This article is more than 5 years old

This article is more than 5 years old

The University of California has sold off $200m (£130m) of coal and oil sand investments from its $98bn investment fund less than a year after initially refusing to do so.

In September of last year, the university’s board of regents chief investment officer Jagdeep Singh Bachner refused to sell off the holdings, arguing that a more “holistic approach” than divestment was needed.

But he said that a drop in global demand and stricter regulations had now made such investments too risky, reports Reuters.

The university has not changed its policy though and says it may purchase such coal or oil investments in future if the market changes.

At a board of regents meeting on Wednesday, Bachner said: “For us, this is not just about here’s a set of beliefs and a set of values, we are going to be transparent about it on our website. We’ve gone one step further as part of our house keeping and managing risks over the course of the year, and selling our direct holdings, to reiterate, in coal mining companies, oil sands focused companies.”

The board manages a $98bn portfolio made up of its pension, endowment and working capital invesments. Campaigners say that $3bn of this is made up of “fossil fuel related” investments.

Bachner said the university will factor a carbon price into its investment approach towards energy utility companies.

Despite a three year campaign by students across seven of the university’s 10 campuses, the move took divestment campaigners by surprise.

Founder of 350.org, the environmental NGO that has galvanised the global fossil fuel divestment movement tweeted: “Um, developing story: it looks like the Univ of California is divesting its enormous portfolio from coal and tar sands oil. If true – wow.”

Bill McKibben (@billmckibben) Um, developing story: it looks like the Univ of California is divesting its enormous portfolio from coal and tarsands oil. If true--wow

The fund is almost triple the size of Harvard’s endowment, where students have been leading a high profile divestment campaign, occupying Massachusetts Hall where the university’s president is based and even taking the university to court.

The university’s decision comes a week after a landmark bill was passed in California to divest the state’s pension funds – the largest in the US – from thermal coal. Newcastle’s city council in Australia, home to the world’s biggest coal port, also recently voted to exit their holdings in major banks if they do not divest.

Known for years as the most successful divestment campaign in history, the movement has now persuaded more than 390 institutions worldwide to divest from pension funds to universities to faith organisations.