The organization that oversees Princeton University’s endowment has discontinued its divestment from all publicly traded oil and gas companies, a June 1 letter from the organization’s president states.
The move comes four years after the organization’s 2022 decision to voluntarily divest from fossil fuel companies. A trustee-mandated decision to divest from thermal coal and tar sands companies remains in effect, the letter states.
Vincent Tuohey, president of the Princeton University Investment Company, or PRINCO, said in the letter that the “revised approach” will provide for “greater flexibility” in using the university’s $35.7 billion endowment for financial aid and scientific research “at a time when our sector is under financial strain.”
College students have for decades called for institutions of higher learning to divest from companies, industries and governments that they deem as unethical, corrupt or inhumane. During the campus protests of 2024, for instance, students protesting the Israel-Hamas war called for their institutions to divest from companies with ties to Israel. Students at Tufts University have called on the institution to divest from the prison industrial complex – a call the university declined after determining that the university endowment had no direct investments in private prisons and only “negligible exposure” to private prisons.
Experts say divestment is often more complicated than many people imagine it to be because investments change frequently, and investment strategies may be seen as proprietary secrets, which can make transparency elusive. The Princeton case shows that the desire to sever financial ties to controversial sectors can conflict with institutional interests.
Experts say divestment is often more complicated than many people imagine. The Princeton case shows that the desire to sever financial ties to controversial sectors can conflict with institutional interests.
“From the perspective of endowments, the big objective is to preserve and grow the endowment,” Todd Ely, associate professor at University of Colorado Denver's School of Public Affairs and an expert on endowments, explained to CBS News’ MoneyWatch in 2024. “That is why it becomes so challenging — the primary objective of an endowment manager isn’t to respond to political and social pressure.”
Tuohey said it was “not obvious” that PRINCO’s divestment approach made a difference in moving the endowment “meaningfully closer” to its goal of achieving net-zero greenhouse gas emissions across the university’s endowment portfolio.
“Nor is it obvious that major energy companies will be out of bounds for a net-zero endowment,” Tuohey’s letter states. “After all, this sector will necessarily play a significant role in the clean-energy transition we want for our nation and for the earth.”
He said in his letter that the university would explore the matter more as it works toward its newly established goal of a net-zero endowment by 2046.
