Remarks of Regent Mark J. Bernstein
Last February, at our last in-person board meeting before COVID, this board announced that we would consider our investment policy with regard to fossil fuels.
I am deeply grateful to my board colleagues, President Schlissel and everyone, especially our exceptional students and faculty, who participated in the thorough, inclusive process over the past year that impacted our work in this urgent and important deliberative process.
The challenge we face is that we have to cut the 51 tons of greenhouse gases we produce every year to ZERO by 2050 in order to stop global warming and avoid the worst effects of climate change. At the same time, almost a billion people have no access to reliable energy sources, which is a huge problem if we want to improve global health and economic opportunity for impoverished nations and their citizens. It’s important to remember that participating as a global citizen is part of our university’s mission.
In order to address this problem, we have to do things differently — and that includes the way we invest our money.
The University of Michigan must (and will) lead on this issue for six reasons:
• This is the biggest, most urgent crisis we have ever faced. Everything is on the line here. It has been said that “We are the first generation to feel the effect of climate change and the last generation that can do something about it.”
• This is a big and complicated problem, and the University of Michigan is in the business of solving big, complicated, consequential problems. Leaders don’t shy away from hard challenges. We must do this, as President Kennedy once said about a different daunting challenge, not because it is easy, but because it is hard. If we want to be the leaders and best, then we need to act like leaders and best.
• This is about fairness and equity. Those who suffer the most due to climate change — the poorest and most vulnerable people on our planet – have done the least to cause the problem.
• This is a global problem, and, as we all agree, we’re a global university. The massive scale of our international investment portfolio must address the risks of the climate crisis.
• This is about managing investment risk and returns. Investments that do not fully address climate risk are bad investments that in addition to destroying our planet also damage the performance of the endowment that we depend upon to fund our mission of teaching, research and service.
• This is uniquely related to the research, scholarship and teaching that occurs on our own campus that confirms the causes and consequences of climate change. We have a unique responsibility to address the very crisis we study every day.
With regard to university investments, the question, therefore, isn’t “should we do something about climate change?” but “What should we do about climate change?” And the answer is “everything!” We should do “everything” possible to tackle this problem, financially — that’s what this is about — and operationally — that’s what the President’s Commission on Carbon Neutrality addresses.
So, what are we doing? Today, the University of Michigan adopts a comprehensive, concrete investment plan to address the climate change crisis.
A few top universities like the University of California, Columbia, and Brown have already adopted some of these policies. But we want — and must — do more. That’s why I’m proud to be the very first public university in the United States to adopt all of the following four commitments:
• The University will not invest in companies that are primarily engaged in oil reserves, oil extraction or thermal coal extraction.
• In addition to these companies, the University will not directly invest in companies that are the largest contributors to greenhouse gases, currently defined as the top 100 coal and top 100 oil and gas publicly traded reserve holders as identified on the Carbon Underground 200 list.
• The University will shift our natural resources investment focus toward renewable energy investments; and
• We are making a commitment to reduce all greenhouse gas emissions from our entire $13 billion investment portfolio to net-zero by 2050, which aligns us with the deadline set by the 2015 Paris Climate Agreement. Importantly, the Investment Office will provide annual reports to the Board of Regents in public session detailing the status of progress toward this commitment.
Here’s why our commitment to a net-zero investment portfolio is an essential: Carbon is used, and greenhouse gas emissions are created throughout the economy. It’s not just isolated to “traditional” fossil fuel investments.
• In fact, these investments account for only 7.5 percent of our endowment and 18 percent of total greenhouse gas emissions in the global economy.
• Twenty-eight percent of total greenhouse gas emissions come from materials, such as steel, concrete, plastic, and glass manufacturing.
• Transportation, hospitality, health care, technology, real estate, consumer discretionary, consumer staples and service industries also produce tons of greenhouse gas emissions.
So, while discontinuing investments in fossil fuel companies is necessary — and we are doing this — we need to do more to get the job done. We can’t afford to only solve 18 percent of the problem. We have to solve 100 percent of the problem.
A net-zero investment policy addresses 100 percent of the problem because it covers 100 percent of our investments, not just fossil fuel investments.
Finally, I want to address our students who have been thoughtful, well informed, relentless and, in the end, successful in moving this issue to the very top of our agenda. We are among the first but certainly not the last university to make these commitments. So, I say to the leaders of these institutions: listen to your students, they are knocking on your doors. Let them in and learn from them. They will educate you, they will motivate you, and they will inspire you to do the right thing.
Remarks of Regent Jordan Acker
Thank you, President Schlissel, and thank you, Regent Bernstein, for your remarks. And thank you for your hard work on this existential issue. Without your leadership and the energy you have brought, we would not have reached to this point.
But I want to use my remarks to directly address our students, who have advocated so passionately.
Probably you have met negativity and nay-saying. You have heard from people who’ve said you are too young and that you couldn’t possibly understand. Many of you have been told that you bring passion but no expertise. Likely, there were moments where you felt like you were yelling into the void about the most important issue of our generation, the threat of climate change.
Those voices are wrong.
Because your activism matters. Your voice matters. Your passion matters. Your viewpoint matters.
Many people of our generation — my generation — have missed this moment, you haven’t. You recognized the importance of this issue. And you saw the impact our institution could have in this fight.
You spoke out. Your meetings and calls – including an impromptu we had in the basement of Espresso Royale — they mattered.
Keep advocating, keep organizing, keep speaking out. There will be times we disagree. There will be times we agree. But through your advocacy, you have made our campus a better place, and the world a better one.
Don’t ever let anyone tell you that you’re too young or too inexperienced to make a difference.
