Stanford Getting Rid of $18 Billion Endowment of Coal Stock 208
mdsolar sends this report from the NY Times:
"Stanford University announced Tuesday that it would divest its $18.7 billion endowment of stock in coal-mining companies, becoming the first major university to lend support to a nationwide campaign to purge endowments and pension funds of fossil fuel investments. The university said it acted in accordance with internal guidelines that allow its trustees to consider whether 'corporate policies or practices create substantial social injury' when choosing investments. Coal's status as a major source of carbon pollution linked to climate change persuaded the trustees to remove companies 'whose principal business is coal' from their investment portfolio, the university said."
Re:$18.7 billion?! (Score:0, Interesting)
Almost every individual university in the US is a billion dollar company purely on tuition intake alone. That anyone still believes these institutions exist for educational purposes is ignoring the reality of the industry it has become.
To the contrary (Score:3, Interesting)
By selling Stanford will put downward pressure on the stock of coal companies, which means they have less capital against which to borrow and pay executives their stock options. It will take more and more stock options to keep the insiders happy, which will put further pressure on the stocks as other stockholders recognized they are soon to be the last guy out and the one holding the bag. If owned stock in a coal company, I would be selling as quickly as possible and moving into solar, wind and other renewables, since these will be the growth industries of the future, while fossil fuels will be creating more and more pollution and health problems for more and more people, leading to more litigation, more calls for regulation and less profits, especially as the world grows hotter and hotter and the 99% figure out they are being stuck with the tab. Its bad enough that oil companies have been raising prices recently to fund lobbying and campaigning for their favorite republican candidates. As fracking leads to more earthquakes and health and water issues, expect to see the profits in the fossil fuels sectors decline as those in the alternative energy industries rise as new technologies power increase efficiencies and growing public acceptance. It will only take one El Nino to drive this point home to all but those most deeply in denial.
Misleading... (Score:2, Interesting)
First of all, Stanford does not own $18B in coal stocks. 18B is the ENTIRE endowment amount. Coal stocks are a small fraction of the total.
Now that that little correction is out of the way....
Stanford seems to me to be making an entirely political statement. Selling all of their coal stock is not going to change the supply of coal by even an ounce. Someone else will simply buy the shares.
I wonder how many of those coal plants are producing electricity that powers all those Teslas that I see on the roads here? The electricity has to come from somewhere and there are not enough Solar panels to meet the need. Other options? Nuclear? Not in California.
Almost any way you slice it, power generation is a dirty business.
Shouldn't the responsibility of the endowment trustees be strictly fiduciary? In other words, manage the money and leave the political grandstanding to someone else.