By SUSAN JONES
The Office of Finance released its third report on Environmental, Social and Governance (ESG) Investment Considerations at Pitt earlier this month.
Pitt’s ESG criteria were developed in 2022 after a report from the Socially Responsible Investment Committee of faculty, students and staff established by then-Chancellor Patrick Gallagher. This review was largely prompted by ongoing complaints about the University’s holdings in fossil fuel-related businesses.
The Board of Trustees subsequently developed a socially responsible investment policy and formed the ad hoc committee on fossil fuels. That committee recommended in 2021 that Pitt stay the course to reduce private holdings in fossil fuel-related businesses in the consolidated endowment fund to zero by the end of 2035.
The consolidated endowment fund was $5.5 billion at the end of the 2022-23 fiscal year.
The ESG reports serve to update the consolidated endowment fund’s exposure to fossil fuels. The 2024 report found that holdings in fossil fuels increased from 8.1 percent as of June 30, 2022, to 8.2 percent on June 30, 2023.
This increase, the report said, was the result of fluctuations in public fund holdings, which are outside the University’s direct control, and more clarity about what is in those holdings. The University has not made any direct investment in fossil fuel companies or new commitments to fossil fuel funds in more than three years.
In addition, external investment managers that currently oversee about 93 percent of the consolidated endowment fund have formal ESG policies in place or take ESG considerations into account when making investments. This is up from 87 percent the previous year.
Holdings in fossil fuels decreased from 10 percent of the endowment in 2015 to 5.9 percent as of June 30, 2021.
The Office of Finance does not typically make direct investments in individual operating companies, instead preferring to invest in funds managed by third-party investment managers who are responsible for selecting the underlying holdings, the report said, and the timeframe over which the consolidated endowment fund’s private investment managers liquidate the investments is generally not within the University’s control.
Jeffrey Choudhry told Pittwire that, “Pitt was one of the first universities to publish an ESG report for its endowment. With this third report, it remains our goal to enhance awareness and understanding regarding the endowment’s investment practices.”
The full report, along with links to the 2022 and 2023 reports and other related documents, can be found on the Office of Finance website.
Susan Jones is editor of the University Times. Reach her at suejones@pitt.edu or 724-244-4042.
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