Princeton University
PA-8: Committee on Investor Responsibility

The Resources Committee of the Council of the Princeton University Community was established in 1970 to “consider questions of general policy concerning the procurement and management of the University’s financial resources.” The Resources Committee is responsible for recommendations to the University Trustees as to when the Trustees should take a position regarding issues of broader social concern. The key criteria used in making this determination include the presence of “considerable, thoughtful, and sustained campus interest,” determination that a core University value is at stake, and the ability of the University community to reach consensus on a response.

Prof. Blair Schoene, Associate Professor of Geosciences (Chair) Prof. Bo Honoré, Class of 1913 Professor of Political Economy Prof. Michael Littman, Professor of Mechanical and Aerospace Engineering Colette Johnson, Graduate Student, Department of English Grace Obiofuma, Undergraduate Student, Class of 2018 William Pugh, Undergraduate Student, Class of 2020 Carolyn Ainslie, Vice President for Finance and Treasurer Janet Finnie, Director, University Health Services Sits with the Committee in non-voting capacity: Cecily Swanson, Director of Studies, Mathey College Susan Ciniglio, Senior Associate, Princeton University Investment Company Brandon Gaines, Division Project Manager, Office of Finance and Treasury

During the previous three years, the Resources Committee reviewed proposals related to three primary issues: (1) fossil fuels and sustainability, (2) companies involved in Israel’s activities the West Bank, and (3) private prisons. After evaluating the first two issues in depth, the Committee declined to recommend any action to the University’s Trustees. The Committee continues to evaluate the proposal for disassociation from the private prison industry and has yet to issue its conclusion.

Princeton University’s primary mechanism for consideration of investment-driven social responsibility issues is the Resources Committee of the Council of the Princeton University Community. The Resources Committee was created in 1970 and includes members of the faculty, undergraduate students, graduate students, and staff. The key criteria for consideration of issues, including matters of environmental or social concern, are the presence of “considerable, thoughtful, and sustained campus interest,” determination that a core University value is at stake, and the ability of the University community to reach consensus on a response. The Resources Committee has a broad mandate to help identify issues of concern to the University community, provide opportunities for discussion and education, research and review alternatives, and recommend a course of action that shares broad support across campus constituencies. When appropriate, the Resources Committee makes investment recommendations to the Trustees regarding issues of broad social concern. At a time when the University’s portfolio included substantial investment in traditional stocks and was managed directly by the Trustee Committee on Finance, the Resources Committee made proxy voting recommendations to the Trustees. However, as investment instruments changed and the Princeton University Investment Company (PRINCO) assumed day-to-day management of the Endowment, the number of opportunities to vote proxies decreased significantly. PRINCO, an internal unit of the University responsible for investing the Endowment, allocates all but a very small fraction of the portfolio to commingled funds and partnerships in which proxy votes cannot be controlled directly. As a result, the Resources Committee stopped evaluating proxy ballots and instead devoted its energies to creating a venue to discuss investment-related issues of significant interest more broadly. This venue allows the Committee to contemplate and implement change on a larger and more systemic basis than the very narrow, indeed negligible, basis provided by proxy voting. Princeton believes this approach is more likely to create opportunities for individual and institutional change and is more effective and efficient than a narrow focus on proxy voting and investment restrictions.