Years from now, 2015 will be understood as a pivotal year for climate policy in California, in the United States, and at the United Nations’ upcoming climate meetings in Paris. At the University of California, with investment assets of nearly $100 billion, we believe the response to this progress on climate policy needs to be more than a divestment-or-nothing reflex. Blanket divestment from fossil fuels grabs headlines but doesn’t actively address climate change.
Over the past few months, the university has sold its remaining direct holdings in coal-mining and oil-sands-focused companies. The move is part of our new risk-review process that more comprehensively considers environmental sustainability, social responsibility and governance risks in our investment strategy.
We believe, like our colleagues at the state’s pension investment fund CalPERS, that climate change is an active risk factor to consider when we evaluate investment opportunities. We will look at carbon prices when we assess electric utility investments. And we believe that investing in solutions to climate change will have more significant impact than a blanket divestment policy. That’s why we are committing $1 billion toward finding solutions to climate change.