Gross Stupidity in California

The University of California system has announced its intention to completely divest from fossil fuels. 

Officials in charge of investments insist that their decision to move toward more “sustainable” and environmentally conscious investments is simply in the practical interest of beneficiaries, rather than a product of political opinion.

In an opinion piece in the Los Angeles Times, UC chief investment officer and treasurer Jagdeep Singh Bachher and chairman of the UC Board of Regents’ Investments Committee Richard Sherman reasoned that “hanging on to fossil fuel assets is a financial risk.”

“That’s why we will have made our $13.4-billion endowment “fossil-free” as of the end of this month, and why our $70-billion pension will soon be that way as well,” the officials explained in the September 17 op-ed.

Sherman and Bachher deny that their decision was “born of political pressure,” or that it is a result of “green movement idealism.” Instead, they insist that it is based on a “sustainable investing” approach. 

“Today, we are on track to beat our own five-year goal of investing at least $1 billion in climate change solutions and, by incorporating environmental, social and governance factors — ESG factors — into our investment decision-making, we’ve become better stewards of university funds,” the officials explained.

Sherman and Bachher boast that they drove UC to become the first U.S. public university to sign onto the U.N’s Principles for Responsible Investing, a commitment by institutional investors to act in the "long-term interests” of their beneficiaries by incorporating “environmental, social, and corporate governance (ESG) factors” into investment decisions.

The commitment consists of six principles to guide investment decisions including to “incorporate ESG issues into investment analysis” to “seek appropriate disclosure on ESG issues by the entities in which we invest,” and to “promote acceptance and implementation” of the listed principles.

The investors emphasize that they are not driven by political reasonings, but that they are led to the same decision that they might be if that were the case. Regardless of political motivations, they say that they sold $150 million in fossil fuel assets because they “posed a long-term risk.”

“While our rationale may not be the moral imperative that many activists embrace, our investment decision-making process leads us to the same result. We’re in the business of helping to ensure the financial viability of a great university whose stakeholders frequently come at an issue — even one as terrifyingly consequential as climate change — from different perspectives,” the pair wrote.

https://www.campusreform.org/?ID=13752