The University of Pittsburgh continued its push for sustainability with the release of a report on fossil fuel exposure.
“It is the university's fundamental belief that supporting responsible business practices is essential to producing strong investment results,” university spokesman Jared Stonesifer said.
The University of Pittsburgh's Finance Department Consolidated Fund Environmental, Social and Governance Report The university released its CEF update for fiscal year 2023 on May 7. The update detailed CEF’s current investments in fossil fuels and the university’s plan to phase out these investments over the next decade.
this is, Introduced in March 2020According to Stonesifer, the goal of ESG policies is to “[Balance] “Fairness, environment, economy”
“The ESG policy provides the University with a more consistent and comprehensive approach to evaluating investment opportunities,” Stonesifer said. “The University believes that certain ESG factors are logical and important considerations in a thorough evaluation of long-term risk-adjusted investment returns.”
According to the report, ESG policies incorporate elements such as greenhouse gas emissions, data protection and discrimination into the due diligence process when making investments. Fossil fuel divestment That's in line with Pitt's financial goals in recent years, he said.
“The growing importance of these topics among community stakeholders coincides with growing awareness within the investment sector of the potential benefits of considering ESG factors in investment decision-making,” the report states. “ESG factors include considerations that can improve the quality of investment decisions by presenting a deeper and more robust assessment of expected risks and returns.”
According to the report, CEF's private and public exposure to fossil fuels increased from 8.1% to 8.2% between June 30, 2022 and June 30, 2023.
“The change in total exposure to fossil fuels is primarily due to changes in the value of and increased visibility of the underlying public fund holdings and is not the result of new investment activity,” the report said.[The CEF’s private exposure to fossil fuels] Based on current trends, this is expected to be negligible by around 2034-36.”
The Ministry of Finance noted that public investment increased from 1.8% to 2.0%, while private investment decreased from 6.3% to 6.2%. Over the next decade, public investment will continue to fluctuate with the market, while private investment will decline, according to the report.
For Thomas Allen, a fourth-year political science major and president of Fossil Free Pitt, ESG policies and reports are not enough to divest from fossil fuels.
“The language around University of Pittsburgh's actual divestment plan is distorted and vague,” Allen said. “The ESG report tries to hide the fact that University of Pittsburgh appears to be backing away from its commitment to be fossil fuel free by 2035. It draws a line between the private and public sides on what 'projected to be minimal' fossil fuel investments will be.”
The report noted the university's declining private investments in fossil fuels, saying “the Treasury Department has not made any new direct investments in fossil fuel companies or new investments in fossil fuel-specific endowments in more than three years,” without mentioning a similar downward trend in public investments.
In a statement, Stonesifer explained that the university has not divested from fossil fuels or implemented a “negative screen” against them because it would incur huge financial losses.
“This loss is inconsistent with the endowment's objective of supporting the university's financial aid, scholarships, professorships, and research activities in perpetuity,” Stonesifer said, “but for fiscal reasons it was recommended that private fossil fuel holdings be reduced over time.”
Allen also expressed concern that students don't have enough influence over investment decisions.
“I think SGBs need to have a substantive role in investment decisions,” Allen said. “They can attend board meetings, but [they] They have some decision-making ability.”
