Georgetown University will divest from fossil-fuel companies and continue investing in renewable energy, energy efficiency and related areas, the school's board of directors decided Thursday.
The fossil fuel divestments will take place over the next five years for public companies and within 10 years for private investments.
The $1.8 billion endowment will freeze new endowment investments in companies or funds whose primary business is the exploration or extraction of fossil fuels, "on a timeline that is both financially responsible and expeditious, and the university retains flexibility with respect to commingled investment funds as needed," Georgetown University said in a statement.
Chief Investment Officer Michael Barry said in the statement that "divestment allows us to divert more capital to fund development of renewable energy projects that will play a vital role in the transition away from fossil fuels — part of the long-term solution required to prevent the most dangerous effects of climate change."
Mr. Barry said the endowment has profitably invested in the development of renewable power assets and energy efficiency companies, "but climate change, in addition to threatening our planet, is increasing the risk of investing in oil and gas companies, as we expect a more volatile range of financial outcomes. We will continue to evaluate the efforts of these companies, and be hopeful that many will move further toward contributing to a sustainable future."
The board acted on a recommendation from the university's committee on investments and social responsibility, which includes faculty, students and staff who consider proposals from the Georgetown community on socially responsible investment. The action was the result of a multiyear engagement.
Peter Marra, director of the Georgetown Environment Initiative, said in the same statement that while the decision is a major step forward, "it also one of many in a comprehensive and complex set of commitments that Georgetown is making to sustainability and to the environment more broadly. "