BU vows to avoid but not ban fossil-fuel holdings
Boston University announced Tuesday that it would avoid investing in coal and tar sands in an effort to combat climate change, but the institution stopped short of broadly divesting its holdings in fossil fuel companies as some students and faculty have urged.
Robert A. Brown, the university’s president, announced the decision in a letter to the BU community, making his school the latest to take on complex financial and environmental issues that have reverberated on campuses around Massachusetts and the nation.
He wrote that the changes approved by the university’s board, which also set goals for a more environmentally friendly campus, “constitute a sound basis on which Boston University can proceed in a deliberate and judicious way to face the challenges of climate change.”
Brown said the trustees decided last week to “commit, on a best-efforts basis, to avoid investing in coal and tar sands extractors.”
However, he said, BU faces challenges in making such a move.
“Perfect implementation cannot be assured, however, given the university’s inability to have total investment control,” the letter said, noting that the institution uses “commingled” investment vehicles, like mutual funds, that it does not manage.
BU also uses funds that are linked to stock indexes like the S&P 500, which may contain investments in energy companies that extract fossil fuels.
School officials did not have specifics Tuesday about how much of BU’s endowment is invested in interests linked to coal and tar sands. The endowment was worth $1.6 billion in June 2015, the most recent figure available.
Although the trustees’ decision largely deals with future investments, the university said it may affect current holdings.
Students had been increasingly vocal in their calls for divestment, and many rallied at the school last week in advance of the trustees’ decision. On Tuesday, advocates said they appreciated the university’s response but will continue to push for BU to divest further.
“It means that we definitely have some faith in our university, and hopefully they’ll eventually be able to come to the right decision,” said Masha Vernik, a sophomore international relations student who is a leader of the group Divest BU.
But Vernik said many students are “disillusioned with the university, and thinking that this isn’t a serious promise for change just yet.” She said BU could have gone further, and missed an opportunity to take a strong moral stance against fossil fuel companies.
“Divestment involves more than removing a small portion of the endowment from a small portion of the fossil fuels industry,” she added.
Some who oppose divestment also chided BU for what they described as a half-measure.
“I think what BU is trying to do here is have its cake and eat it, too. This isn’t divestment, which, by definition, actually requires that you sell things,” Matt Dempsey, spokesman for Divestment Facts , a project of the trade group Independent Petroleum Association of America, said in a statement.
Other colleges and universities in the area have come to varied conclusions about how best to represent the environmental attitudes of their academic communities while protecting their fiscal interests.
Divestment activists have been rebuffed recently at colleges including Harvard and the Massachusetts Institute of Technology. But this year, the University of Massachusetts system said it would sell off its direct fossil fuels, a move that does not include university-owned investment funds with stakes in fossil fuel.
Some have gone further, including Hampshire College, which says it has limited its fossil-fuel exposure to less than 1 percent.
Like other institutions faced with divestment pushes, Boston University has resolved to find other ways to use its influence to improve the environment.
The trustees will work with fund managers who specialize in renewable energy and other efforts to curb greenhouse gases, Brown wrote. The school has pledged to develop a plan that will result in more research into climate change and a more efficient campus.
The trustees will revisit the issue at least once every five years.