Princeton University Investment Company walks back divestment from publicly traded oil and gas companies

The Princeton University Investment Company (PRINCO) has ended its divestment from publicly traded oil and gas companies, according to a letter from PRINCO President Vincent Tuohey published Monday. The University will maintain its previously-established dissociation from the thermal coal and tar sands portions of the fossil fuel industry.

PRINCO, which manages the University’s endowment, has set a net-zero emissions goal for the University endowment portfolio by 2046, according to the letter, which is the same year as the University’s campus net-zero target. As a step towards achieving a net-zero endowment, PRINCO previously committed to eliminating all of its holdings in publicly traded fossil fuel companies in 2022. At this time, the University dissociated from 90 fossil fuel companies involved in thermal coal and tar sands, as mandated by the Board of Trustees.

In the letter, Tuohey described the change in divestment policy as part of PRINCO’s “revised approach” to balancing support for the University’s research mission and its commitment to climate sustainability.

“Our revised approach will give PRINCO greater flexibility in managing an endowment whose resources are critical for financial aid and scientific research –– including climate research –– at a time when our sector is under financial strain,” Tuohey wrote. 

The letter stated that it is “not obvious”  whether the University’s previous approach to fossil fuel divestment had any meaningful impact on moving the endowment towards its net-zero goal. Tuohey added that major energy companies may not be “out of bounds” for the new 2046 target. 

“This sector will necessarily play a significant role in the clean-energy transition we want for our nation and for the earth,” the letter reads. “These are questions we will explore in the years to come.” 

The University provided an update in February 2024 that PRINCO had completed its divestment of endowment holdings in publicly traded fossil fuel companies. The University most recently updated its list of companies subject to fossil fuel dissociation to include 1,769 companies meeting the dissociation criteria.

According to the University FAQs on fossil fuel dissociation, dissociation is defined as “refraining, to the greatest extent possible, from any relationships that involve a financial component with a particular company.” The University may also accept funds from these same companies that meet the dissociation criteria “if and only if those funds will be used for research projects that aim to produce environmental benefits.”

Accepting research funding from companies meeting the dissociation criteria was a change made in October 2024 after the University found dissociation to have had a “disparate and unfair impact across [the] faculty.” Following the change, the University opted to no longer publish the names of companies that meet the criteria for dissociation. 

Last fall, the University and the fossil fuel company BP decided against renewing a funding agreement for the Carbon Mitigation Initiative, ending a long-running partnership.

Divestment is defined by the FAQs as “a decision to refuse to invest in a company or set of companies and entails the sale of all securities associated with a company.” 

In February 2026, PRINCO reduced its long-term endowment return projections from 10.2 percent to 8 percent per year, anticipating an endowment value $11.3 billion lower and an annual payout $500 million lower than the previous forecasts. As of October 2025, Princeton’s endowment was valued at $36.4 billion.

This year’s annual “State of the University” letter from University President Christopher Eisgruber ’83 outlined the arrival of additional budget cuts as a result of the downturn in endowment growth. 

Tuohey also underscored that U.S. government policy may constrain the University’s ability to achieve its new 2046 net-zero commitment. 

“It’s important to note that whether we achieve this target is to a meaningful degree contingent on sustained U.S. government policies that encourage reduced emissions, on the accelerated deployment of decarbonization technologies in the economy, and on consumer and industrial adoption of these technologies,” Tuohey wrote. 

Tuohey’s letter also points to a 2022 column in the Princeton Alumni Weekly by Eisgruber arguing that the heart of Princeton’s climate strategy is the commitment to scholarship and the educational mission of the University. 

“The transformative impact of our faculty’s research and the intellectual and leadership contributions that our students and alumni make to the world will far outweigh the effects of any dissociation choices we might make,” Eisgruber wrote. 

In making the case for PRINCO’s revised approach to achieving a net-zero endowment, Tuohey committed to annual updates on progress and serious engagement with Princeton’s impact on “a more sustainable climate and environment.”

“I am here making a promise to deliberately explore the issue and to provide an annual update to the Princeton community about our progress toward a net-zero endowment, a goal which we take seriously,” Tuohey wrote. 

Kian Petlin is a senior News writer for the ‘Prince.’ He is from San Francisco and typically covers University administration and the state of higher education. He can be reached at kp6408[at]princeton.edu.

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