Combatting climate change is one of the paramount challenges of our time. We write today to update the University community on a significant new initiative that Penn is undertaking as part of our deep and wide-ranging efforts to respond to climate change. We are pleased to announce that the Office of Investments has established the goal of reducing the net greenhouse gas emissions from Penn’s endowment investments to zero by 2050.
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. It also adds to Penn’s earlier affirmation of the absence of direct holdings of thermal coal and tar sands, and our commitment to continue that position going forward. The Office of Investments’ new goal supports the aim of the 2015 Paris Agreement and the UN’s Intergovernmental Panel on Climate Change of reducing the world’s net anthropogenic emissions to zero by 2050 in order to limit the global warming increase to 1.5°C from pre-industrial levels.
The Office of Investments aims to achieve the endowment’s net-zero goal primarily through the elimination of the greenhouse gas emissions associated with the endowment’s underlying investments. 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. We expect that progress toward the endowment’s net-zero goal will occur both through emissions reductions at the many hundreds of companies in which the endowment is invested, as well as through the redeployment of capital towards investments with low or improving carbon footprints. Any residual emissions across the endowment’s holdings would need to be offset, ideally through investments in enterprises that remove carbon from the atmosphere.
This is a complex undertaking, and achievement of our goal will require significant efforts across many fronts. Consistent methodologies for calculating emissions across vastly different investments are still being developed. To this end, the Office of Investments anticipates collaborating with Penn faculty experts, with organizations developing frameworks and accounting standards, and with other institutional investors who have similar goals. As importantly, we will lend our voice and support to Penn’s managers as they encourage 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. We look forward to updating the community over time as we develop interim goals and as we progress in our overall efforts.
The steps we are taking with our investment portfolio are important and meaningful ones, all the more so because these represent only one major addition to Penn’s comprehensive, measurable, and successful efforts to combat climate change. Penn’s Climate and Sustainability Action Plan 3.0 embodies our vision for a sustainable university, including our goal of achieving carbon-neutrality across the school’s operations. Penn has already reduced its overall carbon emissions by 37.2% since 2009, even as the scale of the university has greatly expanded. We have dramatically greened our physical footprint, as 27 buildings have now achieved LEED certification, 34 buildings have green roofs, and 14 acres of open space have been added through the creation of Penn Park. We took another major step forward in 2020 with a Power Purchase Agreement that enabled the construction of two solar energy facilities in Central Pennsylvania. Scheduled to open in December 2022, the facilities will offset 75% of both the University’s and Health System’s electricity consumption through the production of green power.
Working for a healthier and more livable world is one of our most critical institutional priorities. 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.
For more information on the Net-Zero initiative, see Penn’s goal of achieving net-zero emissions within the endowment.