\n\tBy SHANNON O. WELLS<\/p>\n
\n\tBetween fiscal years 2024 and 2025, Pitt\u2019s private investment exposure to fossil fuels decreased from 5.9% of its Consolidated Endowment Fund (CEF) to 4.8%. Based on current trend lines, projections indicate the CEF\u2019s private investment exposure to fossil fuels will gradually become \u201cde minimus,\u201d or statistically inconsequential, by about 2035.<\/p>\n
\n\tAll public and private exposure to fossil fuels decreased from 7.8% of the CEF on June 30, 2024, to 6.7% as of June 30, 2025. Held indirectly via index funds and funds managed by external investment managers, public investment exposure to fossil fuels remained flat at 1.9% in the same period. The investment exposure is expected to continue fluctuating through time.<\/p>\n
\n\tThese are among revelations from the Office of Finance\u2019s fifth-annual report on Environmental, Social and Governance (ESG) Investment Considerations at Pitt<\/a>. Released in May, the report provides a snapshot of the endowment’s investments related to ESG considerations for the fiscal year ending June 30, 2025, specifically highlighting public and private investments in fossil fuels.\u00a0<\/p>\n \n\tSince March 2020, the Investment Office has followed an ESG policy for the endowment, providing the University with a more consistent and comprehensive approach to evaluating investment opportunities. The ESG policy states the University\u2019s commitment to \u201cfully integrating ESG factors into the University\u2019s decision-making processes on the core belief that supporting responsible business practices also supports strong investment outcomes.\u201d<\/p>\n \n\tIn July 2022, the University launched an ESG page on the chief financial officer\u2019s website<\/a> to serve as a portal for new CEF documents and investment-related ESG disclosures. This and related information remains available via the Pitt Finance & Operations website<\/a>.<\/p>\n \n\tThe Investment Office is responsible for the oversight and management of the CEF, which supports financial aid, scholarships, faculty positions and research activities. The CEF had a market value of $6.1 billion on June 30, 2025.<\/p>\n \n\tA Pitt spokesperson noted that the ESG policy \u201cprovides the University with a more consistent and comprehensive approach to evaluating investment opportunities.\u201d<\/p>\n \n\tMany concepts referred to as ESG factors have been incorporated in the investing practices of Pitt\u2019s endowment on a case-by-case basis since 1990 and in a more consistent manner since an ESG policy was established.<\/p>\n \n\tTo be on par with peer university endowments, Pitt\u2019s finance office engaged a sustainable investment-oriented consulting firm to advise in developing ESG policy. The office reviewed ESG and\/or socially responsible investment (SRI) policies published by 19 public and private peer universities, including those with similar endowment sizes.<\/p>\n \n\tFactors Pitt considers when evaluating investment risk include energy efficiency, hazardous materials management, climate change, water and land management, data protection and privacy, human rights, labor standards, product safety, accounting and audit standards, bribery and corruption, business ethics and regulatory compliance, the website says. \u00a0<\/p>\n \n\tOnly ESG considerations that have financial implications \u2014 i.e., enhancing returns or mitigating risk \u2014 are taken into account, the report said. Investments are not made to promote political or social causes.<\/p>\n \n\tCategories of current target asset allocation of the CEF include fixed income and cash, real assets, domestic and international equity, emerging markets equity, and marketable and non-marketable alternatives.<\/p>\n \n\tBeginning in fiscal year 2019, prior to the policy\u2019s adoption, the Investment Office began asking its external investment managers if they had established ESG policies. As many indicated they did not yet have formal policies in place, the Investment Office held discussions with managers and encouraged them to evaluate relevant ESG-related issues and develop policies to address them.<\/p>\n \n\t\u201cSince that time, the percentage of investment managers with ESG policies has grown to 94%, consistent with the prior year\u2019s report, and up from 93% in 2024,\u201d the spokesperson said, adding that the number \u201cmay fluctuate over time.\u201d<\/p>\n \n\tFactors influencing this include:<\/p>\n \n\t\t\tChanges in the future market value of fossil fuel investments.<\/p>\n \n\t\t\tThe future value of the overall CEF.<\/p>\n \n\t\t\tThe methodology\/model used to forecast the investments.<\/p>\n \n\t\t\tThe assumptions used within the model, as assumptions are updated and refined on an ongoing basis in response to changes in market forecasts.<\/p>\n \n\tEven relatively minor updates to these factors can result in significant variability in projections, the latest ESG report stated. It stressed further that the timeframe over which the CEF\u2019s private investment managers liquidate investments is \u201cgenerally not within the University\u2019s control.<\/p>\n \n\t\u201cAlthough the associated funds typically have stated termination dates, it is not unusual for such funds to have their termination dates extended for several additional years,\u201d the report stated.<\/p>\n \n\tThe latest report is decidedly of the moment. The \u201csnapshot\u201d nature of the ESG report indicating CEF’s investments as they relate to ESG considerations, the spokesperson said, are therefore \u201cnot used to set benchmarks for future years.\u201d<\/p>\n \n\tShannon O. Wells is a writer for the University Times. Reach him at shannonw@pitt.edu<\/a>.<\/p>\n \n\t\u00a0<\/p>\n \n\tHave a story idea or news to share? Share<\/a> it with the University Times.<\/p>\n