At its May annual meeting, the University of Puget Sound’s board of trustees voted to affirm its commitment to reducing fossil fuel investments in the university’s endowment and expressed its aspiration to work toward an endowment entirely fossil-fuel free.
The endowment is currently invested in a general portfolio with declining exposure to hydrocarbons and a completely fossil-fuel-free portfolio. The endowment’s overall exposure to hydrocarbons (11.5% of the pooled endowment on June 30, 2018) has declined since 2016 and will continue to decrease over time. The board’s commitment:
- Prohibits direct investments in publicly-traded companies that own fossil fuel reserves, as defined by the MSCI Fossil Fuel Reserves list;
- Prohibits new commitments to commingled private funds where the primary strategy is to make investments focused on hydrocarbon extraction, processing, and/or transportation;
- Provides a fossil-fuel-free endowment option for donors (established in 2017) who want their gifts invested in a portfolio free of companies that own fossil fuel reserves; and
- It is expected to reduce hydrocarbon exposure in commingled private funds by an estimated 40% by 2023, 55% by 2028, and additional amounts as illiquid long-term private investments continue to mature.
Puget Sound has long demonstrated its commitment to sustainability principles through its curriculum, faculty and student research, green building standards, campus operations, and community collaborations. The university introduced its environmental studies program in 1997 and has since incorporated sustainability throughout the curriculum. The university’s wide-ranging actions earned Puget Sound a Gold Rating in the Sustainability, Tracking, Assessment and Rating System (STARS) developed by the Association of the Advancement of Sustainability in Higher Education.
“The university’s Board of Trustees recognizes that climate change is global in its reach and existential in its threat,” said trustee Mitzi Carletti, a Puget Sound graduate and Seattle-based investment advisory and research analyst who serves as chair of the Finance and Facilities Committee’s Investment Subcommittee. “We take our fiduciary responsibility seriously to honor donor intent and maximize investment returns to support the campus and our students. Best practices in investment management inform our commitment to divestment, and we will continue to monitor and report annually on hydrocarbon exposure in the endowment.”
In addition to annual reporting, the trustees will formally review the divestment commitment every three years. A full copy of the statement can be found at pugetsound.edu/divestment.