Penn will reduce its net greenhouse gas emissions from endowment investments to zero by 2050, a move that comes after years of student-led criticism for the University's investment in fossil fuel companies.
Penn President Amy Gutmann, Provost Wendell Pritchett, Executive Vice President Craig Carnaroli, and Chief Investment Officer Peter Ammon sent an email to the Penn community on Wednesday morning announcing that the Office of Investments plans to achieve the "net-zero" goal mainly through the elimination of greenhouse gas emissions associated with the University's endowment's underlying investments.
While the University announced it plans to achieve this goal, it will not be divesting from fossil fuels.
Divestment decisions are considered by the Board of Trustees under their established standards and procedures, Ammon told Penn Today, adding that the net-zero goal will still have a more significant impact on the portfolio’s emissions footprint than divestment would.
"A net-zero goal incorporates the emissions produced by all businesses within the portfolio, forcing consideration of how all sectors can accelerate a transition to a cleaner future," Ammon told Penn Today. "A net-zero goal also acknowledges that it may be more efficient for society to offset residual emissions with carbon capture, if such technology can be scaled cost-effectively."
For years, student activists have been demanding that Penn completely divest from fossil fuel companies. In fall 2019, the student-run group Fossil Free Penn hosted weekly silent sit-ins every Friday in College Hall to push Penn to address the climate crisis. Nearly 100 members of Fossil Free Penn also shut down a Board of Trustees meeting in a November 2019 protest.
Penn graduate Scott Bok, who will become chair of the University’s Board of Trustees on July 1, 2021, previously maintained that he would not answer students’ calls to divest from fossil fuels in an interview with The Daily Pennsylvanian.
The University expects that progress towards its net-zero goal will occur by redirecting its capital towards investments with low or improving carbon footprints. Penn invests by partnering with external investment managers, each of whom invests in a portfolio of public companies, private companies, or real estate, Ammon told Penn Today.
"This important step builds upon Penn’s longstanding commitment to achieve carbon neutrality across the University’s operations and upon the previous decision by the Office of Investments to factor the assumption of a decarbonizing economy into investment decision-making," the email read. "This aim critically recognizes that for our world to achieve net-zero by 2050, the world-wide consumption of fossil fuels must decrease as the supply of clean energy increases and its cost decreases."
According to the email, this latest goal supports efforts outlined in the 2015 Paris Agreement and the United Nations' Intergovernmental Panel on Climate Change to reduce the world’s net anthropogenic emissions to zero by 2050 in order to limit the global warming increase to 1.5 degrees Celsius from pre-industrial levels.
In order to achieve this mission, University administrators wrote that the Office of Investments plans to collaborate with Penn faculty experts, organizations developing frameworks and accounting standards, and other institutional investors with similar goals. The administrators wrote they will also support Penn's managers in encouraging their portfolio companies to develop sustainable decarbonization plans.
"Achieving our goal will also inevitably depend on the commitment of governments to meet emissions reductions goals, on the development of technologies that will support a decarbonized economy, and on significant changes in consumer behavior," the email read. "We look forward to updating the community over time as we develop interim goals and as we progress in our overall efforts."
This announcement builds upon Penn's annual Climate and Sustainability Action Plan 3.0 report, released on Dec. 1, 2020, which summarized the University’s latest progress in environmental sustainability made from 2019 to 2024 with a commitment to achieve a 100% carbon-neutral campus by 2042. The report showed significant reduction in carbon emissions and waste generation — largely due to March 2020's campus shutdown during the COVID-19 pandemic.
Penn has reduced its overall carbon emissions by 37.2% since 2009 and "greened" its physical footprint, according to the email, with 27 buildings achieving Leadership in Energy and Environmental Design certification, 34 buildings having green roofs, and 14 acres of open space having been added through the creation of Penn Park. In 2020, Penn signed a Power Purchase Agreement for the construction of two new solar energy facilities in central Pennsylvania, which will offset 75% of both the academic campus and the University of Pennsylvania Health System's electricity consumption through renewable energy. The University has also affirmed the absence of direct holdings of thermal coal and tar sands, the email read, which will continue going forward.
"Working for a healthier and more livable world is one of our most critical institutional priorities," the email read. "The battle to defeat climate change requires the commitment of nations around the world and all of us personally, and one to which Penn is unwaveringly committed."