BANGOR, Maine — The University of Maine System board of trustees voted unanimously Monday to partially divest itself from investments in the coal industry, making it the first land-grant higher-education institution in the country to cull a fossil fuel from its portfolio.
The trustees approved the system’s new “coal divestiture policy,” which directs the system’s equity and fixed income investment managers to eliminate investments in coal mining companies from the system’s portfolio and to “negatively screen” for coal to prevent such investments in the future.
The change has a relatively small effect on the system’s overall portfolio. The University of Maine System has a total of about $1.7 million tied up in coal investments, most split between the managed investment pool and the operating fund, both of which have a coal exposure of about 0.3 percent, according to a report by New England Pension Consultants.
With the divestment agreed upon, the system will drop $502,000, of its coal investments. The policy does not liquidate coal investments that are included in mutual or commingled funds, according to the system. UMaine spokesman Dan Demeritt has said this policy divests from coal wherever there is a “straight-line opportunity” to do so.
Still, divestment sends a powerful message, according to student advocates with Divest UMaine groups, part of a national movement calling on higher education institutions to rid themselves of investments in the fossil fuels industry.
Brooke Lyons-Justus, a UMaine sophomore speaking on behalf of Divest UMaine, joined other speakers during public comment before the vote in calling on the system to divest.
Speakers said that Maine’s universities play a vital role in educating and training scientists in fields that are directly affected by climate change, which has been driven in large part by the use of fossil fuels worldwide.
She said the divestment advocates were not “an outside force” but rather a concerned group of young people who have invested in the university and have a vital stake in the future of the planet.
“The risk [of divestment] is low, but the message is strong,” Lyons-Justus said.
The trustees’ vote was met with applause and high fives from the more than two dozen students and alumni from the University of Southern Maine and the University of Maine and other campuses who turned out in support of divestment.
The move does not divest the system from all investments in coal and other fossil fuels because consultants cautioned that such a move would hurt the system’s ability to manage risk, diversify and seek returns. The fact that the system uses mutual funds, commingled funds and limited partnerships for its investments make it difficult to reduce fossil fuel exposure through negative screens.
Last month, Divest UMaine held a demonstration outside Fogler Library on the University of Maine campus, calling on the system to divest itself from all fossil fuel investments.
The University of Maine System proposal was modeled after one Stanford University adopted earlier this year.
Trustee Bonnie Newsom said she would like the system to consider future divestments from other fossil fuels or other parts of the University of Maine System portfolio. The divestment also had widespread support among the university system presidents.
In other business, the system expects to announce finalists for the University of Southern Maine presidency on Tuesday.
The nationwide search brought in 80 applications, according to system trustee Jim Erwin, who called it an “excellent response.”
The system already has interviewed eight candidates. The finalists announced Tuesday will visit the University of Southern Maine for two-day visits to meet with staff, faculty and students.
“We were very pleased with the quality and diversity of the pool,” Erwin said during Monday’s meeting.
System Chancellor James Page is expected to bring a recommendation to the trustees during the board’s next meeting in March. The new president will replace interim president David Flanagan.
Follow Nick McCrea on Twitter at @nmmcrea213.