By SHANNON O. WELLS

Between fiscal years 2024 and 2025, Pitt’s 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’s private investment exposure to fossil fuels will gradually become “de minimus,” or statistically inconsequential, by about 2035.

All 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.

These are among revelations from the Office of Finance’s fifth-annual report on Environmental, Social and Governance (ESG) Investment Considerations at Pitt. 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. 

Since 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’s commitment to “fully integrating ESG factors into the University’s decision-making processes on the core belief that supporting responsible business practices also supports strong investment outcomes.”

In July 2022, the University launched an ESG page on the chief financial officer’s website 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.

The 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.

A Pitt spokesperson noted that the ESG policy “provides the University with a more consistent and comprehensive approach to evaluating investment opportunities.”

Many concepts referred to as ESG factors have been incorporated in the investing practices of Pitt’s endowment on a case-by-case basis since 1990 and in a more consistent manner since an ESG policy was established.

To be on par with peer university endowments, Pitt’s 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.

Factors 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.  

Only ESG considerations that have financial implications — i.e., enhancing returns or mitigating risk — are taken into account, the report said. Investments are not made to promote political or social causes.

Categories 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.

Beginning in fiscal year 2019, prior to the policy’s 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.

“Since that time, the percentage of investment managers with ESG policies has grown to 94%, consistent with the prior year’s report, and up from 93% in 2024,” the spokesperson said, adding that the number “may fluctuate over time.”

Factors influencing this include:

• Changes in the future market value of fossil fuel investments.

• The future value of the overall CEF.

• The methodology/model used to forecast the investments.

• The assumptions used within the model, as assumptions are updated and refined on an ongoing basis in response to changes in market forecasts.

Even 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’s private investment managers liquidate investments is “generally not within the University’s control.

“Although 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,” the report stated.

The latest report is decidedly of the moment. The “snapshot” nature of the ESG report indicating CEF's investments as they relate to ESG considerations, the spokesperson said, are therefore “not used to set benchmarks for future years.”

Shannon O. Wells is a writer for the University Times. Reach him at shannonw@pitt.edu.

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