University of Washington students are calling on the UW’s regents to remove coal companies from the investments made by the school’s $2.6 billion endowment.
In so many ways, the University of Washington strives to be green: It requires all students to buy a bus pass, runs its own small organic farm on campus, even urges people to put discarded paper towels in specially marked bins in the bathrooms so they can be composted.
In 2011, the Sierra Club named it the most environmentally friendly school in the nation.
Now a group of students, backed by student-government leaders, wants the university to take it a step further — by divesting the university’s endowment from coal.
On Thursday, leaders of the student group Divest UW will make a presentation to the UW Regents asking that the thermal-coal investments in the UW’s endowment — the type used to generate electricity — be sold.
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The UW’s $2.6 billion endowment includes about $2.3 million invested in coal, or less than 1 percent of all investments.
Why coal? It represents a small sector of the investment universe, so it’s easy to replace coal with another type of investment in the portfolio, said Alex Lenferna, a graduate student in philosophy and Fulbright Scholar who is a member of the anti-coal group.
Lenferna also says coal has been a volatile investment that has not performed well in recent years. And he said coal is incredibly harmful to the environment, a major contributor to greenhouse-gas emissions and a source of water and air pollution.
For several years, student leaders across the country have campaigned to get their colleges and universities to divest from companies involved in coal or fossil fuels. The idea hearkens back to the 1980s, when widespread divestment by universities in South African companies was one of many forces that helped end that country’s system of apartheid.
Divesting from coal is a good first step on the path to divesting entirely from fossil fuels, said Karthik Ganapathy, communications manager for the national environmental group 350.org.
“It’s an easier lift, to divest from just coal,” he said. “It’s harder to take an extra step to divest from Exxon and Chevron.”
Last year, Stanford University and the University of Maine state system divested from coal. Some pension funds and churches have done the same.
But last year, a student group at Western Washington University tried unsuccessfully to get that school’s foundation to divest from all fossil fuels. Instead, the foundation’s governing board said it would create a climate-friendly investment fund in the portfolio as an option for donors. Seattle University has also rejected calls to divest from fossil fuels.
The UW Investment Office has estimated that divesting in coal would cost the university about $13 million over 20 years, based on an analysis of the past 20 years of historical returns.
But students argue that in recent years, coal has been a risky investment and has performed poorly. “Expecting that coal will perform the same over the next 20 years as it did in the past 20 is somewhat akin to expecting Blockbuster to be the future of home entertainment,” Lenferna said.
In 2013, a group of student leaders persuaded the UW Regents to agree to a set of guidelines that would encourage the UW to seek out investments in alternative energy, and examine investments through the lens of environmental and social values.
The guidelines encouraged the UW to participate in “shareholder engagement” — as a shareholder, the UW would try to influence the companies it invests in.
But Lenferna said students have come to realize that shareholder engagement isn’t very effective — it’s not possible to fundamentally change a company’s business model when it is founded upon the extraction and sale of fossil fuels.
And the UW has moved slowly on shareholder engagement. “They passed the resolution in 2013, and they still haven’t sent out a single letter,” Lenferna said.
In a report to the regents, the UW’s investment office describes divestment as “a course of last resort” because it can negatively impact the investment portfolio’s performance. “In addition, the loss of shareholder status effectively ends the dialogue with banned corporations,” the report says.
Coal divestment has the backing of the Associated Students of the University of Washington (ASUW) Senate, which voted 59-9 in favor of it in January, and the Graduate and Professional Student Senate voted unanimously in favor of divestment last year. In addition, 26 other student groups, 700 students and dozens of faculty members have signed a petition in favor of divestment.
The regents are not expected to take a vote during Thursday’s meeting, which will be held at the UW Bothell campus. If they decide to vote on the measure, they are most likely to do so during their next meeting on April 9.