Yale University's board of trustees approved a new set of five principles to guide decisions regarding potential fossil-fuel divestment in its $31.2 billion endowment.
The principles, applicable to fossil-fuel producers and companies, state that they should neither explore for, produce, or supply fossil fuels that result in high greenhouse gas emissions when there are feasible alternatives; should operate in a manner consistent with best industry practices to reduce those emissions; support sensible government regulation and industry self-regulation; support accurate climate science; and provide transparency to Yale and Yale's managers regarding all those practices.
The principles were developed by a multidisciplinary six-member Committee on Fossil Fuel Investment Principles, which included Xinchen Wang, a director in Yale's investments office, and Benjamin Polak, a Yale professor of economics.
The committee, formed by Yale President Peter Salovey in October, submitted the recommendations in January to the Yale board of trustees, which approved the principles earlier this month, according to an April 16 news release posted on Yale's website.
The principles function as requirements for fossil-fuel producers and companies to remain eligible for investment in Yale's endowment, and the news release said it is expected the first set of divestment recommendations related to the principles will be made in June.
"The adoption of these ethical investment principles exemplifies the university's deep commitment to promoting the development and use of clean, sustainable, and renewable energy," Mr. Salovey said in the news release. "Climate change is an imminent threat to the planet, and tackling it in an effective way requires difficult but necessary choices."
The adoption of the principles is the latest in the university's evolution in its approach to fossil-fuel investment.
In 2014, Yale University's Corporation Committee on Investor Responsibility approved new environmentally conscious guidance for the campus-based Advisory Committee on Investor Responsibility when investing on behalf of the university's endowment, but decided against recommending fossil-fuel divestment. The 2014 guidance instructed the university to support reasonable shareholder resolutions "seeking disclosure of greenhouse gas emissions, the impact of climate change on a company's business activities and products, and strategies designed to reduce the company's long-term impact on the global climate including through the support of sound and effective governmental policies," Mr. Salovey said in a statement at the time.
Yale spokeswoman Karen Peart could not be immediately reached for further information.