Pitt will work to phase out fossil fuel holdings by 2035

University of Pittsburgh trustees Friday agreed to continue phasing out fossil fuel investments in the school’s $4.3 billion endowment by 2035, embracing a trustee committee’s findings over calls by students and other activists to divest immediately.

The vote was unanimous. It came after a reading of the committee’s findings as the board met and without prior meeting debate about an issue that has been discussed and studied at Pitt for nearly a decade.

“... The board of trustees having reviewed the committee’s report agrees with committee’s findings and wishes to undertake the proposed options,” said the resolution that trustees adopted to accept the six-member committee’s work.

The 124-page report included numerous findings, statements and options for the board to consider, from greater transparency, to endorsing ongoing efforts to make Pitt, a university of 34,000 students on five campuses, carbon neutral by 2037.

But most attention has focused on divestment, amid a growing movement on college campuses and elsewhere to rid portfolios of coal, oil, and gas investments, given the harmful effects of greenhouse gases on the environment.

Both those pushing to eliminate them now and those taking a slower approach appeared to agree on this: The holdings have grown riskier as investments are less likely to offer big returns and thus are a lessthan-optimal vehicle to grow the endowment that is used to support spending on university endeavors.

But the ad hoc committee chose to present the board with an option to continue phasing down those holdings to zero by the end of 2035, instead of a more rapid pace.

“The University already reduced fossil fuel exposure in its endowment by 42% the last five years — from 10% in 2015 to 5.8% currently,” stated one of the report’s findings.

In addition, the committee noted that among remaining holdings, “most of the private equity investments are in funds with long-term commitments that cannot currently be sold in secondary markets without expecting significant financial loss.”

Trustee Dawne Hickton, who chaired the committee, said the panel considered the effect of selling off sooner. She did not offer a figure, but said, “The university would take a significant financial loss.”

In an interview after the meeting, Ms. Hickton said robust committee exploration of a potential early sale of those holdings revealed it could have cost Pitt anywhere from $65 million to more than $100 million.

Trustees chairman Thomas Richards ascribed the university’s shift in position in large part to activism by students. “I think they should feel proud,” he said.

“It is hard to overstate the deep importance and urgency that our community feels about climate change and the impact that it is having on all of this,” Pitt Chancellor Patrick Gallagher said. “Whether your views prevailed or not ... you have made a difference.”

Even so, activists including Fossil Free Pitt, a coalition of student groups, had demanded more — that Pitt divest immediately. They waged an increasingly visible campaign to pressure the school to act. The coalition earlier this week dismissed the ad hoc report and its options for the board as “an empty and self-congratulatory document” and “an insult to its own values and the university community.”

After Friday’s vote, the coalition issued a statement that said in part, “Our fight for divestment is not going away.”

A far different view came from industry. The Robinson-based trade group, the Marcellus Shale Coalition, called the committee’s options including a phased reduction of holdings as “prudent” and suggested the divestment movement at Pitt was politically motivated and less likely to lead to sound investing decisions.

Also during Friday’s meeting, Mr. Gallagher updated the board on the pandemic, its costs to the university that so far total $165 million this year and last, as well as efforts to mitigate impacts. A decision about what fall will look like is still being made, but Mr. Gallagher said applications are strong at this stage, and the school’s overall financial health is good.