Princeton Endowment Backs Out of Oil and Gas Divestment Vow

Summary

Princeton University's endowment is backtracking on its pledge to divest from publicly traded oil and gas companies, citing strong returns from high oil prices and the need to support its operating budget. The endowment, heavily reliant on its $36 billion fund, faces pressure as private equity returns disappoint. The decision reflects a shift in priorities from ESG commitments to financial performance.

• Princeton University endowment reverses its 2020 pledge to divest from publicly traded oil and gas companies.
• The decision is driven by high oil prices (around $95/barrel) and strong returns from energy investments.
• Princeton's endowment makes up 65% of the university's operating budget, creating pressure to generate returns.
• Private equity returns have been disappointing, especially for schools with large PE allocations.
• The divestment pledge only covered public equities, not private energy holdings, limiting its climate impact.
• The backtracking reflects a broader tension between ESG goals and financial performance for endowments.