Stanford University has finalised plans to divest its shares in coal mining companies held in a $18.7bn endowment fund, joining the growing number of institutions ending their investments in fossil fuels due to concerns about climate change.
The decision comes on the recommendation from the university's advisory panel on investment responsibility and licensing (APIRL), which comprises students, faculty, staff and alumni.
The panel spent several months reviewing the social and environmental implications of investment in fossil fuel firms that are primarily engaged in coal extraction for use in energy generation.
The university said it will divest any current direct holdings in such companies and recommend its external investment managers to avoid funding these public companies as well.
Stanford president John Hennessy said: "Moving away from coal in the investment context is a small but constructive step, while work continues at Stanford and elsewhere to develop broadly viable sustainable energy solutions for the future."
A student-led group Fossil Free Stanford had asked the university to divest from 200 fossil-fuel extraction companies, as part of a national divestment campaign.
The request was reviewed by APIRL's Environmental Sustainability Sub-Committee, which carried out extensive research and gathered inputs from other constituencies.
APIRL agreed with the findings of the UN Intergovernmental Panel on Climate Change on the role of fossil fuels in changes to the global climate system, and said that the use of coal for electricity production generates higher greenhouse gas emissions than other fossil fuels, such as natural gas.
The move by the college follows a campaign by climate groups which targeted US universities and colleges in 2011. Since then 11 colleges have agreed to divest their stakes from fossil fuel.
Image: Stanford Univeristy will exit investments in fossil fuel firms that are primarily engaged in coal extraction for energy generation. Photo: courtesy of dan / FreeDigitalPhotos.net.