Salient to Investors:
Students at more than 300 campuses, including the eight Ivy League schools, have joined fossil-fuel divestment activist group 350.org demanding that over the next 5 years universities purge their endowments of investments in 200 publicly traded companies with the largest reserves of oil, gas and coal.
Scientists estimate 350 parts per million of CO2 in the atmosphere is the safe limit for humanity. The measure is now approaching 400 parts per million, the highest in Earth’s recent geological history and considered by many scientists to be the cause of warmer temperatures, melting polar ice caps and by some calculations more severe storm systems.
David Salem at Windhorse Capital Mgmt said trustees will have trouble approving restrictions on a university’s portfolio – the long-term costs are inherently unknowable.
Universities have become so much more dependent on endowments to subsidize operations that there is little incentive to restrict investments. Energy makes up 11 percent of the value in the S&P 500.
Of the 4 alternative energy investments Yale featured in its 2009 investment report, at least 2 are foundering after natural gas prices fell. Not much is known about Harvard’s holdings because little of it is invested directly in publicly traded securities.
Carbon Tracker Initiative says oil, gas and coal stocks are overvalued because all their reserves could not be burned without destroying the planet.
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