Johns Hopkins committee weighs in on proposal to divest from fossil fuels

Provost's office invites JHU community to read, respond to report during 30-day public comment period

A group charged with considering the social impact of Johns Hopkins University's investments has made four specific recommendations, including that the university divest immediately from certain holdings in 200 publicly traded coal, oil, and gas companies—known collectively as the Carbon Underground 200—and take steps to reduce other such holdings over time.

The full 41-page report issued by the Public Interest Investment Advisory Committee, or PIIAC—which comes in response to a December 2015 proposal from the student group Refuel Our Future asking the university to divest from fossil fuel companies—was published online today.

The Office of the Provost invited members of the JHU community to read and respond to the report during a 30-day public comment period. The recommendations and comments will go to a subcommittee of the board of trustees' investments committee for review.

"As educational institutions, engines of knowledge production, agents of economic advancement and investment, and sources of leadership on community, state, and national levels, universities have numerous avenues to address the challenges presented by climate change," the report says.

More than 30 years ago, the board of trustees approved its first statement on investment and created a framework to consider whether corporations in which the university invests cause substantial negative social impact. In the past, the board's commitment to responsible investing has led to the divestment of funds from companies doing business in South Africa in the 1980s and from tobacco companies in the 1990s.

In recent years, colleges and universities across the country have faced pressure to fight climate change by ending their investments in fossil fuel companies, coal in particular. Their responses have varied greatly.

Earlier this year, Harvard declined to commit to a divestment from fossil fuel companies but said it was "pausing" investments in some mineral, oil, and gas interests. Columbia recently announced it would divest from companies receiving more than 35 percent of their income from thermal coal production, and Yale said it had removed about $10 million in fossil fuel investments from its $25 billion endowment. Stanford agreed to end investments in coal mining companies in 2014, but its board voted last year not to divest from fossil fuel interests.

In the report, the committee says its recommendations align "with the university's long-standing stated commitments to sustainability and addressing climate change issues." Johns Hopkins committed in 2010 to reducing its greenhouse gas emissions by 51 percent by 2025 and thus far has achieved a 35 percent reduction.

PIIAC recommends:

  • For operating cash accounts, divest immediately from bond holdings in Carbon Underground 200 companies, defined as "a list of the top publicly traded coal, oil, and gas reserve owners ranked by the potential carbon emissions content of their reported reserves"
  • For direct investments in companies, divest as soon as practicable (to minimize the financial impact) from CU 200 companies, and make no new direct investments in them
  • For illiquid partnerships that include direct investment in CU 200 companies or holdings in fossil fuel reserves, unwind such partnerships as they come to term or before if practicable, and make no new investments in such partnerships
  • For commingled investments in the university's equity portfolio and hedge fund portfolio:
    • Monitor investment in CU 200 companies, with minimum of annual reporting of such investments and with the goal of reducing the amount of such holdings over time
    • Add the following criterion to the set of criteria used to evaluate investment managers: a commitment by the manager to avoid investment in CU 200 companies

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