Johns Hopkins to stop investing in thermal coal over climate change concerns

The Johns Hopkins University plans to stop investing in thermal coal because of concerns over the environmental and public health effects of climate change.

Johns Hopkins’ board of trustees voted Friday to direct the university to stop buying stocks and bonds of companies that focus on producing coal for electric power. The university also will sell securities of such companies that it owns in its endowment or in other investments.

The university would not release the names of the companies or the market value of the stocks and bonds. “It is fair to say, however, that these investments represent a relatively small portion of the university’s endowment and other investments,” said Johns Hopkins spokesman Dennis O’Shea.

The market value of the university’s endowment on June 30, the end of the last fiscal year, was $3.845 billion, O’Shea said.

It’s the third time in the university’s history that trustees have barred a type of investment because of social concerns. In the 1980s, Hopkins divested itself of companies doing business in the then-apartheid state of South Africa. And in 1991, the board voted to end investment in tobacco companies.

The decision stemmed from two years of debate about whether the university should stop investing in fossil fuel companies as part of its commitment to environmental sustainability, said Hopkins President Ronald J. Daniels.

“As an academic institution, we have a fiduciary obligation to ensure that our investments protect and support the educational and research opportunities we seek to provide for our students and faculty,” Daniels said Tuesday in a message to students, faculty and staff. “The trustees determined that thermal coal poses a unique threat to public health and to the environment—contributing more to the production of greenhouse gases per unit of electricity than other fossil fuel.”

The university will not buy stocks or bonds of companies that earn more than 35 percent of their revenue from thermal coal, which is burned to generate electricity. Hopkins also will not buy into any partnerships that have 35 percent or more of their total investments in companies whose primary business is production of thermal coal.

The board made its decision after reviewing a proposal submitted by student group Refuel Our Future, recommendations from the university’s public interest investment advisory committee, and input from students, faculty, staff and alumni. The student group had called for full divestment from fossil fuels.

Daniels acknowledged that the board’s stance did not go as far as Refuel Our Future and the advisory committee recommended, but he said it “stakes an important position” that will help influence public opinion.

A spokeswoman for 350.org, a group that opposes new coal, oil and gas projects and advocates for divestiture of fossil fuel companies, applauded Hopkins’ decision as a positive first step.

“It’s a true testament to the power that the student group on campus has built,” said Lindsay Meiman, the spokeswoman.

She said the global divestment campaign launched on a handful of campuses in 2012 and has grown to 810 institutions representing more than $5.2 trillion in assets that have committed to some level of divestment. Institutions include colleges and universities, including Boston University, Syracuse and the University of Glasgow, pension funds, insurance companies, faith-based groups, health organization and cultural and arts institutions. Last year, Barnard College announced it would divest from any companies that deny climate change.

Meiman said such campaigns have been effective.

“The purpose of divestment when we launched the campaign was to stigmatize the fossil fuel industry and to point out the role and responsibility that our institutions and investors at all levels have to choose a side, that of the fossil fuel industry or that of the people they’re meant to represent,” she said.

A spokesman for the American Coal Council said he had no comment on Hopkins’ decision.

But the group’s website says that removing coal and fossil fuel-based electricity generators and using alternative energy will not necessarily reduce carbon emissions. For instance, wind power requires backup generation by utilities, typically a fossil fuel, to guarantee power supply, the group says.

For Johns Hopkins, the divestment is part of sustainable efforts the university outlined in a 2010 climate change implementation plan, which aims to cut university greenhouse emissions by 51 percent by 2025.

Daniels on Tuesday called the goal, at the midpoint of the 15-year plan, “extraordinarily ambitious, particularly given that some predicted technologies have not come to fruition and our own growth has far surpassed our expectations. The board’s divestment decision offers both an important moment of forward momentum and an opportunity for a frank assessment of current commitments, goals, and strategies, which we plan to undertake in the coming year.”

Hopkins joins Columbia University in making a commitment to drop its coal company investments. In March, Columbia’s trustees agreed to divest from companies deriving more than 35 percent of revenue from thermal coal productions. Columbia took the step, it said, because coal has the highest level of carbon dioxide emission per unit of energy, is used globally as a source of electricity, and cleaner alternative energy sources exist.

“Divestment of this type is an action the university takes only rarely and in service of our highest values," Columbia University President Lee C. Bollinger, said in the university’s announcement in March. “We must do all we can as an institution to set a responsible course in this urgent area.”

Hopkins said it plans to begin divesting on a schedule designed to minimize financial loss.

lorraine.mirabella@baltsun.com

twitter.com/lmirabella

Copyright © 2018, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
63°