May 13, 2022

Puget Sound has long demonstrated its commitment to sustainability principles through its curriculum, faculty and student research, green building standards, campus operations, and community collaborations. The university introduced an environmental studies program in 1997 and has since incorporated sustainability throughout the curriculum. In 2012, the university’s wide-ranging actions earned Puget Sound a Gold Rating in the Sustainability, Tracking, Assessment and Rating System (STARS) developed by the Association of the Advancement of Sustainability Higher Education.

The university’s Board of Trustees recognizes that climate change is unique among concerns in our society in that it is global in its reach and existential in its threat. In 2016, the Board made specific commitments that have reduced and will continue to reduce fossil fuel investments significantly in the university’s endowment over time without adverse impact on investment returns that provide annual funding for student financial aid, faculty support, and university operations. To benefit from ongoing best practices in investment management, the Board also committed to review its divestment commitment every three years thereafter.

In May 2019 and again in May 2022, the Board reaffirmed its commitment to reducing fossil fuel investments and expressed its aspiration to have an endowment entirely free of fossil fuel investment. More specifically, the Board’s commitment:

  • Prohibits direct investments in publicly-traded companies that own fossil fuel reserves, as defined by the MSCI Fossil Fuel Reserves list;
  • Prohibits new commitments to commingled private funds where the primary strategy is to make investments focused on hydrocarbon extraction, processing, and/or transportation; and
  • Provides a fossil-fuel-free endowment option for donors (established in 2017) who want their gifts invested in a portfolio free of companies that own fossil fuel reserves.

The Board’s commitment has had strong results. The endowment’s exposure to private hydrocarbon investments has declined from 11.1% in June 2016 to 5.2% in June 2021 and is expected to further decline to under 3% by June 2026 and to under 2% by June 2031. Fossil fuel exposure within comingled funds managed by the university’s external chief investment officer and consisting of publicly traded securities is 1.6% as of June 2021 and is expected at this time to remain around that level.

The Investment Subcommittee will continue to monitor and report annually on hydrocarbon exposure in the endowment, and the Board will review its divestment commitment again in 2025.

The university also continues to monitor its investments that have a beneficial environmental and social impact. They amounted to 20% of the pooled endowment as of June 2021.