The University of Massachusetts caved to students’ demands for divestment, as the board of directors for its $770 million endowment voted unanimously to wholly halt direct fossil-fuel investment.
The endowment, managed by the not-for-profit corporation UMass Foundation, decided in December to divest from coal—but that move was not enough to satisfy hundreds of students, who occupied the Whitmore Administration Building in April, demanding the university abandon fossil-fuel investment altogether. The sit-in concluded after 34 arrests.
A spokesperson for the UMass Foundation’s media office said the student protests were “certainly a factor” in the UMass Foundation’s decision, referring Heat Street to a news release for answers to our other queries.
UMass President Marty Mehan said in the news release that he was proud of students’ stand, adding that “important societal change often begins on college campuses and it often begins with students.”
The Massachusetts Daily Collegian reported earlier this week that fossil fuels account for only $5 million of the endowment’s $770 million in investments.
In recent years, more than a dozen private colleges, community colleges and universities have divested or limited their investments in coal and fossil fuels. Several more, including Cornell, Yale and Stanford University have recently been under pressure to do so.
Critics have said such divestments jeopardize the financial stability of colleges and universities. One report, conducted by the economic consultancy firm Compass Lexecon, modeled returns of a portfolio divested from fossil fuels with one that had not and was more diverse.
“What we found is that the optimal portfolio, which included energy stocks, generated average returns 0.7 percentage points greater than portfolios that excluded them on an absolute basis,” one of the study’s authors wrote in the Wall Street Journal.
In a news release, UMass Foundation noted its primary responsibility is as a fiduciary that seeks the most returns possible on donated funds.
“That we took this step reflects not just our comfort as fiduciaries but the seriousness with which we see climate change,” said the foundation’s treasurer and investment committee chair.
In addition to divesting from fossil fuels, UMAss intends to invest in offshore wind energy, the news release said.
— Jillian Kay Melchior writes for Heat Street and is a fellow for the Steamboat Institute and Independent Women’s Forum.