SAN FRANCISCO - Stanford University on Tuesday said it will no longer use any of its US$18.7 billion (S$23.33 billion) endowment to invest in coal mining companies, a move aimed at combating climate change that could influence college administrations elsewhere.
The university's board of trustees agreed with recommendations from a panel of students, faculty, staff and alumni that found investments in alternatives to coal would be less harmful to the environment.
The burning of coal for electricity is a major contributor to the output of heat-trapping greenhouse gas emissions globally.
The school's announcement comes on the same day the White House released a report warning that climate change was already affecting the United States in the form of more severe droughts in some areas and more intense storms in others. "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," said Stanford President John Hennessy.
He added that Stanford, which is located on the edge of Silicon Valley, is working to develop sustainable energy sources.
The resolution means that Stanford will not directly invest in approximately 100 publicly traded companies for which coal extraction is the primary business, and will divest of any current direct holdings in such companies, the university said.
Stanford also will recommend to its external investment managers, who invest in wide ranges of securities on behalf of the university, that they avoid investments in publicly traded coal mining companies as well.
The announcement was cheered by a student-led organisation known as Fossil Free Stanford, which petitioned the university last year to cut ties with the coal mining industry. "We are proud that our university is responding to student calls for action on climate by demonstrating leadership," the group said in a statement. "Stanford's commitment to coal divestment is a major victory for the climate movement and for our generation." Jay Carmona, divestment campaign manager for 350.org, said he hopes Stanford's decision will influence other universities. "Now that one of the biggest endowments on earth has acknowledged that it can't keep investing in climate change, others can follow," he said.
Stanford does not disclose specific investments in its portfolio nor their individual value, though it provides information on endowment holdings and performance by broad asset category.
The total value of the endowment was US$18.7 billion as of Aug. 31, 2013, the close of the 2012-13 fiscal year.