California State University (CSU) system Chancellor Joseph I. Castro announced the CSU system will no longer invest in fossil fuel on Oct. 6. Three portfolios the CSU system uses to invest their money are Systemwide Investment Fund Trust (SWIFT), Intermediate Duration Portfolio (IDP) and Total Return Portfolio (TRP).
Castro spoke on the transition of the CSU system divesting from fossil fuels.
“Consistent with our values, it is an appropriate time to start to transition away from these types of investments,” Castro said. “Both to further demonstrate our commitment to a sustainable CSU, but also to ensure strong future returns on the funds invested by the university.”
Back in May, Castro and CSU’s Investment Advisory Committee (IAC) looked over CSU investments to make sure it was congruent with the university’s financial responsibilities and its commitment to sustainability.
The IAC Committee shared its recommendations with the Castro:
- Liquidating fossil fuel-related bonds held in SWIFT as soon as reasonable, and restricting future fossil fuel investments for that same portfolio and the IDP.
- Transition out of the TRP’s direct energy mutual fund and into other non-fossil fuel mutual funds.
- Work as appropriate and feasible to further reduce fossil fuel exposures in the TRP, which due to legislative restrictions, is limited to mutual funds.
- Allow CSU investment managers discretion to continue to invest in businesses that are successfully transitioning to sustainable green business models.
Castro is moving forward on implementation of these recommendations.
The University of California system, Harvard, Boston University and multiple other institutions have announced plans to divest from fossil fuel.
A big push for the CSU system came after a nine-month long student-led CSU campaign called “Divest the CSU from Fossil Fuels.”
Ethan Quaranta, Divest CSU leader of CSUMB, expressed during a press release that “having the biggest domino fall in the CSU divestment push is exciting to see, and surely brings momentum to our campus level divestment pushes, too.”
“As we are a system of higher education, we look forward to pushing campus level divestment harder moving forward,” Quaranta said. “While our general message won’t change, our strategies will.”
Robert Easton, CSU Assistant Vice Chancellor, provided the CSU Divestment group with the information the CSU system has roughly $155 million in shares of fossil fuel companies, including over $80 million in Chevron and ExxonMobil bonds. These rough numbers fluctuate.