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By Che Odom
May 7 — Stanford University announced May 7 that it would stop investing in coal companies, after receiving a student-led petition on the issue.
While the university's president calls it a “constructive” move, a representative of the mining industry says the decision is “political” and shortsighted.
Stanford's Board of Trustees made the decision based on a recommendation from Stanford's Advisory Panel on Investment Responsibility and Licensing, which is composed of students, faculty, staff and alumni and endorsed the divestment idea, according to an announcement posted to Stanford's website. The panel conducted “an extensive review over the last several months of the social and environmental implications of investment in fossil fuel companies.”
The trustees decided the school would not make direct investments of endowment funds in publicly traded companies whose principal business is coal mining for energy generation.
“The university's review has concluded that coal is one of the most carbon-intensive methods of energy generation and that other sources can be readily substituted for it,” Stanford President John Hennessy said in the announcement.
“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.”
Luke Popovich, the National Mining Association's vice president of external communications, sees it differently. He told Bloomberg BNA the decision to divest does not consider coal's impact on people in emerging countries.
“Stanford has chosen political expediency over rational and humanitarian considerations,” Popovich said.
“There are 1.3 billion people in the world who lack electricity and won't get it in their lifetimes if coal is unavailable to them as the most affordable, abundant source of electric power. One would think Stanford, of all institutions, would also appreciate the need to develop technologies to make coal cleaner to use, rather to stop its use and prolong the miseries of millions of people in developing countries,” according to Popovich.
A subcommittee of the advisory panel conducted research on the matter after receiving a petition from a student-led group, Fossil Free Stanford, which asked the school to divest from 200 fossil-fuel extraction companies as part of a national divestment campaign.
The advisory panel said replacing fossil fuels other than coal with renewable energy sources is also a desirable goal, but fewer alternatives are readily available for those sources, according to the announcement.
“The Board of Trustees greatly appreciates the thoughtful work of the students and of the Advisory Panel on Investment Responsibility and Licensing,” Deborah DeCotis, chair of the trustees' Special Committee on Investment Responsibility, said in the announcement. “This is a considered approach that is consistent with our institutional values and acknowledges the critical sustainability challenges facing our planet.“
Stanford's total endowment was $18.7 billion as of Aug. 31, 2013. The university does not disclose specific investments in its portfolio, the announcement said.
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The announcement may be found at http://news.stanford.edu/news/2014/may/divest-coal-trustees-050714.html.
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