Earlier this week, Boston University Board of Trustees announced that they had decided to divest its endowment from fossil fuels.

According to an open letter dated September 23 and posted on the school’s website, President Robert Brown said the board had made its decision earlier in the week.

Since September 22, the school will no longer make direct investments in companies that extract fossil fuels. It will also divest from current direct investments in fossil fuel extractors and will not engage in any new investments in dedicated fossil fuel products in any asset class.

However, the school has private investments in fossil fuels that will likely take more than a decade to disappear according to reports from Justin Mitchell.

The statement also said the endowment will seek investment managers who can provide opportunities in renewable energy sources and “fossil fuel-free products.”

Brown’s letter also stated that only “a very small fraction “of the university endowment is invested in “producers and extractors of fossil fuels”, which makes the decision to divest “economically inconsequential”.

According to Mitchell, the endowment is valued at over $ 3 billion, according to the Boston University website, and it had about $ 2.4 billion at the end of fiscal 2020, according to one. annual report of the National Association of College and University Business. Officers.

Boston University is the latest leading university endowment to announce a divestment from fossil fuels, joining the University of California, Brown University, Cornell University, Georgetown University, and Harvard University, by engaging in this type of divestment program.

Triple Bottom Line – BU has joined the growing chorus of large institutions that have started to divest their endowments in fossil fuel investments. While BU’s announcement is not individually too statistically significant numerically, the number of large higher education institutions continues to grow and gain momentum. As more and more higher education institutions join this chorus, it is likely that the divestiture of fossil fuels will become more than one-off and could become a trend in the ESG space.