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Fossil Free Campaign Humboldt State UniversityDivesting Fossil Fuels From University Endowments Socially Responsible InvestingWhy Focus of Fossil Fuels??2Presentation SummaryClimate Science, Climate Crisis, and the Cost3 Important NumbersStop, Drop and Roll (Fossil Free Campaign)Current HSU InvestmentsWhy Divest?Risk of Investing in Fossil FuelsMarginal Risk of Fossil Free InvestingPathways Forward Conclusion

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Estimated change in sea waterpHcaused by human createdCO2between the 1700s and the 1990s, from theGlobal Ocean Data Analysis Projectand theWorld Ocean Atlas8

Melting glacier9

Melting glacier10

Colorado floods, 201311

Hurricane Katrina Aftermath12

Colorado fires, 201313

Hurricane Sandy aftermath14

Mountain top removal15

Tar sands extraction16

3 Important Numbers

Current Global CO2 Reserves

Stop, Drop, and Roll

Fossil Free Campaign Stop investing in the 200 fossil fuel companies with the largest carbon reserves immediatelyDrop all existing investments in the companies over the next two yearsRoll out fossil free and climate risk adjusted investment strategy Climate Risk Adjusted Investment Strategy:Freeze fossil fuel investments in the 200 largest fossil fuel companiesReinvesting a minimum of 5% of the portfolio in fossil-free investments. Strategic reallocation across all asset classes to manage climate risk and embrace sustainable investment opportunities21Fossil Free CampaignSchools with Divestment Campaigns and Petitions

FFCA HSU22Fossil Free CA & HSULarge and Growing Student Support Active campaigns within universities across the state

Students covered by several national and international media outlets about UC campaign and divestment at SFSU

Emily was on NPR

Katie quoted in article for higher education

Ophir quoted in the LA times

Future of Energy - 23Universities and Municipalities that have moved to DivestUniversitiesSan Francisco State University FoundationHampshire CollegeUnity CollegeSterling CollegeCollege of the AtlanticGreen Mountain College

CitiesSeattle, WASan Francisco, CAPortland, OREugene, ORBerkeley, CARichmond, CASanta Monica, CABoulder, COSanta Fe, NMMadison, WIBayfield, WIState College, PAIthaca, NYTruro, MAProvincetown, MAProvidence, RICambridge, MANorthampton, MAOther Notable DivestmentsNorwegian Insurance and Pension Fund Company StorebrandWallace Global FundUnited Church of Christ

Organizations Supporting FFCA

Supported by national and local organizations

UCOP policy fo sustianbilty in CSSC25Historical Divestment Movements

Divestment protest from Apartheid, Colombia University27

Nelson Mandela speaking at the Oakland coliseum, as part of a US speaking tour, 9 months after being released from 27 years in prison. He thanked the students at UC Berkeley and across the country that had helped to bring an end to apartheid through the efforts for divestment.28Current HSU Investments29

Why Divest?

If it is wrong to wreck the climate, it is wrong to profit from that wreckage.-Bill McKibbenAlignment with ValuesHSU is known for environmental stewardship and leadershipImportant factor in recruiting studentsMaintaining strong values important for alumni relationships and fundraising

HSU Advancement Foundation Investment PoliciesThe general policy shall be to diversify investments among both equity and fixed income securities so as to provide a balance that will enhance total return while avoiding undue risk concentration in any single asset class or investment category.The Board of Trustees of the California State University adopted a resolution urging auxiliary boards, which make corporate investments to issue statements of social responsibility and to follow those precepts in examining past and considering future investment policies.The Foundation Board of Directors recognizes and accepts its social responsibility with respect to the investment of funds.In 2009, the UN Environmental Program Finance Initiative released a study where it argued that it is the legal responsibility of fiduciaries to integrate environmental, social and governance criteria into investment decisions.

35Investing in Fossil Fuels is Risky businessRegulatory RiskPhysical RiskLitigation RiskCompetitiveness RiskReputation Risk

36The Carbon BubbleReserves are at the heart of an oil and gas company because they represent what can be taken from the ground in the future. Since companies must replace the oil and gas they produce each year just to stay even, reserve growth is a crucial indicator of how well a company is doing. If the reserve size falls, the company is less valuable to investors and its stock price will tumble.-Wall Street JournalThe Carbon BubbleShells stock dropped 6-7% after announcement of 20% overstated reserves in 2004.Peabody Energy shares dropped 3.2% to $14.54 a share, while Walter Energy finished day down 11.6% at $10.03, after President Obama's climate speech. Shares of Peabody Energy have plunged 49% since hitting a 52-week high in November. Walter Energy has lost 75% of its value the past year and most of those losses have come within the past five months. USA TodayIn February 2013 the US Energy Information Administration (EIA)warnedthat diminishing returns to scale and the depletion of high productivity sweet spots are expected to eventually slow the rate of growth in tight oil production. Oilprice.com

World Energy Outlook (2012 edition) estimated that in order to have a 50% chance of limiting the rise in global temperatures to 2C, only a third of current fossil fuel reserves can be burned before 2050 -IEA (2009)

In a low-carbon environment, a material proportion of the worlds undeveloped reserves of fossil fuels could become `unburnable -HSBC (2012)

Past performance and creditworthiness may be insufficient to guide investorslooking to understand the possible effects of future carbon constraints on the oil sector-Standard & Poors (2013) A major shift in investor attitudes is leadinginstitutional investors around the world toundertake [risk and returns] analysis because of a growing realization of the potential profoundimpact climate change may have on their existing portfolios -Deutsche BankBuilding AwarenessMarginal Risk Associated with Divestment

Impax Assessment Management [1]: Compared 5 funds portfolios in 5-7 year period with annual returns ofMSCI World Index Fund: 1.8%

Fossil Free Portfolio: 2.3%

Fossil Free Plus Alternative Energy (Passive): 1.9%

Fossil Free Plus Alternative Energy (Active): 2.2%

Fossil Free Plus Environmental Opportunities (Active): 2.3%Aperio Group. Do the Investment Math: Building a Carbon-Free Portfolio[1]:Impax Management Beyond Fossil Fuels: The Investment Case for Fossil Fuel Divestment. July 4, 2013. http://www.impaxam.com/media/178162/20130704_impax_white_paper_fossil_fuel_divestment_uk_final.pdf. 40

Fee concernsThe Green Century Balanced Fund has out performed the Vanguard Balanced Index Fund over the past 3, 5, and 10 years including fees41Pathways Forward

42Other Work at HSUCampus Center for Appropriate TechnologyWaste Reduction Resource Awareness ProgramBicycle Learning CenterHumboldt Student Food CollectiveNatural Resources ClubHSU Sustainability CoalitionPower Save Green CampusHumboldt Energy Independence FundGreen Graduation Pledge

ConclusionDivestment is the first step in addressing the multi-faceted injustices perpetuated by the fossil fuel industry Fossil Free and Climate Risk Adjusted Investment Strategies are prudent considerations given the economic, social, ecological and financial risks of the fossil fuel industrys current business modelThe Advancement Foundation should consider immediately freezing fossil fuel investments in the 200 largest fossil fuel companies and dropping all investments in the next two years, reinvesting a minimum of 5% of the portfolio in fossil-free investments, and strategic reallocation across all asset classes to manage climate risk and embrace sustainable investment opportunities.Discussion and commentary