Students at Yale and other top schools ask AGs to probe fossil-fuel investments

Jane Fonda leads Fire Drill Fridays outside the U.S. Capitol in Washington
A sign protesting fossil fuels is seen on the lawn outside of the U.S. Capitol in Washington, U.S., October 18, 2019. REUTERS/Sarah Silbiger
  • Students say the investments are imprudent and risky
  • Harvard ended its investments in fossil fuels late last year

(Reuters) - Students at five top-rated universities working with The Climate Defense Project have filed complaints with their states' attorneys general to investigate whether their schools' fossil-fuel investment holdings violate state laws governing investments by charities, according to a press release Wednesday.

The complaints, filed by climate activists at Yale, Princeton, Stanford, Vanderbilt and the Massachusetts Institute of Technology, follow ones from students at Cornell, Harvard and other top schools over the past two years, also aided by Climate Defense Project.

Harvard decided in September to pull fossil-fuel investments from its $53 billion endowment, though the school did not say the complaint was part of its decision. Rather, it said it was ending its investment in fossil fuels, "consistent" with an earlier goal to achieve "net-zero" greenhouse gas emissions from investments by 2050.

Wisconsin's attorney general said it lacked the authority to investigate allegations made by students at the University of Wisconsin-Madison in 2021. The other complaints are pending.

Wednesday's complaints allege violations of the schools' fiduciary duties under their states' Uniform Prudent Management of Institutional Funds Act (UPMIFA), which requires investments made by charitable institutions to be managed prudently and in good faith.

Stanford spokesperson Dee Mostofi said that the school is "confident that (its) investments fully comply with all applicable laws regulating charities in California."

Portfolio managers and university spokespeople at the four other schools from Wednesday's complaints did not immediately respond to requests for comments.

Susan Gary, a professor of law at the University of Oregon who was involved in the drafting of UPMIFA, said that "a prudent investor would want to consider climate risk," but factoring in those risks does not necessarily mean divesting altogether from fossil fuels.

The complaint by the student-led Yale Endowment Justice Coalition says that "prudent investment practice cannot be squared with the ownership of fossil fuel assets." It adds that investment in the oil, gas and coal sectors has become "excessively risky."

Joshua Doh, a Vanderbilt senior studying environmental sociology said that "having the privilege to attend these top universities with immense amounts of wealth, we have the opportunity to divert millions and millions of dollars of funds from the fossil-fuel industry."

Spokespeople with the attorneys general of Connecticut and Massachusetts said they were reviewing the complaints, while the offices of the attorneys general of New Jersey, California and Tennessee did not immediately respond to requests for comment.

The five schools' endowments range in value from $42 billion at Yale to $10 billion at Vanderbilt. The complainants say each school's endowment counts a few hundred million dollars' worth of fossil-fuel stock.

Read more:

Students target Johns Hopkins, UNM over fossil fuel investments

Harvard University to end investment in fossil fuels

(NOTE: This story is updated to include comments from Stanford.)

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Thomson Reuters

New York-based correspondent covering environmental, climate and energy litigation.