By David G. Barry
The
University of Washington is joining the ranks of institutions divesting
from fossil fuels and set a goal of investing at least 2.5% of its $4.7 billion
consolidated endowment fund in climate-solutions companies or asset managers.
At its September meeting, the University of Washington Board of Regents
approved a resolution to begin exiting from all direct investments in fossil –fuel
companies with the goal of completing divestiture by fiscal year 2027. Victor Balta, a university spokesman, said that the endowment currently has “3% energy exposure.”
The school also made a commitment to achieving net-zero emissions in the
endowment fund by fiscal year 2050.
The resolution also includes a commitment not to renew indirect investments in
funds primarily focusing on fossil –fuel
extraction or reserves. The commitments, however, do include allowances for
firms contributing to the transition to sustainable energy.
In voting to divest, the University of Washington joins more than 1,300
institutions globally, including the University of California, Harvard, the
University of Southern California, and the University of Michigan.
In a statement, UW Board Chair David Zeeck called the actions “an early step in
a very important journey to reduce the UW’s impact on the environment.”
He added that “the board wishes to avoid greenwashing and to take meaningful
action, putting the University of Washington in the front ranks of universities
addressing climate change through research, teaching, operations, and
investments.”
Balta said that less than 1% of the endowment is invested in climate-solutions
companies or asset managers
The University of Washington Investment Management Company (UWINCO) manages
the $4.7 billion endowment and did evaluated
the recommendations. Those recommendations arose from a petition submitted in
2020 by UW’s Institutional Climate Action group. The board will consider
revised climate-investing guidelines at its November meeting.
In a report to the board, UWINCO said the
endowment reported a negative 5.5% return for the fiscal year ended June 30,
exceeding its policy benchmark of negative 12.8%. It returned 35.1% for the
fiscal year ended June 30, 2021.