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DEMAND 1- Divest

Demand 1:

We demand that the University of Washington’s Board of Regents honor any recommendations given by the ACSRI on fossil fuel divestment which affirm the University’s need for divestment and which sustainably reinvest a minimum of 2.5% of the current CEF into equitable climate solutions. Furthermore, we demand that the BOR develop and codify investment policy which puts a permanent negative screen on investments in fossil fuels, while instructing UWINCO to divest all fossil fuel assets from the CEF no later than 2025.
Furthermore, we are appalled that UW continues to direct the investment of faculty and staff retirement funds into the volatile and morally reprehensible fossil-fuel-rich mutual funds managed by groups such as Fidelity and TIAA. We demand that UW Retirement provide information and disclaimers such as MSCI’s ESG ratings and other educational materials which clarifies the climate impact of investment in fossil-fuel-exposed mutual funds during enrollment through Fidelity in the UWRP. While UW Retirement should honor the investment decisions of its employees, by offering fossil fuel funds as default on Fidelity and TIAA, UW is electing to invest faculty’s future economic security in an industry which is destroying all of our futures.

Targets

The UW Board of Regents
UW Retirement (University of Washington Human Resources)

Background

In 2019 ICA began organizing around an important demand: divestment. Here is the complete list of original demands
ICA Demands:
1. Declare the climate crisis an emergency which requires a just response:
The University should publicly announce that climate change is a crisis and an imminent threat to humanity and all biological life on Earth and therefore, commit to using all available means at its disposal to respond to the threat by decarbonizing its investments, operations, procurement contracts, and supply chain.
2. Implement sustainable changes on campus to equitably address the climate crisis
Implement the tri-campus strategic sustainability action plan which evaluates the sustainability of all university activities, and include current investment practices as an action item for fiscal years 2022-full divestment.
3. Divest all endowments & pensions from fossil fuel industries by 2025
Divest all current holdings and investments in the fossil fuel industry from its endowment, pensions or otherwise, before or no later than fiscal year 2025, (defined to include, but not limited to: Coal, Natural Gas, and/or any other petroleum-based fuel, as well as extraction, refinement, distribution, use, or digital support for those processes), whether in the form of Stocks, Bonds, Mutual Funds, Hedge Funds, Private Equity or Venture Capital that supports the fossil fuel industry nor Assets and Real Estate related to the fossil fuel industry.
4. Re-invest at least 2.5% of endowments into equitable climate solutions
Allocate at least 2.5% of its endowment’s new investments towards sustainable solutions, through mutual funds screened to assure no involvement in the fossil fuel industry, through reinvesting in climate change addressing technologies, renewable energy projects, net zero carbon capital projects, infrastructure, real assets, or through revolving loan funds for sustainable and climate smart development on or off campus.
5. Commit to carbon neutrality by 2030 and net zero carbon emissions by 2040
Commit to and implement a strategy to reach carbon neutrality by 2030 and net zero carbon emissions on or before 2040; by bringing its direct and indirect (Scope 1& 2) emissions from campus operations to zero and reduce as much of its upstream and downstream (Scope 3) emissions as possible from its procurement and supply chain, using Carbon Offsets and Renewable Energy Credits (RECs) only as a limited transition step with sunset clause and/or last resort measure after reducing all possible scope 1, 2 and 3 emissions through its operations, procurement and supply chain.
Since then, ICA has focused in on the Consolidated Endowment Fund (CEF) which contains more than $124 million in fossil fuel investments in the form of mixed and direct holdings. Read about the background, our campaign overview, and the latest in:

After collecting more than 1500 signatures, 30+ RSO endorsements, endorsements from the ASUW Senates, the GPSS Senate, and support from Faculty Senate, ICA submitted our 29 page proposal to the Board of Regents in February 2021, explaining why continued investment in the fossil fuel industry is morally reprehensible and socially unacceptable. Since then, the Board has which began meeting in September 2021 (see ).
In February 2022 the ACSRI indicated they would make their final recommendation to the Board’s Finance and Asset Management Committee on . As explained in , the Board of Regents ultimately has the final decision. After more than two years of good faith negotiation, we strongly ask that the Board honor the UW communities’ interest in divesting from fossil fuels. Stay updated for the latest:

Divestment FAQ

Divestment FAQ
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Q: But really: what does divestment even mean??
Divestment is a tactic used by stakeholders who are concerned with a publicly traded company’s actions. Like boycotts and sanctions, the purpose is to stop the flow of money that finances unethical behavior. Divesting from the fossil fuel industry simply means that we as a university will no longer invest in companies directly tied to the fossil fuel industry. Both a fiscally sound decision in reducing our risk exposure, and a symbolically powerful one in joining groups across the nation pushing for a clean and just transition to a more sustainable economy and energy grid. The UW has a chance to be one of the leaders in this field rather than one of the followers, the choice is ours and the world and future generations are watching.
Q: Won’t divestment hurt UW’s financial health?
One of the most common concerns we hear from students and faculty is Won’t it cost me research dollars/mean I get paid less? In short, NO: Not only is Divestment financially feasible, but according to many metrics it’s a financial positive.
Divestment from fossil fuels will likely not negatively impact your tuition or salary, as fossil fuel investments are some of the lowest performing assets in the market. Recent studies have shown that fossil fuel investments often perform worse than the market as a whole, and that by divesting from these risky and underperforming assets, the university would actually likely increase their revenue.
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Q: What is shareholder activism/shareholder engagement and why divest instead?
Mention divestment, and the first alternative that is usually presented is shareholder engagement (also called shareholder activism). In shareholder engagement, those that own stock in a company attempt to positively influence that company’s behavior to get them to reform their ways. This can include shareholder resolutions where shareholders propose changes and convince others to vote in favor, or all the way to hedge fund proxy contests to buy up more stake in a company.
This is potentially an effective method when the issue with a company is a management style or policy which the company currently practices that can be reformed. Convincing a company in the fossil fuel industry to reform their business practices is one thing. But shareholder activism fails for a few reasons
*The issue of fossil fuel companies is fundamental to the companies themselves. Simply making their products a bit less polluting or their practices a bit less GHG intensive won’t address the problem: the problem is the very notion of the extraction, combustion or processing of fossil fuels (not to mention the very unjust and unethical manner which it currently entails).
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Q: How much does UW currently have invested in the fossil fuel industry?
The university currently has approximately $125 Million dollars directly invested in fossil fuel energy companies. Of the ~3.6 billion dollar consolidated endowment, this is roughly 3.5% of the total endowment. However, it is likely that the university could be inadvertently indirectly invested in several hundreds of millions more in subsidiaries of the fossil fuel industry, although this exact amount is unclear. If you are interested in diving more into the companies that university is invested in you can view the that the university is invested in currently.
Hasn’t the university already stopped investing in coal?
Sort of. The that many remember on campus in 2015 resulted in the Board of Regents asking UWINCO, the group that manages the UW endowment, to divest all UW holdings in thermal coal (a smaller subset of coal used for the production of electricity). While a great symbolic gesture, at the time thermal coal made up a tiny percentage of the endowment representing only 13 million or ~ 0.04% of the endowment.
The BOR failed to divest from all fossil fuels for “financial reasons”, an argument debunked not only by the divestment of larger peers such as the” but also by showing that fossil fuel divestment over the past 40 years would have minimal impact and potentially a positive impact on endowments. That is why ICA is asking the university divest from all fossil fuels, oil, natural gas, coal (Yes, we are still invested in other coal companies that don’t focus on thermal burning of coal), etc. and other associated industries. The time has come for us to double down on our commitment to sustainability, and finish the job we started in 2015.
Q: Why Divestment? What impact does it have on the fossil fuel industry anyways?
Q: Hold up. Where do we invest all that money then?
What do you think we should invest in instead of fossil fuels? Solar, wind, ESG?
While we are not financial experts, we do ask that a portion (5%) of the money divested from fossil fuels be directly reinvested into clean technologies such as solar, wind, battery technology, etc. to help invest in a just and clean transition. These are commonly referred to as and are an area of investment that the University is already doing. Ultimately the stock market is full of non-fossil fuel companies to invest in, many of which have returns many times higher than fossil fuels. We have not specified specific companies we would like them to invest in because we don’t want to prevent the professionals from choosing what is best for the UW, although we urge them to choose investments more reflective of the values of the university.

Q: Is it even legal to divest?




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