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National & World Ag News Headlines |
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Cornell Announces Moratorium on Fossil Fuel Investments
USAgNet - 05/26/2020
The Cornell University Board of Trustees voted Friday to support a decision by its Investment Committee to institute a moratorium on new private investments focused on fossil fuels and to grow its investments in alternative energy technologies.
The moratorium emerged from the committee's review of Cornell's $6.9 billion endowment portfolio; the near- and medium-term financial outlook for the coal, oil and gas industries; and the potential threat posed by climate change, according to a resolution
approved by trustees.
"There's a growing recognition that we're transitioning away from fossil fuels globally, and the economic competitiveness of renewable energy sources is rising," said Ken Miranda, the university's chief investment officer. "We're doing the right thing from an
investment perspective, particularly for an endowment with a perpetual time horizon."
Effective immediately, the moratorium applies to new private equity and bond vehicles focused on fossil fuels, a category that makes up about 4.2% of Cornell's long-term investments, Miranda said. That percentage is expected to dwindle to zero over time as
existing investments mature and assets are redeployed to other areas, including renewables, he said.
The new policy does not apply to indexed and other public equity mandates, such as the S&P 500, where typically the university may be one of hundreds or thousands of investors and does not have the ability to alter an index's composition or direct managers
to include or exclude particular securities. As a matter of policy, the Investment Office does not invest directly in any individual equity securities, including those of fossil fuel companies.
The moratorium formalizes practices the portfolio had already been following for some time, Miranda said, and builds upon several strategies Cornell has implemented as part of the gradual transition toward more environmentally friendly energy sources.
More than 70% of the university's assets under investment are run by managers committed to considering environmental, social or governance issues in their investment decisions, through frameworks including the U.N. Principles for Responsible Investment. The
resolution trustees endorsed on May 22 calls for growing that percentage.
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