Penn State University has long considered social and environmental factors in managing its roughly $4.6 billion endowment, the university treasurer says.
Now the Penn State board may write that practice into its investment policies, a formal step that would put the university in line with a growing number of peer institutions. Colleges and universities are establishing environmental, social and governance considerations “at the forefront of their investment agendas,” according to the accounting group KPMG.
“Putting it in writing and acknowledging it — it’s about time,” Penn State trustee Mary Lee Schneider said in a meeting Thursday at University Park. A majority of the 14 universities in the Big Ten Conference, which Penn State joined in 1990, have formalized comparable policies, she said.
Penn State is among five that have not, Ms. Schneider said. She credited Christa Hasenkopf, a director at the University of Chicago’s Energy Policy Institute, for helping Penn State trustees think about the issue.
Ms. Hasenkopf won an alumni-controlled board seat last year, campaigning in part for Penn State to divest from fossil fuels as “the right and responsible thing to do.”
On Friday, the board will vote on a policy amendment indicating financial leaders “may take social and environmental considerations into account” when administering Penn State investments. A board committee cleared the language Thursday in a 9-2 vote with little discussion.
In March 2021, the University Park Undergraduate Association, a student government group, called on Penn State to freeze future investments in fossil fuels and set targets to divest from fossil-fuel-related holdings. The university reported it hasn’t made any direct investments in what it termed “exploration and production energy companies” since mid-2019.
Fossil-fuel holdings made up about 5% of Penn State’s portfolio as of 2021 as the university sought to diversify holdings, it reported at the time. In its operations, the university wants a “100% greenhouse gas emissions reduction by 2035” — including through initiatives like electrified vehicles and renewable energy, Penn State reported last week.
Loosely defined, environmental, social and governance investing supports businesses that limit natural impacts, improve social equity and opportunity and follow best practices for management. The University of Pittsburgh adopted an ESG policy statement in March 2020 and has decreased its exposure to fossil fuels, according to the University Times.
Also Thursday, a Penn State board committee gave the go-ahead to proposed room and board rates for the 2023-24 academic year. Increases would vary from about 3.5% at University Park to less than 2% at some Commonwealth Campuses. The full board is expected to vote on the prices Friday.
Adam Smeltz: asmeltz@post-gazette.com, @asmeltz
First Published: February 16, 2023, 11:04 p.m.
Updated: February 17, 2023, 11:08 a.m.