UM shifts investment strategy amid global warming, pledges to become carbon neutral
After years of students advocating for divestment in fossil fuels, the University of Michigan announced Thursday that it will be shifting its portfolio of investments away from the largest businesses that generate fossil fuels and investing in those using renewable energy.
The university also vowed to become carbon neutral by 2050 and approved $140 million in investments in three funds with renewable energy development to its $12.5 billion endowment.
"Endowments by their very nature are future-looking," said UM President Mark Schlissel. "Today we position our investment strategies to meet the challenges of the future."
UM said it is likely the first public university in the country to make this move aimed at addressing climate change.
"This is the biggest, most urgent crisis we have ever faced," said UM Regent Mark Bernstein. "Everything is on the line here. It has been said that 'We are the first generation to feel the effect of climate change and the last generation that can do something about it.'"
Bernstein added that the issue is a big and complicated global problem and the moves made by UM are about managing investment risk and returns,
"This is about fairness and equity," said Bernstein. "Those who suffer the most due to climate change (the poorest and most vulnerable people on our planet) have done the least to cause the problem."
But some say the move doesn't go far enough.
UM's Climate Action Movement, a coalition working for climate and environmental justice, said that the university has roughly $1.1 billion invested in the fossil fuel industry so it has been in the "ethically indefensible position of directly funding the climate crisis, driving a humanitarian crisis on a massive scale," the group said in a statement.
"U-M’s partial divestment is a crucial step toward toppling this malignant industry, and one driven by almost a decade of student activism, during which the administration arrested and charged peaceful students rather than meet to address U-M’s inaction on climate," the statement said. "This is a hard-won victory on the road to a more just and equitable society. However, the lack of a rapid timeline for selling its existing fossil fuel holdings and continued allowance of investments in so-called natural gas is utterly unacceptable, at a time when we must do everything we can to halt all extraction of fossil fuels."
UM officials said the college joins a small number of universities — including Harvard University, Stanford University and the University of Oxford in the United Kingdom — that have pledged to transition their endowments to net-zero emissions by 2050, according to data compiled by the nonprofit Intentional Endowments Network.
The move comes after years of student activism, which Regent Jordan Acker hailed.
"Your activism matters. Your voice matters. Your passion matters,"Acker said. "Keep advocating, keep organizing on this and other issues. You have made the campus a better place."