On May 14th, 2015 the University of Washington board of regents voted to divest all endowment funds, approximately $2 billion, from companies whose primary profit comes from burning coal for energy creation.
“The Regents take very seriously their responsibility for managing the University’s investment portfolio. It has made divestment decisions only a few times on matters it felt represented important values. That we decided to divest from coal companies today reflects the seriousness of the climate change problem. Our action today is the latest element of the University’s long-term commitment to improving the environment through world-class research and state-of-the-art sustainability practices”
–Bill Ayer, Washington University Board Chair
The University of Washington followed in the footsteps of other pension funds, universities, and foundations who have similarly chosen to divest from fossil fuel companies. Visit the Fossil Free website for a list of these organizations and their respective commitments. Fossil Free is a project conducted by 350.org. Divesting from fossil fuels is one way individuals or organizations can participate in socially responsible investing.
Most retirement savings are invested in standard mutual funds or some other highly diversified investment vehicle, which means that the average investor may own stock in cigarette, alcohol, gambling and/or fossil fuel related companies. Most investors have little knowledge or interest in the many stocks that make up their retirement investments. For those who are opposed to owning and participating in the business of cigarettes, fossil fuels, etc., socially responsible investing (SRI) funds have emerged as a way to invest savings in sustainable companies and divest from unsustainable ones.
From a sustainability perspective, divesting from socially irresponsible funds can be as important as investing in SRI funds, which may have similar composition and risk compared with their less-sustainable counterparts. Investors can pick from high-risk funds that feature exclusively solar or alternative energy stocks to low risk mutual funds that track the market similar to traditional investment vehicles. SRI funds consider a business’ societal impact and allow investors to choose which issues they want to support.