Ad Hoc Committee on Divestment

Nick Romanenko

Charge

In spring 2020, a group of Rutgers students submitted a request that the university divest from fossil fuels. The chair of the Joint Committee on Investments (JCOI) and the Chief Financial Officer made a preliminary determination that the students’ request appears to meet the standards outlined in the Investment Policy and recommended the establishment of an ad hoc committee to advise the JCOI on the divestment request.

The Ad Hoc Committee on Divestment, chaired by Senior Vice President for Strategy Brian Ballentine, responded to its charge by assessing the views of the university community, carefully considering the ethical and fiduciary responsibilities of the investment committee and the boards, and recommending appropriate next steps. The ad hoc committee committed to conducting an inclusive, thoughtful review process that can serve as an example for future reviews.

Ad Hoc Committee Recommendations

The Ad Hoc Committee on Divestment completed its final report in February 2021, proposing the following recommendations:

1. Cease all new investments in funds whose strategy is focused on fossil fuel investments
2. Divest from passive index funds with exposure to fossil fuel investments within one year and reinvest in environmentally friendly versions of those indices. In addition, actively seek new investment opportunities in renewable energy and energy efficiency categories provided they deliver competitive rates of return
3. Exit all currently held private fossil fuel investments within 10 years, or as soon as practicable
4. Because some commingled funds may hold minimal exposure to fossil fuels, emphasize the university’s stance on this topic to investment partners, urging them to review their own processes and decisions regarding the inclusion of such assets in client portfolios.

Resolution

 On March 9, 2021, acting upon the JCOI’s endorsement of the ad hoc committee recommendations, the Rutgers Board of Governors and Board of Trustees approved a resolution to divest from fossil fuels.