Overall Rating Gold
Overall Score 68.42
Liaison Kristi Wiedemann
Submission Date Aug. 25, 2021

STARS v2.2

Princeton University
PA-10: Sustainable Investment

Status Score Responsible Party
Complete 2.01 / 5.00 Jennifer Birmingham
Managing Director
Princeton University Investment Company
"---" indicates that no data was submitted for this field

Total value of the investment pool:
26,600,000,000 US/Canadian $

Value of holdings in each of the following categories:
Value of holdings
Sustainable industries (e.g., renewable energy or sustainable forestry) 460,000,000 US/Canadian $
Businesses selected for exemplary sustainability performance (e.g., using criteria specified in a sustainable investment policy) 267,000,000 US/Canadian $
Sustainability investment funds (e.g., a renewable energy or impact investment fund) 353,000,000 US/Canadian $
Community development financial institutions (CDFIs) or the equivalent 0 US/Canadian $
Socially responsible mutual funds with positive screens (or the equivalent) 0 US/Canadian $
Green revolving funds funded from the endowment 0 US/Canadian $

A brief description of the companies, funds, and/or institutions referenced above:

The University’s holdings referenced above roughly comprise sustainably grown timber, renewable energy, conservation agriculture, clean-tech assets, education technology assets, battery technology and electric vehicles, as well as holdings in certain industries such as waste management and water treatment. The $460 million represents the value of Princeton’s holdings in sustainable assets, which have been acquired outside of funds focused solely on sustainable investments, while the $353 million represents the value of Princeton’s holdings in such funds. The $267 million invested in businesses selected for exemplary sustainability performance primarily comprises real estate investments that are LEED or similarly certified.

Notably, PRINCO takes social responsibility considerations into account on a regular basis in overseeing the investment of Princeton’s Endowment, and all of the external managers with whom PRINCO partners consider environmental, social, and governance factors when making investments. We believe that the figures above understate our exposure to investments that promote environmental sustainability, but they represent a literal interpretation of the categories’ descriptions.


Percentage of the institution's investment pool in positive sustainability investments:
4.06

Does the institution have a publicly available sustainable investment policy?:
Yes

A copy of the sustainable investment policy:
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The sustainable investment policy:

The fundamental goal of the University’s investment strategy is, and has been, “to maximize the total long-term return on investments” in order to support the University’s core mission of teaching and research. However, the Resources Committee’s guidelines reflect the Trustees’ belief that it is appropriate to consider investment-driven social responsibility issues in certain limited circumstances. While these guidelines were designed with investment issues in mind, the introduction to the guidelines suggests that they “can be applied more generally in order to help us consider other kinds of social responsibility issues more efficiently.”

The guidelines state clearly: “There is a strong presumption against the University taking a political position or playing an active role with respect to external issues of a political, social, or moral character.” The Resources Committee has the responsibility to determine when the strong presumption not to take a position regarding issues of broader social concern must be tempered by other considerations. The 1997 guidelines contain criteria for considering exemptions from the presumption and reflect the view that exceptions from maximizing return should be considered in limited circumstances.

The key criteria include “considerable, thoughtful, and sustained campus interest,” “a direct and serious contradiction” of “a central University value,” and “a consensus on how the University should respond.” Below is a link to the full guidelines and criteria for considering exemptions:
https://cpucresources.princeton.edu/sites/cpucresources/files/guidelines/GUIDELINES-FOR-RESOURCES-COMMITTEE.pdf

Additionally, the following is a link to the Correspondence between the Resources Committee, President Eisgruber, and Andrew Golden, the President of PRINCO, which is publicly available on the CPUC Resources Committee website further articulates our sustainable investment policy: https://cpucresources.princeton.edu/sites/cpucresources/files/reports/Correspondence-between-the-Committee-President-Eisgruber-and-Mr-Golden.pdf


Does the institution use its sustainable investment policy to select and guide investment managers?:
Yes

A brief description of how the sustainable investment policy is applied:

When the Resources Committee, based on the guidelines outlined above, decides that it is necessary to place a social or environmental overlay on investment decisions, it makes a recommendation to the University’s Trustees. Upon approval by the Trustees, PRINCO makes any necessary changes to its small amount of direct holdings and communicates the restriction to its external managers.

The most recent example of such a scenario was the decision in May 2021 to establish an administrative process to dissociate from companies engaged in climate disinformation campaigns or that are involved in the thermal coal and tar sands segments of the fossil fuel industry. The University also has committed to reducing the aggregate harmful climate impact of the entirety of the University’s direct and indirect endowment holdings. Based on expert analysis and input, Princeton will set a target date by which to achieve net-zero greenhouse gas emissions across the University’s endowment portfolio, including intermediate goals to measure progress. These steps, taken by the University’s Board of Trustees, were the result of a thoughtful process around the question of fossil fuel dissociation that included input from stakeholders across the campus community. This process culminated in a set of recommendations to the board from the Resources Committee of the Council of the Princeton University Community (CPUC). The Trustees used those recommendations as the basis for their deliberations, ultimately adopting a more aggressive set of policies grounded in Princeton’s history as a world leader in conservation and climate science research.

Prior to this was the Endowment's dissociation from Sudan. In the fall of 2005, the Resources Committee turned its attention to Sudan and conducted a thorough review of the political and economic climate in Sudan, as well as actions taken by other institutions. The Committee found that action by Princeton regarding current or contemplated investment in selected companies conducting business in Sudan was necessary. Ultimately, the Resources Committee proposed that the University divest from assets directly held in any company actively conducting operations in Sudan that supports acts of genocide or renders assistance to perpetrators of genocide. For any such companies held directly by the Endowment, the Committee recommended that the University first engage these companies in dialogue and divest if those efforts failed. For Princeton’s external managers, the Committee recommended that PRINCO request a report on ownership of these companies, suggest that the managers give careful consideration to Princeton’s concerns, and ask for comments on Princeton’s decision. In June 2006, the University’s Board of Trustees adopted this policy of disassociation.


Has the institution engaged in proxy voting, either by its CIR or other committee or through the use of guidelines, to promote sustainability during the previous three years?:
No

A copy of the proxy voting guidelines or proxy record:
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A brief description of how managers are adhering to proxy voting guidelines:
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Has the institution filed or co-filed one or more shareholder resolutions that address sustainability or submitted one or more letters about social or environmental responsibility to a company in which it holds investments during the previous three years?:
No

Examples of how the institution has engaged with corporations in its portfolio about sustainability issues during the previous three years:
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Does the institution participate in a public divestment effort and/or have a publicly available investment policy with negative screens?:
Yes

A brief description of the divestment effort or negative screens and how they have been implemented:

As described above, in May 2021 the Board of Trustees authorized an administrative process to dissociate from companies engaged in climate disinformation campaigns or that are involved in the thermal coal and tar sands segments of the fossil fuel industry. First, the University will create an administrative process to determine what expert input is needed to establish, implement and sustain actionable criteria for dissociation from fossil fuel companies participating in campaigns that spread disinformation about climate change, and from companies in the thermal coal and tar sands segments of the fossil fuel industry. Second, Princeton will establish a committee of subject matter experts to determine how to define, measure and benchmark the greenhouse gas impact of the University’s endowment. The committee will recommend ways to reduce the aggregate harmful climate impact of Princeton’s direct and indirect holdings, and it will set a target date by which to achieve net-zero greenhouse gas emissions in the University’s portfolio, including intermediate goals to measure progress.

Additionally, the Endowment has maintained a negative screen against assets directly held in any company directly or indirectly involved in genocide in Sudan since 2006. PRINCO has avoided any direct involvement in such companies and has advised its investment managers of Princeton’s standards and concerns. In addition, PRINCO has directed the manager of a fund that targets resource-related public equities to exclude companies with the lowest MSCI ESG rating (CCC).


Approximate percentage of endowment that the divestment effort and/or negative screens apply to:
100

Does the institution engage in policy advocacy by participating in investor networks and/or engage in inter-organizational collaborations to share best practices?:
Yes

A brief description of the investor networks and/or collaborations:

Princeton participates in regular email surveys, in which various schools provide updates on ESG issues under consideration at their respective institutions, and investment staff attends small group sessions with other endowments, such as the College and University Consortium on Investor Responsibility, to discuss varying approaches to ESG issues.


Website URL where information about the institution’s sustainable investment efforts is available:
Additional documentation to support the submission:
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Princeton University discloses the size of its investment pool as of the end of its fiscal year, which occurs on June 30. Due to the timing of this survey, the most recent fiscal year-end data available is as of June 30, 2020.

The information presented here is self-reported. While AASHE staff review portions of all STARS reports and institutions are welcome to seek additional forms of review, the data in STARS reports are not verified by AASHE. If you believe any of this information is erroneous or inconsistent with credit criteria, please review the process for inquiring about the information reported by an institution or simply email your inquiry to stars@aashe.org.