Climate Defense Project and Fossil Free Stanford file legal complaint against Stanford

Feb. 16, 2022, 6:02 a.m.

The Climate Defense Project (CDP) is filing a legal complaint against Stanford calling for the University’s divestment from fossil fuels. The complaint, which is being sent directly to the attorney general of California, is being filed in conjunction with Fossil Free Stanford (FFS) and mirror organizations at Yale, MIT, Princeton and Vanderbilt. 

“Fossil Free Stanford started 10 years ago and has tried every tactic under the sun to cooperate with the University to divest,” said FFS organizer Chris Rilling ’22. “But none of these have worked.” Now, FFS is taking a legal path in an attempt to get Stanford to permanently divest its endowment from fossil fuels. 

FFS joined similar organizations at the four other schools involved in the legal complaint to form the Fossil Free Five Coalition (FFFC) in hopes of creating a unified call for divestment at the university level.

To aid in their mission, the FFFC partnered with the Climate Defense Project, a team of pro-bono lawyers who specialize in climate-related legal battles. The CDP is filing the complaint in all five states — appealing to all five Attorney Generals — where the schools are located. 

The complaint obtains its legal basis from the Uniform Prudent Management of Institutional Funds Act (UPMIFA), which governs how nonprofits and charitable funds invest their money. CDP co-founder and staff attorney Alex Marquardt wrote in a statement to The Daily that Stanford’s status as a “public charitable corporation” is what allows CDP to invoke UPMIFA in its filing of the legal complaint. 

Because Stanford is a public charitable corporation, the University is “required to promote the public interest” and “further [its] own particular charitable purposes” to remain tax exempt, according to Marquardt. The complaint alleges that the University’s refusal to divest its endowment from fossil fuels runs contrary to its responsibility to promote the public interest.

In June 2020, Stanford’s Board of Trustees voted against fossil fuel divestment, referencing standards set by the Stanford Management Company, which stated that the Board may only divest in rare cases “that are deemed abhorrent and unjustifiable.” At the time of the decision, less than 1.5% of the University’s merged pool — the largest vehicle of Stanford’s endowment — was invested in fossil fuels. While Stanford had no direct holdings in the 100 major fossil fuel companies identified by FFS as of June 2020, its endowment was indirectly invested in fossil fuels through index funds — investment portfolios intended to track market indexes — and other financial mechanisms.

But Stanford officials are standing by the legality of their investments. According to University spokesperson Dee Mostofi, the University is “confident that Stanford investments fully comply with all applicable laws regulating charities in California.”

Mostofi also wrote that the Board of Trustees is continuing to make progress toward net-zero greenhouse emissions by 2050.

“We have also worked aggressively to decarbonize our operations, having invested over $1 billion in clean energy systems and transportation,” Mostofi added, although the source of funding for these investments still remains unclear. These initiatives, according to Mostofi, will help Stanford achieve an 80% reduction in greenhouse gas emissions by the end of this month.

Once the legal complaint is presented to the attorney general, other legal actions may be taken. According to Rilling, next steps for FFS and the CDP may involve meeting with other investment professionals, and charges could ultimately be filed against Stanford.

But the pressure from the complaint alone could be enough for Stanford to divest from fossil fuels. In Sept. 2021, Harvard divested from fossil fuels after student activists used the same complaint. Miguel Moravec, a second year Ph.D. student at Vanderbilt and member of Dores Divest, believes that Harvard’s specific use of the word “prudent” in its press release implies that the divestment was a direct result of the pressure.

“It seemed to be an acknowledgement that Harvard was changing its investment strategy to comply with Massachusetts law,” Moravec said, adding that “prudence is a core part of the UPMIFA requirement for charities and nonprofits.”

FFS organizer Miriam Wallstrom ’23 supported Moravec’s claim, saying that fossil fuel divestment groups at Harvard met with the Massachusetts attorney general twice in the months leading up to Harvard’s divestment. “There were definitely indications that the attorney general was taking it seriously,” she added. 

According to Wallstrom and Rilling, FFS has made numerous attempts to encourage Stanford’s fossil fuel divestment before their current legal pursuit. The below timeline provides a brief history of FFS’s relationship with the University.

News of the legal complaint comes as Stanford plans for its new School of Climate and Sustainability. Vice Provost and Dean of Research Kam Moler and School of Earth Dean Stephan Graham said that the new school would not refuse funding from fossil fuel organizations in a recent interview with The Daily.

Rilling said that although funding of the new school and divestment are two separate issues, they are ideologically similar — they both highlight the University’s contradictory approach to fossil fuels and sustainability.

“I think they’re somewhat aligned in the question of how we deal with capital and money, and understanding the connection between money and continuing to engage in really harmful practices. It’s just been really disappointing in that respect,” he said. 

Fossil Free Stanford’s next steps will be to “address the opacity in relationships and financial connections” made by both the Stanford administration and Stanford Management Company, Rilling said. 

Organizers at other universities have shared similar experiences with roadblocks on their path to fossil fuel divestment.

Molly Weiner, a frosh at Yale and organizer with the Yale Endowment Justice Coalition, expressed concerns about Yale’s contradictory stance on climate. “So much of the leading research on the climate crisis comes from my university, but [Yale] is just fanning the flames of the climate crisis. The dissonance is really striking to me,” Weiner said.

Organizers at Divest Princeton have been waiting for Princeton to take action since an original proposal was submitted over two years ago, according to co-coordinator Hannah Reynolds. 

“We have been continuously denied formal meetings with the president and the board of trustees. New committees have repeatedly been established by the university in order to delay any formal decisions on divestment,” Reynolds wrote to The Daily, viewing the legal complaint as the “logical next step” after over a decade of inaction.

Peter Scott, co-leader of MIT Divest, wrote to The Daily that MIT has been ignoring calls for divestment since 2013. “We hope that filing this complaint will make divestment much harder for administrators to disregard and shine a light on the significance of MIT’s fossil fuel investments,” he wrote.

Moravec concluded that he doesn’t think divestment is a matter of “if,” but rather a matter of “when.” Beyond just a moral argument, he said, there is now a reputational aspect of divestment that will encourage the schools represented by FFFC to divest.

“Everyone is going to be affected by climate change, and that’s why we have to act now. We can’t wait for our administrations to get back to us with empty promises and revolving door meetings,” Moravec said.

Benjamin Zaidel ’24 is a desk editor for the Daily interested in studying Bioengineering. A Los Angeles native, Benjamin believes that 68 degrees should count as sweater weather. Contact him at bzaidel 'at' stanforddaily.com.

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