Our 3rd demand is that: UC fully divests from fossil fuels and quits all fossil-fuel related banking. There are several aspects to this:.
A. UC-wide divestment.
An essential part of the climate crisis movement is to make institutions divest their holdings in fossil fuel funds.
- In July 2019, after a years-long campaign started by the students, a majority of voting faculty on all 10 campuses approved the memorial that specified divestment from fossil fuel funds held in the UC Endowment.
- On Sept 17th 2019, UC financial officers apparently announced their intention to divest the endowment AND the pension of all fossil fuels [The UCSD Guardian carries the overall story here.].
- In May 2020 the Chief Financial Officer announced that UC is now “fossil free”. While this was hailed around the world as a victory, our analysis is that this represents derisking rather than divestment: the words of the CIO can be interpreted to mean that as soon as conditions are favorable he might buy back fossil fuel related investments. Further, without transparency, we cannot evaluate the claim that UC is “fossil free”. In fact, very many stocks and bonds are exposed to the fossil fuel industry, and getting this right is tricky.
- On July 1st, the head of faculty governance at the UC requested full transparency on fossil fuel investments from the UC President and Chief Investment Officer.
B. Divest Yourself! Put your retirement savings to good use!
Most retired career UC employees receive their benefits from the Pension Fund addressed above. Career UC employees may also contribute to 401(a), 401(k), 403(b) and 457(b) tax-deferred savings plans. If you have one of those accounts, it is probably invested in a fund that gets a D rating from Fossil Free Funds, but we show you here how to move your investments to a B-rated fund. This is not a perfect solution, but is a start.
At the end of 2019, in the US there was about $20 Trillion dollars invested in IRAs and employer-sponsored retirement plans like those above. About $13T of this is in stock funds. Let’s put our money where our mouths are and inspire a nationwide Divest Yourself movement!
C. UC’s money should not be used to destroy our future! Use a responsible banker!
Averting devastating climate catastrophes requires that most identified fossil fuel reserves remain in the ground, yet major banks are providing massive funding to enable their extraction. A recent report examined the fossil fuel investment policy of 35 major banks. In the 4 years since the Paris Agreement was adopted (2016-2019), they have lent $2.7 trillionto enable further exploitation. UCSD, for example, banks with the Bank of America. In the past 4 years, BofA has provided $157 billion in financing to fossil fuel companies, making it the fourth largest financial enabler of fossil fuel extraction in the world. It led all other banks worldwide in its increase in fossil fuel financing from 2018 to 2019. The analysis also examined banks’ specific investment policies in some of the most polluting sources: tar sands, arctic and offshore oil, fracking, LNG, and coal mining and extraction. BofA scored about 5 out of 200 points, the worst of all American banks examined (see chart on page 12 of footnote 1). In short, BofA takes the money that UCSD deposits, and leverages it to underwrite enormous loans that are crucial enablers of the destruction of the future planet we will inhabit. Is this wise?
It is likely that no bank which is large enough to service UC or UCOP is taking the climate emergency seriously enough. However, BofA is one of the worst. We demand that the UC issues a competitive call for proposals from banks to provide commercial banking services to the UC, indicating how the bank’s fossil fuel investment policies and actions will be incorporated into the decision criteria. We demand that the Regents address the same issue.
D. Pushing Chase bank off our campuses
One campus, UCSD, generated a petition for ethical leasing of space in the student center, see here.