UC’s Chief Investment Officer Envisions Coal-Fired Power, Cement Factories as “Green” Investment Opportunities

baccher

Jagdeep Bachher, chief investment officer of the University of California.

The news this week that the University of California’s chief investment officer (CIO) will not be recommending divestment from fossil fuel companies to the university’s governing board of regents isn’t a surprise.

A coalition of UC students, faculty, staff and alumni have pressed the UC regents to divest from fossil fuel stocks and bonds. On Tuesday, the UC’s CIO released a recommendation that regents not pursue divestment, and instead develop “a framework for the management of environmental, social , and governance considerations.”

UC’s CIO, Jagdeep Singh Bachher was recently hired by the regents to run the university’s finances, more than $90 billion in funds. Bachher previously helped run the Alberta Investment Management Corporation (AIMCo), the sovereign wealth fund of Alberta, Canada. While helping pick investments for AIMCo, Bachher steered the province’s money into coal, oil, and gas companies and projects in North America, China and beyond. He also prioritized renewable energy and clean tech investments. But nothing in his record indicates that he would support divestment from fossil fuel companies. Instead it appears that Bachher sees clean tech as simply one part of a diversified investment portfolio which includes fossil fuels.

AIMCo’s stock holdings, disclosed in this SEC filing, show that the Canadian province’s savings are concentrated in oil and gas companies. About $1.8 billion of the total $8.9 billion in stock owned by AIMCo, roughly 20% of the total, is in an oil, gas, or coal company.

AIMCo’s single largest stock investment is a $374 million stake in Bonanza Creek Energy, an oil and gas company that utilizes fracking techniques in North American oil patches.

AIMCo’s second and third biggest investment positions in publicly traded stocks are Canadian Natural Resources and Suncor Energy, two Canadian oil companies that are excavating the tar sands, arguably the most environmentally destructive energy projects in the world.

Screen Shot 2014-09-11 at 11.01.38 AMIn 2011 Bachher co-authored a paper about investment opportunities across the economies of Alberta, China and India. Bachher focused on investments in energy, calling Alberta a “veritable bank vault of natural resources,” meaning mostly oil and gas.

Bachher also portrayed these investments as opportunities to develop “clean energy,” but it’s clean energy built atop a fossil fuel base.

For example, Bachher singled out AIMCo’s investment in Calera, a California company that aims to capture CO2 emissions and use them to manufacture materials like cement. To leverage China’s five year economic plan, which includes contracting with Peabody Energy to build massive coal-fired power plants, Bachher hopes that companies like Calera will capitalize from the expansion of coal fired energy to utilize some CO2 emissions to create “green cement.”

Peabody Energy, one of the largest coal companies in the world, had a voice in UC’s recent deliberations around the question of whether or not to divest university funds from fossil fuel companies. As I reported in this week’s East Bay Express, Gregory Boyce, Peabody’s CEO, was invited by Bachher to speak to the UC regents task force considering the question of divestment.

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