In May 2015, President Eisgruber and the Council of the Princeton University Community Resources Committee rejected the Princeton Sustainable Investment Initiative’s proposal for sustainable management of the Princeton endowment. Eisgruber wrote, “It would be a profound mistake to create an investment policy that took political stands regarding the business activities of energy companies.”
In this stance, Eisgruber has neglected to heedthe University’s commitment to sustainability and environmental ethics. The financial support of companies involved in environmental destruction and climate change denial runs counter to the University’s values, as stated explicitly in the Princeton University Sustainability Plan and implicitly in the research of its scientists. Moreover, the University has taken political stands in the past,divesting from companies involved in apartheid in South Africa (in 1978) and violence in Darfur (in 2006), to varying degrees. A University committee recently endorsed a target for the University to be carbon neutral by 2046 — shouldn’t the University’s investment policies be consistent with its direct goals?
While Eisgruber may think Princeton’s responsibility ends at the FitzRandolph gate, major institutions worldwide are rethinking their ethical investment responsibilities. Universities such as Stanford, UMass and Georgetown have removed all their direct investments in coal. The University of California has sold off $200 million worth of holdings in coal and oil sands. Large non-educational institutions such as the Rockefeller Brothers Fund, theUnited Church of Christ, major insurance company Allianz and Norway’s sovereign wealth fund — the world’s largest at $900 billion — have either made plans to sell off their stocks in all fossil fuels, or to sell their stocks in coal at the least. In the face of increasing impacts from anthropogenic climate change, these institutions and universities are taking actions to reduce the contribution of their investments to the problem.
Last year’s rejected proposal to the CPUC Resources Committee did not call for immediate divestment, but rather, a series of steps to advance more environmentally responsible investment practices such as signing the Carbon Disclosure Project, adopting the United Nations Principles for Responsible Investment (as Harvard has done), and creating a committee to oversee management and distribution of financial resources.The proposal was signed by over 1600 students, faculty, staff and alumni, but after receiving President Eisgruber’s letter and consulting with the Princeton University Investment Company, the CPUC Resources Committee rejected the proposal on all counts.
This year, PSII has developed a new proposal which demands that the University: 1. Immediately remove holdings in all coal extraction companies, and 2. Commit to gradual divestment from all other fossil fuels. This proposal focuses specifically on coal, which is both the most carbon-intensive fossil fuel and the worst source of air pollution. Coal contributes approximately 40 percent of the world’s greenhouse gas emissions. Air pollution from coal causes over 350,000 premature deaths in China alone each year and is estimated to inflict health costs of over 100 billion dollars per year in the United States, which neither coal companies nor their investors pay for. Moreover, the value of coal companies have decreased sharply – coal stocks fell by almost 50% in 2015.
Low-carbon investment funds that match the returns and risk profiles of existing benchmarks are emerging, and hedge fund managers and central banks alike are beginning to acknowledge the financial risks posed by fossil-fuel stocks and the likelihood that fossil fuel assets will become stranded.
In light of the fact that the ethical and financial cases for fossil fuel divestment continue to grow stronger, that more and more institutions are deciding to divest and that the University has committed itself to become carbon neutral, PSII believes it is time that the University’s endowment reflect its values on climate change and divest from coal.
Princeton Sustainable Investment Initiative
The Princeton Sustainable Investment Initiative is a student-led organization that seeks to make the University practice more environmentally sustainable investment. They can be contacted at pusustainableinvestment@gmail.com. Their petition can be signed here.Read More
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