What is the difference between dissociation and divestment?
Divestment is a decision to refuse to invest in a company or set of companies and entails the sale of all securities associated with a company, including both direct and indirect investments, and precludes the repurchasing of those securities.
Dissociation means also refraining, to the greatest extent possible, from any relationships that involve a financial component with a particular company. It includes no longer soliciting or accepting gifts or grants from a company, purchasing the company's products, or forming partnerships with the company that depend upon the exchange of money. The University will permit the acceptance of sponsored research funds from companies that meet the dissociation criteria if and only if those funds will be used for research projects that aim to produce environmental benefits.
Why were the thermal coal and tar sands segments of the fossil-fuel industry identified for dissociation?
Thermal coal, which is burned for steam and used to produce electricity, emits substantially more carbon dioxide in its combustion than alternative available fossil fuels.
Tar sands oil, derived from loose sands or sandstone, produces significantly higher emissions than conventional crude oil, including in its extraction and production process.
What criteria were approved by the Board of Trustees to make dissociation decisions about individual companies?
The Board of Trustees approved the following criteria to determine material participation in the thermal coal segment of the fossil fuel industry:
- Coal producers: Companies with either a ≥10% share of revenue from coal production or producing ≥5 million tons of coal per year.
- Power plants: Companies with either a ≥10% share of revenue from coal-fired power plants or with ≥2.5 GW installed coal power generation capacity.
The Board of Trustees approved the following criteria to determine material participation in the tar sands segment of the fossil fuel industry:
- Oil producers: Companies producing ≥20 million barrels of oil equivalent per year from tar sands.
- Oil refineries: Companies processing ≥20 million barrels of oil equivalent per year of crude oils from tar sands.
The thermal coal and tar sands criteria were informed by the recommendations of the Faculty Panel on Dissociation Metrics, Principles, and Standards. Data from the Urgewald Coal Exit List and Oil and Gas Exit List were used to evaluate whether companies met the above criteria for dissociation. Oil refineries were excluded from the evaluation because data on tar-sands refining are not consistently available across the industry.
How were the criteria for dissociation established?
In May 2021, the Board of Trustees set in motion a process to guide the University’s dissociation from certain segments of the fossil-fuel industry, informed by the recommendations of the CPUC Resources Committee. An administrative committee was established to propose final dissociation criteria to the Board of Trustees and a process for implementing them. That work was informed by scholarly advice from a faculty panel with expertise in fields including environmental studies, ethics, economics, public policy, and engineering. The faculty panel presented its findings in a public written report in May 2022.
Is this dissociation list final?
The University evaluates its fossil fuel associations annually to ensure that the spirit of the dissociation decision is being upheld. This process includes consideration of whether companies from which the University has dissociated have sufficiently changed their practices such that they no longer meet the criteria.
The University writes to the leaders of recently engaged companies identified for dissociation, expressing Princeton’s concerns and inviting the companies to respond. If a company provides information in a timely manner that resolves the concerns, it could be exempt from dissociation and removed from the list.
Does PRINCO’s action to eliminate all exposure to publicly traded fossil fuel companies apply to both direct investments and indirect investments?
Yes.
What future relationship can the University and members of the University community have with the listed companies?
Dissociation prohibits institutional relationships that have a financial component. The University will permit the acceptance of sponsored research funds from companies that meet the dissociation criteria if and only if those funds will be used for research projects that aim to produce environmental benefits.
Individual members of the University community are free to engage with companies as they wish, such as by inviting a speaker to campus or participating in an internship. Additionally, research partnerships that do not involve a financial component are permitted.
What else is Princeton doing related to climate change?
Princeton is committed to achieving net-zero greenhouse gas emissions on its campus by 2046, which is the University’s 300th anniversary.
The University’s Sustainability Action Plan, adopted by the University in April 2019, sets bold targets to reduce greenhouse gas emissions and outlines innovative strategies to engage all faculty, staff, and students in creating a sustainable campus and future. Through this process, Princeton is discovering and modeling best practices and innovations that can be scaled for the campus, the community, and the world.
Over the past half century, Princeton has led environmental research supporting the urgent need for climate action and offering clean energy solutions. Two centers of related research on campus are the Andlinger Center for Energy and the Environment and the High Meadows Environmental Institute.