The University prides itself on being a leader in sustainability and environmental responsibility. From conducting groundbreaking green energy research to cutting waste in dining halls, the University has taken laudable steps toward a sustainable future. Despite these efforts, the University has failed to address a looming elephant in the room: our $21 billion endowment and the companies and practices that it funds. While the University does not disclose details about the composition of its investments, analysis of comparable endowments suggests that the University has around 4 percent of its investments in fossil fuels, not including companies responsible for other drivers of irreparable environmental harm. That is, the University provides an estimated one billion dollars in support of practices that counteract Princeton’s advances toward local and global sustainability.
As a step toward resolving this regrettable inconsistency, a group of undergraduate and graduate students has prepared a proposal to incorporate environmental responsibility into the University’s management of its endowment. We intend to present this proposal to the Resources Committee - which evaluates proposed changes to University investment policy - in the near future. The Princeton University Sustainable Investment Proposal calls for greater accountability and the adoption of environmental standards in the management of the endowment. It provides a flexible and realistic framework for the development of environmentally and financially tenable investment strategies.
The Sustainable Investment Proposal calls for the University to commit to the United Nations' principles of sustainable investing, asks for an annual report documenting the environmental impacts of the University’s investments and outlines the steps by which Princeton can develop environmentally conscious investment practices. The crux of the proposal is the creation of a committee to evaluate Princeton’s current investment strategies and generate recommendations for financially and environmentally sustainable management. This committee will consist of democratically elected contingents of students, faculty, staff, members of the administration and members of the Resources Committee and the Princeton Investment Company. It may choose to engage with or shift investments away from companies with damaging practices such as fossil fuel extraction, deforestation and the distribution of anti-scientific climate misinformation; it may also choose to devote a portion of our investments to industries working towards green alternatives and ecological restoration. The committee's recommendations will be applied to a subset of the endowment for a one-year trial period, after which they may be revised. Once finalized, these guidelines must be adopted by all of the University's asset managers.
Financing environmental destruction is an injustice that directly conflicts with the University’s stated core values. In its official Sustainability Plan, the University declares that it has an obligation to maintain environmental resources for both past and future generations, and investment in environmental degradation is a failure to adhere to this obligation. Moreover, it undermines Princeton’s standing as an institution committed to finding scientific and ethical solutions to pressing environmental concerns. The University has acted to align its investments with its values in the past: It officially ceased to invest in businesses involved in apartheid in South Africa and genocide in Darfur. In the current environmental crisis, it is both an unethical and a political act to continue to invest in the businesses whose practices are responsible for increasing food insecurity, water shortages, extreme weather events and ecological collapse. It is time that Princeton join the growing number of institutions, from Stanford University to the Rockefeller Brothers Fund to the United Church of Christ, that have adopted principles of sustainable investment.
The endowment is unlikely to be significantly affected by sustainable investment. Any change to investment strategy carries risk, but a growing body of evidence suggests that over the long term - as more companies enter the green energy market and governments take action on climate change - sustainable investment practices will carry great benefits. We recognize that short-term risks exist and that such benefits are uncertain, but we also must recognize that as the wealthiest university per student in the country, the University is uniquely able and obligated to take a bold step forward on sustainability.
The University’s adoption of this proposal will have impacts that are both economic and symbolic. The growing student movement to address fossil fuel investments, most publicly in Stanford’s coal decision, has already turned heads. NRG Chief Executive Officer David Crane cited college activism when announcing his power company’s pledge to reduce carbon emissions by 90 percent by 2050. He told The New York Times, “I don’t relish the idea that year after year we’re going to be graduating a couple million kids from college, who are going to be American consumers for the next 60 or 70 years, that come out of college with a distaste or disdain for companies like mine.” Princeton can play a meaningful role in forcing a public shift towards sustainable solutions.
The University community has already shown its commitment to sustainability, from the continued on-campus initiatives of groups like SURGE and Greening Princeton to the hundreds of Princetonians who attended the People’s Climate March in New York this September. Sustainable investment will be the logical and long overdue extension of our on-campus endeavors to include the endowment.
Renata Diaz '15
Dayton Martindale '15
Matthew Romer '18
Leigh Anne Schriever '16