University of Washington: UW Board of Regents votes to exit direct fossil fuel investments by 2027
The University of Washington Board of Regents on Thursday approved a resolution to begin exiting all direct investments in fossil-fuel companies with the goal of complete divestiture by Fiscal Year 2027. The resolution includes a commitment not to renew indirect investments in funds primarily focusing on fossil-fuel extraction or reserves. Both commitments include allowances for firms contributing to the transition to sustainable energy.
The resolution also includes a goal of investing at least 2.5% of the UW’s entire Consolidated Endowment Fund in climate-solutions companies or asset managers and a commitment to achieving net-zero emissions in the University’s endowment fund by Fiscal Year 2050.
The Board’s action puts the UW among the leaders in higher education — and among a small group of public universities — acting on climate change through its investments.
“The Board of Regents recognizes the gravity and the urgency of the situation with respect to climate change. With this resolution, the Board wishes to avoid greenwashing and to take meaningful action, putting the University of Washington in the front ranks of universities addressing climate change through research, teaching, operations and investments,” said David Zeeck, chair of the UW Board of Regents. “This is an early step in a very important journey to reduce the UW’s impact on the environment through our investments and operations. We want to thank both the petitioners for bringing this issue to the fore and the members of the Advisory Committee on Socially Responsible Investing for their considered, actionable recommendations.”
The Board’s directives acknowledge the need to act, the incomplete energy transition, lack of corporate disclosures of greenhouse gas emissions precluding measurement of portfolio emissions, and the Board’s fiduciary duties to the people of Washington. The Board will receive annual reports on progress in sustainable investing and measuring portfolio emissions and will revisit these directives at regular intervals. Future investment reports to the Board will include measurement of portfolio emissions — as soon as regulatory mandates or corporate disclosures make this possible — with the goal of reducing portfolio emissions over time.
The resolution comes approximately 18 months after the UW’s Institutional Climate Action group submitted a petition. The Board convened an Advisory Committee on Socially Responsible Investing (ASCRI) over the summer of 2021, and the committee met from September 2021 to April 2022. The committee presented its recommendations to the Board in May and the Board asked the University of Washington Investment Management Company (UWINCO) for its evaluation of the recommendations, which were presented in June. The Board will consider revised climate-investing guidelines at its November meeting.
“This is an important step forward for UW in realizing the full impact of all of the ways we can be part of the solution to addressing climate change,” said Ben Packard, chair of the ACSRI and executive director of EarthLab at the UW. “Our investment portfolio, research, teaching and operations are all part of mitigating climate change and to making our communities more resilient. The ACSRI recommendations acknowledge UW Regents should take these steps to deliver on their fiduciary responsibility.”