The University of Maine Board of Trustees provided an update at their meeting on Jan. 29 regarding the eight-year plan to cease fossil fuel exposure by 2030. An official resolution to do so was passed on May 23, 2022. The initiative is outlined by short-term action and long-term goals.
Fossil fuels, such as coal, oil and gas, are the leading contributors to global climate change. The timeline of UMaine’s divestment process up to this point dates back over a decade. Since 2013, impact approaches have been discussed, and a complete divestment from coal was approved in 2015.
The Manage Investment Pool (MIP), Operating Fund and Pension Fund are the three portfolios that allocate money to companies that produce fossil fuels. The total amount invested went from $13.8 million in 2016 to $6.7 million by the end of 2023.
According to the chart provided by Kelly Regan on page 12 of the board’s meeting agenda, the first measurements revealed fossil fuel exposure to be approximately 2.5% on Jan. 31, 2016. The total decreased to 1.1% as of Dec. 31, 2023.
“We’ve continually looked at asset allocation changes where we can improve our fossil fuel exposure. Moving from credit investments and fixed income to US treasury investments, when it makes sense, can reduce the fossil fuel exposure, and it has happened in a couple of these portfolios,” said Regan.
The most significant of the investment portfolios was a 70% basis point decline of the MIP from about 2% exposure in 2022 to about 1.3% 18 months later.
The other two portfolios are more conservative-based, with the Pension Fund being reduced from 1.3% to 1% and the Operating Fund decreasing from 0.8% to 0.7% within that same time frame.
“In terms of the next steps, an APC investment consultant will continue to work with the investment committee to find ways to reduce the fossil fuel exposure in the mutual funds and commingled funds,” said Regan.
The short-term goal to eliminate exposure from direct investments has been accomplished, and UMaine intends to continue working toward a complete withdrawal by 2030.
