The University of California system is disinvesting from fossil fuels, officers announced Sept. 17, marking a financially strategic move for the UC system and a beneficial move for the environment.
By the end of September, the UC system’s $13.4 billion endowment will no longer be invested in the fossil fuel industry, and will work on completely divesting its $70 billion pension fund.
The UC system is making a wise business move by ensuring that pensions will not be backed by a poor financial decision, but thorough thought and consideration must be directed toward finding new, sustainable industries while considering financial risks and gains. UC Chief Investment Officer and Treasurer Jagdeep Singh Bacher has emphasized the non-political nature of this decision, he credits student activism for bringing awareness to the issue.
The announcement followed the declaration of a climate emergency from the UC president and chancellors, according to the Associated Press. However, UC refers to the decision as a response to avoid financial risk, Bacher wrote in an editorial for the Los Angeles Times.
Dependence on fossil fuels is increasing but 80% of the largest oil fields have reached the height of their production levels, according to Ecotricity. Furthermore, the organization found that oil and gas reserves could run out within the next 60 years.
The world’s demand for energy cannot be sustained by finite resources, and the money in these industries will be wasted once they have been exhausted. Because of limited resources, investors now need to look at the benefits of continuing their investment in the fossil fuel industry.
This may be the right move in order to obtain support and promote green investment to those who are concerned with financial longevity before the maintaining the earth’s limited resources.
While the decision was not made with environmental protection and preservation in mind, it is still a good move.