We write to update the University community on Penn’s wide-ranging efforts to respond to climate change. While our recently released Climate & Sustainability Action Plan 3.0 describes the full scope and magnitude of Penn’s efforts, we are pleased to provide an update into ongoing actions and new initiatives from across the University—all designed to make Penn a leader in the university community on climate change issues.
Investment Status Update: In 2016, Penn’s Trustees called for the “thoughtful incorporation of climate change into investment decision making,” requesting that the Office of Investments consider the long-term investment risks associated with climate change when evaluating investments. The Trustees also encouraged the Office to evaluate investment opportunities that address causes or symptoms of climate change. The Office’s consideration of these factors is having an ongoing impact on multiple areas of Penn’s portfolio and investment process.
- When evaluating energy-related investments, Penn incorporates scenarios that assume the world achieves emissions levels consistent with the goals of the Paris Climate Accord. Including such scenarios highlights the advantages of cleaner energy and the elevated risks facing carbon intensive businesses. Factoring the implications of a de-carbonizing economy into investment decisions will materially limit the scope of fossil fuel-related investments in the portfolio. Notably, Penn does not hold, and would not expect to hold going forward, any direct investments in companies focused on the production of thermal coal or bituminous (tar) sands, a reflection of the significant carbon intensity—and the corresponding risks—of such businesses.
- Penn is extending climate-related risk analyses to the evaluation of investments beyond the fossil fuel industry. Climate change already presents dramatic new physical and economic risks for businesses, and a de-carbonizing economy will reshape cost structures, business models, and competitive positioning for many companies.
- Penn’s venture capital portfolio has numerous companies focused on climate change solutions. Penn now has early stage investments in companies ranging from developers of high capacity batteries and carbon capture technology to firms seeking to reduce agriculture’s environmental impact. Through these investments Penn and its venture capital partners hope to catalyze the new technologies and business models that will likely be necessary to solve the world’s climate crisis.
Renewable Power Purchase Update: Penn’s Climate & Sustainability Action Plan 3.0 calls for the University to enter into a Power Purchase Agreement (PPA) to buy green electricity for Penn’s campus. We are currently negotiating a long-term PPA that will support the development of two new solar energy facilities in the Commonwealth of Pennsylvania. By supporting the development of these solar projects, Penn will avoid emitting 166,000 tons of carbon annually. We forecast that by 2023 the PPA can reduce the University’s carbon emission by 45% from our 2010 levels, which would meet the goal of the Paris Climate Accord seven years early.
Air Travel Offsets: University-sponsored air travel by students, faculty, and staff generates approximately 64,000 tons of carbon annually, accounting for 20% of Penn’s carbon emissions and making it the second largest source of carbon emissions at Penn (after energy consumption). We are pleased to report that Penn Purchasing—in consultation with experts from the Weitzman School of Design, the School of Engineering & Applied Science, and Facilities & Real Estate Services—is developing a program through which Penn will purchase carbon offsets to help neutralize emissions from Penn’s air travel. We anticipate launching the program later this year.
Environmental Innovations Initiative: The new Environmental Innovations Initiative—co-led by faculty members Joseph S. Francisco, President’s Distinguished Professor of Earth and Environmental Sciences, and Kathleen D. Morrison, Sally and Alvin V. Shoemaker Professor and Chair of Anthropology—maximizes Penn’s distinctive interdisciplinary strengths to foster collaboration among scholars and students for developing new innovative solutions for global environment management (see Almanac dated December 10, 2019).
Solving the challenges of global warming will require the combined forces of scientific innovation, political will, and behavioral change. While the unwillingness of many governments to combat climate change creates fear and frustration, it can also motivate us all to greater effort and action. We value and appreciate the Penn community’s continued support for our collective sustainability ambitions, and we look forward to updating you in the future on our progress.