The American Association of University Professors has approved a resolution requesting universities and pension boards, including Penn’s retirement plan provider, to divest from fossil fuels.
Credit: Derek WongThe American Association of University Professors has adopted a resolution urging universities and pension boards, including the provider of Penn’s retirement plan, to divest from fossil fuels.
The resolution, which was passed on June 15, specifically calls on the boards of Vanguard, Fidelity, and the Teachers Insurance and Annuity Association of America to divest from fossil fuels and reinvest in renewable energy projects. TIAA is Penn’s only service provider for faculty retirement plans, and Penn is TIAA’s biggest client.
A request for comment was left with a University spokesperson.
Pitzer College professor emeritus Daniel Segal, a coordinating committee member of TIAA-Divest and a co-author of the proposal, said that the resolution communicates the collective desire of faculty to divest retirement funds from “planetary destruction.”
“[The proposal] should have happened a year ago or five years ago,” Segal said. “[Investing in fossil fuels] is ethically repugnant. As faculty, we have a responsibility to our students. There has to be a planet left for young people and there cannot be a planet as long as we are extracting and burning fossil fuels.”
“TIAA has remained consistent that we make investment decisions based on the best long-term interests of our participants and clients, in the context of the particular investment fund or account,” the group wrote in a statement to The Daily Pennsylvanian.
“We choose to engage with companies and other stakeholders across our diverse portfolio to understand and manage the transition to a new global energy ecosystem,” the statement read. “We believe that best positions us to influence change, maximize returns, and meet client demands as part of this transition.”
TIAA said further in their 2023 climate report that fossil fuels’ place in retirement portfolios reflect “their widespread past and current role in the real economy.”
The company added that divestment does little to reduce real-world emissions and “removes [TIAA’s] ability to engage with companies and assets over time.”
Wharton School professor Eric Orts told the DP that the proposal’s focus on divestment was disappointing. Though investment transparency and board disclosure are important, divestment is “a small part” of a university’s role in the climate crisis, Orts said. He added that there are no certainties regarding either the climate or sustainable investment returns.
“It's not guaranteed that you can be green and make money at the same time,” Orts said.
Orts also said that this proposal may cater more to American colleges and universities “that have not … made that kind of commitment” to divesting from fossil fuels, and that Penn has mostly fulfilled the demands outlined in the proposal.
He referenced the climate priorities in former Penn President Liz Magill’s “In Principle and Practice” strategic framework, which calls on the Penn community to ”do more” in an “all-out University effort” to combat the climate crisis.
Orts also mentioned Interim Penn President Larry Jameson’s recent announcement of a new vice provost for climate science, policy, and action, a move that indicates to Orts how “[the Penn community] really ha[s] an opportunity to incubate” beyond questions of divestment.
Germanic languages and literatures professor Simon Richter told the DP that Penn “has not made progress” in some ways compared to peer universities, including the inability of University faculty to individually divest from fossil fuel companies in their retirement plans.
He stated that divestment efforts are “thorns in the side” for the fossil fuel industry and that increasing carbon emissions underscore that “[the world] ha[s] a long way to go“ to fight the climate crisis.
According to a 2022 analysis by the Institute for Energy Economics and Financial Analysis, TIAA has a minimum of $78 billion invested in fossil fuels. TIAA is a major bondholder of Adani Group, a conglomerate that owns the Carmichael coal mine in Australia which, once developed, could emit 78 million tons of carbon dioxide annually. Additionally, Adani is the second-most exposed company to stranded asset risk of coal power stations globally, according to an analysis by Carbon Tracker.
The AAUP’s resolution passed with only one opposing vote, according to TIAA-Divest. The group says that the resolution now must be ratified by the AAUP Executive Committee, which will “direct its implementation.”
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