California State University (CSU) Chancellor Joseph I. Castro announced today that the university will not pursue any future investments in fossil fuels in the university's three investment portfolios: Systemwide Investment Fund Trust (SWIFT), Intermediate Duration Portfolio (IDP) and Total Return Portfolio (TRP).
“Consistent with our values, it is an appropriate time to start to transition away from these types of investments, both to further demonstrate our commitment to a sustainable CSU but also to ensure strong future returns on the funds invested by the university," said Castro.
The CSU has a long-standing commitment to sustainability, which includes the CSU trustees' adoption of a university-wide sustainability policy in 2014, its pledge to honor the Paris Agreement after the Trump administration's withdrawal in 2017, and codifying sustainability considerations in its master investment policy later that same year.
In May 2021, Chancellor Castro tasked the CSU's Investment Advisory Committee (IAC) to review the university's investments to ensure alignment between the university's fiduciary responsibility and its commitment to sustainability. At the conclusion of their meeting on October 6, the IAC shared its recommendations with the Chancellor, who agreed to adopt them and has tasked staff at the Chancellor's Office with implementation. The IAC's recommendations include:
- Liquidating fossil fuel-related bonds held in SWIFT as soon as reasonable and restrict future fossil fuel investments for that same portfolio and the IDP.
- Transition out of the TRP's direct energy mutual fund and into other non-fossil fuel mutual funds.
- Work as appropriate and feasible to further reduce fossil fuel exposures in the TRP, which due to legislative restrictions is limited to mutual funds.
- Allow CSU investment managers discretion to continue to invest in businesses that are successfully transitioning to sustainable green business models.
CSU investments are centrally managed on behalf of the system and its campuses. As of June 30, 2021, the CSU has approximately $5.2 billion invested in its portfolios. Neither state general fund nor CSU auxiliary funds are included in CSU investments.
Auxiliaries, which support the university and campuses but are separate legal entities, cannot be obligated to adopt the recommendations of the IAC but are free to adopt an investment strategy that best supports their own specific missions.
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The California State University is the largest system of four-year higher education in the country, with 23 campuses, 56,000 faculty and staff and 486,000 students. Half of the CSU's students transfer from California community colleges. Created in 1960, the mission of the CSU is to provide high-quality, affordable education to meet the ever-changing needs of California. With its commitment to quality, opportunity and student success, the CSU is renowned for superb teaching, innovative research and for producing job-ready graduates. Each year, the CSU awards more than 132,000 degrees. One in every 20 Americans holding a college degree is a graduate of the CSU and our alumni are 4 million strong. Connect with and learn more about the CSU in the CSU NewsCenter.