We are proud of the Stanford Board of Trustees’ decision to divest the University endowment of direct investments in coal. This was an important first step towards removing all fossil fuels from the Stanford endowment portfolio, an action that is critical to setting a moral example for the future leaders being educated here. We are pleased that Stanford is setting an example that other institutions of higher learning should be encouraged to follow.
If ever there was a moral challenge facing our society, climate change is it. President Hennessy himself has called it “the problem of our time.”
Over 97 percent of climate scientists, including many of Stanford’s own faculty, have agreed that anthropogenic climate change is a scientific reality. Any hope of holding the globe to a two-degree Celsius increase in temperature — a target agreed upon by 173 nations, and the importance of which is reiterated in the most recent IPCC report — requires that 80 percent of the world’s proven fossil reserves stay in the ground. The fact that these reserves are currently carried on the balance sheet of publicly traded fossil fuels companies strongly supports the argument for a strategy that transitions away from investments in these companies.
If we remain on our current path, the world’s fossil fuel consumption will place hundreds of millions of mostly poorer people in harm’s way, and will leave our children faced with a future characterized not by possibility and opportunity, but by the need to manage the horrendous impacts of climate change.
Furthermore, the fossil fuel industry as a whole has spent hundreds of millions of dollars corrupting our political system to ensure that it does not have to operate on a level playing field, and on manufacturing and spreading doubt among the American public about the very climate science being produced by institutions like Stanford – all at the cost of the poorest around the world, and of our children and grandchildren’s future.
The Board of Trustees’ decision to withdraw from coal investments is encouraging, but we hope the Board will extend the policy to ensure divestment from all fossil fuels. Students learn from the culture and the behavior of an institution as much as they learn from classes. Thus, a mission-driven educational institution like Stanford cannot ignore its own core values in making investment decisions without damaging its ability to achieve its mission to educate. Stanford has already acknowledged this formally in its Statement on Investment Responsibility, which we commend. So, while we recognize that most investment portfolios like Stanford’s include a variety of investments (e.g. hedge funds, mutual funds), thus leaving few opportunities to pick or choose from a menu of specific stocks, it is clear that in order to fulfill its commitment to investment responsibility, Stanford’s Trustees should immediately instruct the University’s investment managers to cease and divest from any investments designed to explore for or develop new sources of fossil fuels.
If we don’t make every effort to hold the earth’s increase in temperature at no more than 3.6 degrees Fahrenheit, we are simply putting our children and grandchildren in harm’s way. Since the dawn of the industrial era, we have burned enough fossil fuels to release nearly 300 gigatons of carbon dioxide; to stay under the 3.6 degrees red line, we can burn only 600 gigatons more.
All of the proven reserves owned by public and private companies and governments would, if burned, produce nearly 3,000 gigatons of carbon, or enough to plunge the earth into an uncontrolled climate spiral with temperatures far above any that life as we know it could support. Given these numbers, any sensible investor can understand that we can only burn 20 percent of proven fossil fuel reserves; to invest further in finding or developing even more reserves of fossil fuels is immediately unwise economically.
Again, we applaud the Board for its policy with respect to investments in coal. But Stanford’s Trustees must come to understand the full dimensions of the carbon equation; when they do, they will change Stanford’s investment policy, and ensure that Stanford retains its hard-earned place of global leadership.
Timothy E. Wirth, Ph.D. ’73, former U.S. Senator from Colorado, is Vice Chairman of the United Nations Foundation; he can be reached at [email protected]. Christopher W. Wirth, B.A. ’90 is the founder of the Boulder, Colorado, based Liberty Puzzles; he can be reached at [email protected]. Kelsey D. Wirth, M.B.A. ’97 is the founder of Align Technology and founder and co-director of Mothers Out Front: Mobilizing for a Livable Climate; she can be reached at kelsey[email protected].