After years of pressure from students and activists, the University of Vermont has announced plans to phase out investments in fossil fuel companies.
UVM's board of trustees on Tuesday endorsed a plan that will prevent any new fossil fuel investments and require the university to cease any existing commitments in the coming years. At a press conference following the vote, president Suresh Garimella said the decision "marked an important milestone" in the university's long-standing leadership on environmental issues.
"By voting today to divest the university's endowment of fossil fuel investments, we're extending a tradition of significant and decisive steps the university has taken that set UVM apart," Garimella said.
Fossil fuel companies comprise about 6.7 percent of UVM's $536 million endowment portfolio, including direct, commingled and private investments.
Student activists have repeatedly argued that UVM's financial support of the worst contributors to climate change undermines its commitment to sustainability.
But trustees have resisted the demands and rejected several proposals over the years on the argument that divestment would limit the endowment's potential growth and jeopardize the university's financial future.
“Our primary responsibility is to protect the endowment,” David Daigle, a former border member, said in 2013 when the board shot down a divestment proposal, the Burlington Free Press reported. "My continuing fear is that this proposal would have a significant impact on the ability to balance the risks and rewards within the endowment by cutting out a substantial portion of the economy.”
The university has defended its investment portfolio by highlighting other sustainable efforts, such as its Clean Energy Fund, which campus leaders say has contributed more than $1.5 million in dozens of green campus projects.
But critics weren't satisfied. Last year, student activists formed a group called Organize UVM that has continued to demand the university divest, bringing more than 100 people out to a January board meeting.
In response, UVM trustees created the Sustainability Work Group to explore the concept further. The group met four times since March and received more than 420 public comment submissions prior to adopting its recommendations, which the trustees approved on Tuesday.
As part of the pledge, the university will immediately end new direct investments in fossil fuels, fully divest from any public fossil fuel investments by July 2023 and allow any pre-existing, multi-year private investments to lapse. UVM stopped acquiring the latter in 2017, and trustee Ron Lumbra estimated the final commitment should expire by the end of the decade, though the vast majority of investments will be ended within the next three years.
The board will also ask fund managers to "factor the financial risks of climate change into their investment decision-making process," according to a press release.
UVM joins three other Vermont colleges — Goddard, Sterling and Middlebury — that have committed to divestment, a step taken by more than 1,000 organizations worldwide, according to gofossilfree.org.
At his press conference, Garimella commended students for their continued advocacy. "I'm really proud of the way they approached this issue in a constructive — and therefore, I think, effective — fashion," Garimella said.
Lumbra agreed. "The board appreciates all the research they conducted and their sincere effort to understand the full complexity of the issue," he said.
At the same time, the trustee acknowledged that financial considerations factored heavily into the decision. He said the long-term outlook of fossil fuel stocks have become bleak due in part to the rise of the green economy, which has in turn offered new and profitable ways to invest in sustainable companies.
"The world's changed," Lumbra said. "The opportunity for us to divest now, and do it in the right way, and keep the mission of the university focused on the environment, all came together at this time."
Organize UVM noted the board's vote in an Instagram post that praised the efforts of both current and former students.
"This could not have happened without each and every 3k+ of you who signed our petition, came to a board meeting, a regular meeting, posted, emailed a board member, or showed your support in any way," reads the post. "It also would not have happened without the 10+ years of fossil fuel divestment movements before this one."
Noting that UVM remains "far from perfect," the group vowed to continue its efforts.
"But for now, we celebrate," the group wrote. "Thank you all for fighting to protect our planet!"