The University of California has sold around $200m direct holdings in coal and oil sands firms due to growing environmental concerns and financial risks.
The university, which has around $10bn fund in the form of various energy industry investments.
The University of California chief investment officer Jagdeep Bachher was quoted by Reuters as saying that slowing global demand, an increasing regulatory environment against coal mines prompted the decision.
According to Bachher, the profitability of firms focused on developing crude from Canadian oil sands has also come down due to weak global oil prices.
The university has taken the decision after the California Assembly approved a new bill, SB 185 (De León), which helped the state pension funds, California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS), to divest their investments in coal firms.
The bill was passed on a 43-27 vote and it will now be forwarded for governor’s approval.