Almost two years after Chief Investment Officer David Swensen added climate change awareness to Yale’s investment strategy, the endowment is starting to divest from fossil fuels.

In a Tuesday letter to the Yale community, Swensen reported that after months of talking with Yale’s external investment managers about the potential risks associated with investments in coal, oil, around $10 million of the endowment has been removed from two publicly-traded fossil fuel producers. Although Swensen did not release the names of the investment managers or companies involved, he said that by the end of Fiscal Year 2015, Yale’s $25.6 billion endowment had only minor exposure to the oil and coal industries.

“A few managers held positions we felt were inconsistent with our principles,” Swensen wrote. “Thermal coal miners and oil sands producers are two of the obvious industries that would suffer if regulation imposed the social cost of the carbon emissions on producers.”

In August 2014, two of Yale’s external managers were investing the endowment in industries that Swensen said were inconsistent with Yale’s principles. These included thermal coal miners and oil sands producers.

At Swensen’s prodding, both managing firms sold their coal and oil sands holdings. The founder of one of the firms agreed climate change and carbon pricing were “unknowable risks and fossil fuel producers with significant carbon footprints were declining businesses, a profile the firm preferred to avoid.”

Yale’s investment strategy combines in-house endowment management with a host of external investment managers. Swensen’s letter suggests that these external managers have listened to and showed support for the recommendations Swensen made in 2014. But instead of arguing for divestment on ethical grounds, as Fossil Free Yale has in the past, Swensen said the shift from some fossil fuel industries makes financial sense because regulations on the social cost carbon emissions could hurt industries like coal and oil.

“The Investments Office believes the risks of climate change, like any risks, should be incorporated in the evaluation of investment opportunities,” Swensen wrote. “Initiating and continuing a dialogue with our managers about those risks results in more thoughtful consideration of investment opportunities, higher quality and lower risk portfolios for yale, and better environmental outcomes.”

While climate activists have condemned Yale’s holdings in fossil fuel industries, Swensen said Yale’s investment managers should also consider the implications of climate change when evaluating farmland acquisitions in southern locations or the risks of owning low-lying coastal real estate, which could be vulnerable to rising sea levels.

For almost five years, student groups like Fossil Free Yale have urged the University to divest completely from the fossil fuel industry.

Yale’s endowment saw a 11.5 percent return in Fiscal Year 2015.