About Divestment

UVA’s Investments in Fossil Fuels

UVA’s Endowment and investment in fossil fuels

As of 2021, UVA’s endowment is worth $14.5 billion. The actual contents of the portfolio are kept confidential, although some aspects are made public in UVIMCO’s annual reports. Annual reports group investments together under broad categories such as public and private equity. Any investments into fossil fuel companies are under the title of “real assets”, which also include investments into retail, hospitality, and more. “Real assets” make up 10% of UVA’s investments, which translates to $1.45 billion. UVIMCO has not publicly disclosed any more information as to how or where these assets are invested.

Reasons for Divestment

Sustainability

The United Nation’s Intergovernmental Panel on Climate Change (IPCC) offers an annual report on the state of the global climate. According to the IPCC, 86% of global carbon dioxide (CO2) emissions are the result of fossil fuel burning. The IPCC estimates that humans have caused a total global increase in temperatures of 1.07 degrees Celsius. Each of the last four decades has been successively warmer than any decade that preceded it since 1850. The IPCC found that human fossil fuel emissions have caused a significant increase in precipitation, retreat of glaciers, ocean acidification, rising sea levels, heatwaves, storms, droughts, and more. Global warming of 1.5°C and 2°C will be exceeded during the 21st century unless deep reductions in CO2 and other greenhouse gas emissions occur in the coming decades. This would be higher temperatures than the Earth has seen in over 3 million years. With every additional increment of global warming, changes in extremes continue to become larger and accelerated. Droughts, extreme storms, heavy precipitation, heatwaves, rising sea levels, melting polar ice caps, and other environmental degradations will therefore not only increase, but increase at increasing rates. The IPCC found that “from a physical science perspective, limiting human-induced global warming to a specific level requires limiting cumulative CO2 emissions, reaching at least net zero CO2 emissions, along with strong reductions in other greenhouse gas emissions.”

In short, the burning of fossil fuels emits gasses that not only warm our atmosphere but in turn threaten our physical health and safety through increased drought, extreme storms, heat waves, ocean acidification, rising sea levels, and more. Climate change is an existential threat that poses risks to every aspect of our lives and the health of the Earth, and the most prominent climate scientists in the world agree that the only way to stop climate change is to reach at least net zero carbon dioxide emissions. Investment into fossil fuels is actively causing climate change and the degradation of the Earth, and UVA must divest from the industries to prove its commitment to sustainability.

Equity

In the United States, Black people are exposed to 38 percent more air pollution than white people. They are also 75 percent more likely to live in communities that are near an industrial facility that creates some form of harm or inconvenience, such as chemical emissions and odor, than the average citizen. The NAACP found in a 2017 study that Black people face far higher rates of asthma, cancer, lung disorders, and premature death than the national average due to disproportionate exposure to environmental hazards. This is due to the legacies of racism and segregation, and the practice of many governments in placing landfills, power plants, waste facilities, etc. in low-income and Black neighborhoods.

In the United States, Native American reservations occupy only 2% of the land but hold approximately 20% of the country’s fossil fuel reserves. Tribal sovereignty has been undermined by fossil fuel development, including the approval of the Dakota Access Pipeline, Mountain Valley Pipeline, and Line 3 Pipeline.

The burning of fossil fuels is impossible without the exploitation of Indigenous lands and the placement of health burdens on Black and Brown people. The effects of climate change are disproportionately felt by marginalized Black, Indigenous, and people of color (BIPOC), poor people, and people in the Global South. Investment into fossil fuels perpetuates environmental racism and exacerbates harm experienced by these communities.

Finance

As of 2020, 44 institutions of higher education in the United States have committed to full divestment, including Harvard, Yale, Columbia, Brown, Boston University, Georgetown, Stanford and the University of California system. Universities that divested years ago like Syracuse maintain positive growth rates and large endowments. This list includes universities with the largest endowments of any in the country, demonstrating that investments in fossil fuels are not necessary for maintaining a large or rapidly growing endowment. The city of Charlottesville also voted to divest from fossil fuels in 2019.

Financial markets are rapidly turning away from fossil fuels due to poor public perception and shifts toward renewable energy. According to CNBC, the energy sector represented as much as 25% of the index in 1980 and still 15% a decade ago. Now energy is under 3% of the U.S. stock market.

UVA has a responsibility to manage its endowments in a way such that future generations of students can be beneficiaries of said endowment. Continued investment in the fossil fuel industry serves to contradict this obligation by threatening the world its students will inherit.