UNC Asheville becomes first in UNC system to divest from fossil fuels

ASHEVILLE – Never underestimate the power of a bunch of squeaky-wheeled students to get the grease, or in this case, to get rid of the grease, in the fight for a more environmentally and socially conscious campus, and world at large.

On June 21, the UNC Asheville Board of Trustees made state history by voting to divest a portion of its $50 million endowment from fossil fuels, becoming the first university in the UNC system to do so. The resolution is even more impressive, university officials said, because it was initiated and led by student action.

With the board’s vote, UNCA will shift about 10%, or $5 million, of its endowed funds to Walden Asset Management, a manager focused on investing using ESG, or environmental, social and governance, criteria and research and promoting shareholder advocacy.

The project is managed by UNCA’s vice chancellor for administration and finance John Pierce, director of sustainability Sonia Marcus, and associate vice chancellor for advancement operations Ben Underwood.

The remaining 90% of the endowment will remain with UNC Management.

The multi-year process at making a commitment to reduce the university’s reliance on the oil, gas and coal extracting industry, is a testament to student perseverance, Pierce said after the unanimous vote.

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Students formed a group called UNCA Divest in 2014 and through the years held protests, tabled on the Quad to inform other students, attended board of trustee meetings, and incorporated the campaign into classroom coursework. As student leaders graduated, they passed the torch to a younger generation.

“Our students have been diligent and perceptive in working through the complexities of ESG investments from both a mission-based and financial perspective. Together, we explored alternatives and worked toward solutions,” Pierce said. “It is a real sense of pride.”

“I’m so excited,” said James Smith, 21, a former co-director of UNCA Divest who graduated this spring with degrees in chemistry and environmental communications.

“It has been years of work from the student end. To see the UNCA administration finally get excited and take this project on with us, it showed us they care about this issue.”

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Smith’s work with UNCA Divest was recognized this spring with the A.C. Reynolds Award and Thomas D. Reynolds Prize, one of the university’s most prestigious service awards. He presented his research at the UNC System Energy Summit at Appalachian State University and the Global Climate Action Summit in San Francisco. He plans to continue working in the field of sustainable investing in Thailand and Japan.

“I have also seen the tremendous impact that is possible through shifting investments not only away from areas that are contributing to climate change, but towards climate solutions in a way that is environmentally and socially responsible,” he said.

In February 2016, UNCA’s Board of Trustees established a student-advised endowment fund with $10,000 in seed money to give students hands-on experience in ESG investing. The fund continues to be managed by the University’s Student Environmental Center.

“As a student interested in financial advising, specifically pertaining to sustainable investments, seeing the range of potential firms and a glimpse into their respective processes was incredibly beneficial,” said Erika Covey, a senior double major in management and economics, who serves as the ESG Fund intern.

Kelsey Hall, a junior studying environmental policy management, has been working with UNCA Divest for more than a year and attended the June 22 Board of Trustees meeting.

“This is a really exciting first step that has a lot of potential to gain more momentum in terms of UNCA or UNC system or others around the Southeast or the country to take more action in this direction,” Hall said.

UNCA Divest is a member of the statewide Reinvest NC Coalition, a group of other universities seeking to divest from fossil fuels.

“We actively work with other students at UNC Wilmington, Appalachian State, Chapel Hill and NC State. The hope is for other UNC schools to follow UNCA’s lead,” she said.

“This is one of the proudest moments I’ve had while working, and I think a lot of that has to do with being proud of the students,” said Marcus, who has worked in campus sustainability issues for 15 years.

“Many generations of students worked with little or no direct rewards. It’s so gratifying as a change agent and educator to see students really dig into something meaningful to them and make substantial change … They showed that real change is possible and nothing can be better than that in terms of what a university has to offer,” she said.

UNCA joins two private schools in Western North Carolina - Brevard College and Warren Wilson College – which divested endowed funds in 2015.

Pierce said the decision not only makes moral, but financial sense for the university. He said a 2017 National Association of College and University Business Officers study shows that college and university endowments that use socially responsible investing strategies can produce long-term returns that are equivalent to those of non-SRI users.

Underwood said students worked with administration and the board of trustees in researching funds. UNCA issued a request for information in 2017, with more than 30 respondents including international investment companies.

One of Walden’s appealing qualities was their track record and in-house expertise around socially conscious investing, specifically in fossil free-investing, he said, as well as their transparency in revealing which companies they invest in.

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“The research demonstrates that ESG investing can yield positive returns, and that’s particularly important when our investments fund scholarships. This process has been a learning opportunity for all of us, from the students who learned about finance to the staff who are working on this groundbreaking initiative,” Underwood said.

UNCA Chancellor Nancy J. Cable called the vote Friday “a defining moment” for the university.

“It took creativity and critical thinking, financial acumen and a sense of the common good to imagine what is possible, carefully consider the options and focus on the outcomes,” she said.