We noted yesterday that UC apparently divested its portfolio from coal, albeit without an official divestment policy. An explanation appears in the San Francisco Chronicle:
Jagdeep Singh Bachher is the chief investment officer of the University of California regents.
...Over the past few months, the university has sold its remaining direct
holdings in coal-mining and oil-sands-focused companies. The move is
part of our new risk-review process that more comprehensively considers
environmental sustainability, social responsibility and governance risks
in our investment strategy... Our approach to sustainability counters the timeworn trope that
institutional investors can adopt a values-based investment strategy
only if they can guarantee targeted returns. In our view, institutions
that ignore societal values in their investment strategy imperil their
bottom line — today and for years to come... As a global leader in sustainability research and practice, the
University of California has been wary of coal-mining and oil-sands
investments for a while. Our sell-off of the small holdings in our
active portfolio acknowledges the growing regulatory and market risks
associated with these businesses.
More tellingly, hedge funds that were short-selling
coal shares this year have been rewarded handsomely for that choice.
Over the same period, Goldman Sachs struggled to write off its $200
million investment in a Colombian coal mine as labor unrest and other
operational challenges racked up substantial losses...This year, we joined the White House in an effort to help long-term
investors such as ourselves — pension funds, endowments, sovereign
funds, family offices and foundations — identify, screen, assess and
invest in companies that offer the most promising, and potentially
profitable, solutions to climate change. We believe the performance of such investments will
unlock billions and potentially trillions of dollars within those key
investor communities to help companies bridge the gap between innovation
and commercialization, and speed the distribution of technology that
reduces global greenhouse gas emissions.
As our students return to campus with the certainty
of purpose that divestment is the only solution to society’s woes, we
are integrating sustainability into our investment framework as a
philosophy of long-term investing in and for the future, and as a key metric for evaluating risk.By doing so, we will not only be able to generate
competitive, risk-adjusted, long-term investment returns, but also help
save the world.
Full op ed at http://www.sfchronicle.com/opinion/article/Why-UC-doesn-t-embrace-blanket-disinvestment-of-6496833.php?t=28f2ada17fcefdcb88&cmpid=twitter-premium
Save the world! Wow!
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