More people join call for UNM Foundation to divest from oil and gas

Accusations that the University of New Mexico Foundation violates state law around public charities and conflicts of interest appear to be gaining momentum.

The foundation invests in oil and gas, and some of its members have ties to the industry. But are those ties close enough to constitute a legal violation? A group fighting for fossil fuel divestment thinks so, and a complaint before Attorney General Hector Balderas has pulled in over 220 signatures and counting. Notable signatories include State Senate President Pro Tem Mimi Stewart, former Albuquerque Mayor Martin Chavez and former Public Lands Commissioner Ray Powell.

The number of people signed on to demand that the UNM Foundation divest from fossil fuels has more than doubled since a fall rally on campus, according to a Dec. 20 news release by UNM Leaders for Environmental Action and Foresight (LEAF). 

Climate scientists who authored the state’s 50-year water plan signed on, too. The plan was published in 2018 by the Office of the State Engineer and it projects “staggering” temperature increases of between 5 and 7 degrees Fahrenheit in New Mexico by 2050, generating a profound loss of available water. The oil and gas industry contributes more than half of the greenhouse gases in the entire state, according to a 2020 Climate Change Task Force report.

The LEAF complaint, filed with the AG’s Office in late October, states that the UNM Foundation “may not simply seek profit at any cost: the privileges that the Foundation enjoys as a nonprofit institution, and its obligation to support the public purposes of the state’s flagship institution of higher education, come with the responsibility to ensure that its resources are put to socially beneficial ends.”

The state’s Uniform Prudent Management of Institutional Funds Act requires the foundation not to endanger the public through its investments, the complaint states.

LEAF identifies 28 companies in which the foundation invests through its public equity index funds that operate in New Mexico. It asks Attorney General Hector Balderas to investigate the foundation and order it to cease its investments in fossil fuels.

Complaint: UNM Foundation invests in fossil fuels while its board members work in the industry

LEAF members said they met with representatives of the Attorney General’s Office on Dec. 17.

“Overall, I am pleased that the Attorney General Hector Balderas is taking the divestment complaint against the UNM Foundation seriously. Ultimately, it’s great to see the state show interest in the welfare of all New Mexicans,” said Cassandra Huneau, a UNM LEAF leader.

The complaint also accuses members of the foundation’s Board of Trustees and the UNM Regents of maintaining significant financial ties to the fossil fuel industry.

These conflicts of interests violate the “duty of loyalty” spelled out in the state’s prudent management law, according to the complaint, “because fossil fuel companies’ business models are in fundamental tension with the university’s mission” and the values the foundation espouses to hold.

The university and the foundation are different from traditional investors, the complaint argues, because UNM’s mission imposes a special legal responsibility to screen assets for their possible interference with the foundation’s and university’s goals.

This conflict of interest extends to the regents because they oversee the foundation’s investment practices through performance reviews and annual approval of investment practices, according to the complaint.

LEAF names member Regent William H. Payne, who was the state co-chair for the American Legislative Exchange Council (ALEC) in 2012 and a member of ALEC’s Energy, Environment and Agriculture Task Force. ALEC is a corporate-funded organization that writes “model bills” for state lawmakers, which often directly benefit these corporations.

The Rio Grande Water Advocates (RGWA) also joined the complaint, saying UNM investments in fossil fuels will make life harder for people in New Mexico.

“New Mexico is the driest of the United States,” wrote Norm Gaume, a member of RGWA and a former interstate stream commissioner. “Temperature increases from greenhouse gasses will rob New Mexico of a huge amount of its current sparse water supplies. Protect our water. Divest to protect New Mexico’s future.”

UNM president’s priorities ‘not related to divestment’

After students, faculty and elected officials rallied on campus on Oct. 29, UNM LEAF students went into the administration building in Scholes Hall. Video reviewed by Source New Mexico shows the students speaking to President Garnett Stokes.

“My own focus related to climate action is not related to divestment. It’s related to the impact that UNM has in this environment and what happens here in New Mexico and so that’s where my priorities are,” Stokes told the students in the video.

Stokes said in a written statement on Dec. 21 that university officials know they must be more ambitious as climate action leaders, which includes reducing their own climate impacts. 

She said climate action is a significant part of UNM’s planning for 2040, which will be reflected in broad institutional priorities, and she appreciates the commitment of UNM’s student and community activists voicing their desire to see the UNM Foundation immediately divest from fossil fuels.

Stokes added that as a public institution, UNM is advancing climate change research and working to reduce the school’s carbon footprint.

She pointed out that UNM has a more sophisticated utility plant than any university in the country, which she said saves about $2.5 million each year and reduces UNM’s carbon footprint by 39% annually.

“We have a lot of pockets of individuals throughout our institution that are working on issues associated with climate,” she told the students back in October. “We know that our populations are affected by a lot of what’s happening related to climate.”

UNM has faculty studying Indigneous populations and issues associated with climate change, she told the students. She said they should expect that at the highest levels of the institution, they are developing a plan that takes action quickly.

“I will acknowledge that this has been slower than I wanted it to be. There is no question in my mind,” she said. “I remember clearly hearing from this group about, ‘Yes we know there’s COVID, but there’s another emergency.’ … And so I think we should have a conversation in three months and see what we’ve been able to accomplish between now and then.”

In a written statement, LEAF leader Sofia Jenkins-Nieto said her group has been fighting for fossil fuel divestment as a means of mitigating climate change through tangible action.

“To hear straight to our faces, directly from President Stokes, that it’s not a priority, feels like a slap in the face to all the work we’ve put in and all that we’ve been asking of UNM,” Jenkins-Nieto said. “Especially after not hearing back from the president’s office since April, it shows that they lack the urgency that the climate crisis needs from them.”