In a move made in recognition of social and environmental justice rather than finance, the Rutgers University’s board of governors and board of trustees announced Tuesday the school will divest from fossil fuel investments.
The decision follows the recommendation of an ad hoc committee of faculty, students and staff formed to consider a fossil fuel divestment request from a student group, the Endowment Justice Collective.
“This decision aligns with Rutgers’ mission to advance public health and social justice,” President Jonathan Holloway said. “While the university has taken steps recently to limit investments in this area, approving a policy of divestment from fossil fuels is a significant expression of the values of our institution and our broader community.”
Currently, approximately 5% of the university’s $1.6 billon endowment consists of fossil fuel investments. Sixty percent of these investments are in private funds, and the remainder are in public equity or fixed-income accounts.
In order to divest from fossil fuel investments, the university will:
- Cease all new investments in fossil fuels;
- Divest from passive index funds with fossil fuel investments within one year and reinvest in more environmentally friendly versions of those indices. Rutgers also will actively seek new investment opportunities in renewable energy and energy-efficiency categories that deliver competitive rates of return;
- Exit all currently held private fossil fuel investments within 10 years.
Tilak Lal, chair of the boards’ Joint Committee on Investments and co-vice chair of the board of trustees, said the investment office will report on the progress of the divestment annually, in an effort to ensure transparency.
Fossil fuel investments are investments in any company or fund whose primary business is the exploration or extraction of fossil fuels, including coal, oil and natural gas, or whose primary business supports this sector with infrastructure and other services, the committee noted.
Rutgers student groups and others have voiced their support for divestment from fossil fuels, and many of the report’s recommendations stemmed from their participation.
Zunaira Wasim, a junior at Rutgers University-New Brunswick, was one of four students who served on the committee.
“Divesting from fossil fuels aligns with our Scarlet values and with the university leadership on important issues that students rightfully expect from Rutgers,” she said. “Students like me have expressed our desires to see the university rapidly decrease its carbon footprint and will be proud to see Rutgers taking this step.”
The university has undertaken major initiatives toward carbon neutrality, including the President’s Task Force on Carbon Neutrality and Climate Resilience, which has been charged to develop a comprehensive plan for carbon neutrality and climate resilience.
Other significant steps include joining the University Climate Change Coalition, participating in the “We Are Still In” pledge on climate action, investing in alternative energy sources and implementing initiatives to develop more sustainable business practices and infrastructure.
The climate task force has noted that divestment from fossil fuels is aligned with the university’s goal of carbon neutrality, achieving net zero carbon dioxide emissions by reducing and balancing carbon emissions.
Board of governors Chair Mark Angelson commended the committee’s review and the inclusion of key community members in its deliberations.
“We are doing our part to ensure a sustainable environment for future generations of students, while continuing their access to an affordable education,” he said.
Brian Ballentine, chair of the ad hoc committee and Rutgers senior vice president for strategy, agreed.
“The committee carefully considered the concerns of Rutgers community members along with the ethical and fiduciary responsibilities of the investment committee and the boards as we unanimously reached our recommendations,” he said.