Rutgers University will divest from fossil fuel investments the following approval today by the university’s Board of Governors and Board of Trustees.
The decision follows the recommendation of an ad hoc committee of faculty, students and staff formed to consider a fossil fuel divestment request from a student group, the Endowment Justice Collective.
“This decision aligns with Rutgers’ mission to advance public health and social justice,” said President Jonathan Holloway. “While the university has taken steps recently to limit investments in this area, approving a policy of divestment from fossil fuels is a significant expression of the values of our institution and our broader community.”
Board of Governors Chair Mark Angelson commended the committee’s review and the inclusion of key community members in its deliberations. “We are doing our part to ensure a sustainable environment for future generations of students while continuing their access to an affordable education.”
To divest from fossil fuel investments, the university will:
APPROVING DIVESTMENT FROM FOSSIL FUELS AND
AMENDING UNIVERSITY POLICY 40.2.14: INVESTMENT POLICY
WHEREAS, the Rutgers University Investment Policy includes a process the University should follow when members of the University community request that funds within the Rutgers University Endowment be divested from, or that the Investment Office should avoid making new investments in, certain industries, sectors, or companies due to a potential conflict between the University’s position on an issue or agenda that is held or advanced by such industries, sectors, or companies; and
WHEREAS, in the spring of 2020, the Joint Committee on Investments received a request from the Endowment Justice Collective, an association of several Rutgers student groups, individual students, professors, alumni and community members (“EJC”), to divest from fossil fuels, among other sectors; and
WHEREAS, pursuant to the process, the Chair of the Joint Committee on Investments (“Chair”) and the University’s Executive Vice President – Chief Financial Officer (“CFO”) determined EJC’s request regarding fossil fuels should proceed to the next step in the process, which is to form an ad hoc committee to evaluate the divestment request and make a recommendation to the Joint Committee on Investments; and
WHEREAS, the Chair and CFO formed an ad hoc committee of students, faculty members, and administrators from across Rutgers University that conducted its work of evaluating the divestment request in light of the three major elements set forth in the Investment Policy’s process regarding divestments requests, and concluded its work by submitting the attached written report dated February 22, 2021 to the Chair and CFO; and
WHEREAS, as further described in the ad hoc committee’s Report, the ad hoc committee recommends that the University divest from fossil fuel investments by taking the following actions:
WHEREAS, on March 5, 2021, the Joint Committee on Investments (“JCOI”) reviewed and discussed the ad hoc committee’s report and determined that the ad hoc committee properly evaluated the divestment request, agrees that the recommendations can be enacted in accordance with the fiduciary responsibilities of the boards, and recommends that the Board of Governors and the Board of Trustees adopt the ad hoc committee’s recommendations for divestment from fossil fuels; and
WHEREAS, in addition to adopting the ad hoc committee’s recommendations, the JCOI (i) states for the sake of clarity that these recommendations also include divestment from fossil fuel investments held in separately managed accounts owned by the University within the Long-Term Investment Pool, and (ii) recommends that the Investment Office report progress of this divestment initiative annually.
NOW, THEREFORE, BE IT RESOLVED that, upon the recommendation of the JCOI, the Board of Governors and the Board of Trustees of Rutgers, The State University of New Jersey, each agrees that Rutgers should divest from fossil fuel investments as more specifically described in the ad hoc committee’s report attached hereto and adopts the ad hoc committee’s recommendations; and
BE IT FURTHER RESOLVED that the Investment Office should (i) implement the recommendations within the parameters described in the report while also being mindful of its fiduciary duty to apply the standard of care applicable to investment offices generally, and (ii) report progress on this divestment initiative annually; and
BE IT FURTHER RESOLVED that the Board of Governors and the Board of Trustees of Rutgers, The State University of New Jersey, hereby thank each and every member of the ad hoc committee for agreeing to be part of the committee, and for the work, effort, and time each member contributed to the process; and
BE IT FURTHER RESOLVED that the University’s Investment Policy (University Policy 40.2.14) be amended by adding a copy of this Resolution as Appendix C thereof; and
BE IT FINALLY RESOLVED that this Resolution shall take effect upon approval by the Board of Governors and Board of Trustees.
Attachment: Report of the Ad Hoc Committee on Fossil Fuel Divestment
Board of Governors
Rutgers, The State University
of New Jersey
March 9, 2021
“To ensure transparency of this initiative, the Investment Office will report on the progress of this divestment annually,” said Tilak Lal, chair of the boards’ Joint Committee on Investments and co-vice chair of the Board of Trustees.
Currently, approximately 5 percent of the university’s $1.6 billon endowment consists of fossil fuel investments. Sixty percent of these investments are in private funds, and the remainder are in public equity or fixed income accounts.
“The committee carefully considered the concerns of Rutgers community members along with the ethical and fiduciary responsibilities of the investment committee and the boards as we unanimously reached our recommendations,” said Brian Ballentine, chair of the ad hoc committee and Rutgers senior vice president for strategy.
Fossil fuel investments are investments in any company or fund whose primary business is the exploration or extraction of fossil fuels, including coal, oil and natural gas, or whose primary business supports this sector with infrastructure and other services, the committee noted.
Rutgers student groups and others have voiced their support for divestment from fossil fuels, and many of the report’s recommendations stemmed from their participation.
“Divesting from fossil fuels aligns with our scarlet values and with the university leadership on important issues that students rightfully expect from Rutgers. Students like me have expressed our desires to see the university rapidly decrease its carbon footprint and will be proud to see Rutgers taking this step,” said Zunaira Wasim, a junior at Rutgers University-New Brunswick, one of four students who served on the committee.
The university has undertaken major initiatives toward carbon neutrality, including the President’s Task Force on Carbon Neutrality and Climate Resilience, which has been charged to develop a comprehensive plan for carbon neutrality and climate resilience. Other significant steps include joining the University Climate Change Coalition, participating in the “We Are Still In” pledge on climate action, investing in alternative energy sources and implementing initiatives to develop more sustainable business practices and infrastructure.
The climate task force has noted that divestment from fossil fuels is aligned with the university’s goal of carbon neutrality, achieving net zero carbon dioxide emissions by reducing and balancing carbon emissions.