Students File Novel Fossil Fuel Divestment Complaint Aimed At UNM Endowment

UNM LEAF News:

Today, students, faculty, and staff at the University of New Mexico (UNM) asked the New Mexico Attorney General to investigate whether the UNM Foundation’s Endowment investments in fossil fuels violate New Mexico state law.

The complaint, spearheaded by UNM LEAF (Leaders for Environmental Action and Foresight), with the assistance of the Climate Defense Project, calls on Attorney General Hector Balderas to investigate whether the UNM Foundation, as a non-profit public charity, has violated the New Mexico Uniform Prudential Management of Institutional Funds Act (UPMIFA) by investing contrary to its charitable mission.

At issue is an estimated $28.95 million of the Foundation’s $579 million Consolidated Investment Fund (or Endowment) that is invested in fossil fuels.

This is the first time this novel legal approach is being applied to a university in an oil and gas state where companies in which the UNM foundation invests are directly contributing to the degradation of the health of and well being of state residents, according to the complaint.

The strategy was used successfully by students seeking divestment at Cornell University. Most recently, the strategy compelled Harvard University to commit to fossil fuel divestment in September after students filed a complaint with the Massachusetts Attorney General in March. 

Unlike other nonprofits, the complaint argues, charities cannot invest to maximize returns at any cost. Their resources must be put to socially beneficial ends that further their charitable purpose. UNM and the Foundation have many policies and missions that promote stewardship of cultures and the environment, sustainability, and the rights of future generations.

UNM LEAF and other signatories contend that investing in the fossil fuel industry is at odds with these stated values.

“As UNM LEAF students we have been organizing consistently for over two years to have UNM take concrete action on climate change – to divest the endowment from fossil fuel companies, to update the 12 year old climate plan, and to plan for a zero waste campus by 2030. Unfortunately, we have seen UNM take very little action,” said Raven Alcott of San Ildefonso Pueblo, senior at UNM and LEAF co-organizer. “New Mexico will face some of the most severe effects of climate change. Our frontline, historically underserved, and Indigenous communities will be the ones to endure those catastrophic effects to land, economy, and society. Every dollar invested in the fossil fuel industry is one against the future that our degree is supposed to guarantee. We refuse to let UNM gamble our futures away.

“They have an obligation to their students, staff, faculty, and the broader community as the biggest employer and flagship university in New Mexico, to be a leader on climate. We need large institutions like UNM to do their part and follow through on their responsibilities and take a leadership role to create a renewable, bright future for us all.” 

Other signatories include UNM faculty, physicians, alumni and UNM student organizations as well as Indigenous organizations such as Dine Care and Pueblo Action Alliance, Tewa Women United and The Red Nation religious, and environmental groups and civic leaders such as Sen. Antoinette Sedilillo Lopez, who is a former UNM Law School professor.

The complaint identifies 28 companies in which the Foundation invests through its public equity index funds that operate in New Mexico. These companies are responsible for releasing 32 million tons of CO2-equiv. along with thousands of tons of smog-making NO2 and volatile organic compounds (VOCs), as well as hazardous air pollutants and particulate matter, and produced water and oil spills that have degraded the land and threatened the lives of New Mexicans especially those living in frontline communities.

They also produce enough oil, gas, and coal to power 33 coal plants a year and release 129.7 million metric tons of  climate-warming gases into the atmosphere.  Most likely, there are  more fossil fuel companies operating in New Mexico that are held in the Foundation’s private equity portfolio, but these are not publicly accessible.

At UNM over the last two years UNM LEAF and the UNM Coalition on Climate have urged the UNM Leadership to address climate change on many fronts including investments but have been largely unsuccessful. UNM Leaf and signatories would like to see divested funds invested in clean energy and climate change solution projects, especially locally, in New Mexico.

Divestment efforts at UNM have a long history. From 2013-2015, 350NM co-founder Tom Solomon attempted to persuade the UNM Regents, who oversee the Foundation’s investment policy, of the poor long-term prospects for fossil fuel investments as well as the dangers of climate change from the continued use of fossil fuels.

But the Foundation and the Regents rejected this advice and instituted a policy specifically prohibiting Environmental, Social, and Governance (ESG) screens, in which the environment, social, and governance context of a stock are taken into account when considering whether to invest in it or not. The University of California (UC) is one of many institutions that have adopted ESG screens as a way to lower portfolio risk. The UC system sold all of the fossil fuel investments in its $126-billion endowment and pension portfolio in May 2020. 

UNM LEAF leader Emily Phan spoke this morning at the international Invest Divest Conference, announcing UNM LEAF’s complaint to the Attorney General. 

UNM LEAF students and allies will rally 12-1 p.m. Friday Oct. 29 at UNM SUB to call on UNM to take climate action in partnership with Fossil Free Future National Day of Action.

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