blockading the president’s office on the Cambridge, Massachusetts, campus, pushing for an open meeting with the university’s trustees.
“As an institution, our focus remains on how our programs of research and education can best contribute to accelerating the transition to renewable sources of energy,” Kevin Galvin, a spokesman for Harvard, said in an e-mail last week. He declined to comment further yesterday.
“We recognize that members of our community have a variety of perspectives on how to respond most effectively to the serious dangers posed by climate change,” Galvin said.
Stanford, which is based near Palo Alto, California, and has been at the center of the Silicon Valley technology boom, provides both a symbol for the divestment movement and a rationale that has been rejected by other schools.
Stanford said on May 6 that divesting from coal is consistent with its investment policy because there are alternatives to the fuel source “that have less harmful environmental impacts.”
The university also held out hope in its announcement that other fuel sources would emerge to permit it to divest from oil and gas companies as well. The group 350.org, which was co- founded by environmental writer Bill McKibben, has identified 200 companies with the largest reserves of coal, oil and gas.
“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,” John Hennessy, Stanford’s president, said in the statement.
The group Brown Divest Coal made similar arguments to the leaders of Brown University that were embraced by a panel sanctioned by the school yet ultimately rejected by President Christina Paxson in October. Students at the Ivy League school in Providence, Rhode Island, said Stanford’s decision helps to keep the campaign current and maintain pressure on reluctant administrators.
“We’re going to keep pressuring the university to divest,” said Camila Bustos, a Brown student organizer. “Sometimes it takes a big player to take action for others to follow.”
Stanford has also provided an investment rationale for other universities, according to Dan Apfel, executive director of the New York-based group Responsible Endowments Coalition. School leaders such as Cornell University President David Skorton have rejected campus campaigns to divest partly because doing so may harm the performance of the endowment.
“It is also a financial statement,” said Apfel. “Stanford believes that coal is on its way out and divesting will not hurt their investments.”
The World Coal Association, which represents the industry, said in a statement yesterday that Stanford’s decision won’t do anything to reduce demand for coal or help the environment because it is boycotting companies that also invest in cleaner coal technologies.