Divestment Press release

Press release: U-M commits to divesting from fossil fuels

FOR IMMEDIATE RELEASE

Website: https://www.climateactionuofm.org/whoweare

March 25th, 2021

Ann Arbor, MI -- With roughly $1.1 billion invested in the fossil fuel industry, the University of Michigan has been in the ethically indefensible position of directly funding the climate crisis. For nearly a decade, students called for fossil fuel divestment, during which students were arrested and charged for holding a peaceful sit-in after which President Schlissel unequivocally stated that divestment was not an option at the University of Michigan. Today, the Regents announced that they are discontinuing all investments in publicly traded companies defined by the Carbon Underground 200 as the major contributors to greenhouse gas emissions, and all investments in funds primarily focused on oil reserves, oil extraction, and thermal coal extraction. The University also announced a commitment to shifting investments in the natural resources sector toward renewable and sustainable energy investments, and committed to reducing the carbon footprint of their $14.2 billion endowment to net-zero by 2050.

In many ways, this is a victory. This announcement yet again shows that U-M’s endowment can and must be used to respond to social issues. Regent Mark Bernstein made clear that the impact of the climate crisis requires us to do everything we can to mitigate harm, a doctrine which must also be applied to other social issues. Furthermore, this announcement will tangibly accelerate the societal shift away from fossil fuels to renewable energy, a necessary change to mitigate some of the harm induced by the climate crisis.

However, we have a number of issues with their announcement. U-M’s policy would still allow for the endowment to be invested in natural (fossil) gas through private equity firms. Natural gas is a fossil fuel and must be considered part of a full divestment policy. The classification of natural gas as a “sustainable energy investment” is utterly unacceptable at a time when we must be doing everything we can to halt all fossil fuel extraction.

Furthermore, the Regents provided no meaningful timeline for divestment. While peer institutions such as the University of California system have already fully divested from fossil fuel companies, U-M made only a meek commitment to a net-zero endowment by 2050, providing no concrete interim dates by which any investments will be withdrawn. This is crucial because it is unclear whether U-M will be divesting from its current fossil fuel contracts and shifting to renewables and sustainable energy investments, or simply letting its existing contracts expire.

The Regents did not address our demand to change how our investment decisions are made. Piecemeal divestment decisions do not address the structural deficiencies that led U-M to finance such immoral entities in the first place. It is unacceptable for U-M to continue using profit as the sole consideration for investment decisions. In fact, just last week, the Oakland Institute released a damning report uncovering U-M’s $165 million investment in the palm oil industry in the Democratic Republic of Congo. This recent immoral investment bankrolls horrific environmental and human rights abuses, including murder, land theft, and pollution of drinking water.

Finally, while shifting investments to renewable energy is a powerful component of U-M’s new policy, reinvestment must also include community resilience. The impacts of climate change are already being felt by communities worldwide, displacing families, destroying ecosystems, and collapsing food systems. Full action on climate requires reinvestment not only in clean energy infrastructure, but also reinvesting in community strength and resilience.

These shortcomings underscore the critical need for the implementation of basic, ethical guidelines that ensure U-M’s investments are not detrimental to human rights and for oversight of endowment management through the establishment of a Standing Committee for Responsible Investment (SCRI).

We celebrate this as a hard-won victory as a crucial step toward toppling the fossil fuel industry, putting to action the kind of urgent harm reduction necessary to protect ourselves from the worst impacts of the climate crisis and move towards climate justice. However, this announcement must serve as a catalyst for U-M and other institutions to do more; to completely divest from fossil fuels on a rapid timeline, divest from other unethical industries, and reinvest in a rapid, just transition and community resilience.