Divestment Advice

Following several calls for Princeton to withdraw from various types of investments in the past year, President Eisgruber ’83 issued a strong defense of the University’s “presumption against taking political stands” and clarified the impact of a divestment decision.

Princeton “aims to influence society principally by the scholarship we generate and the people we educate, not through economic clout or institutional position-taking,” Eisgruber said in an April 15 letter.

A decision to divest — which would take place only “when the University community as a whole determines that the activities or practices of a company or companies are seriously inconsistent with a core University value” — would affect more than the endowment, he said.

“If we believe that we should not be associated with a company or an activity as a matter of our investment policy, then so too we ought to disassociate from it in all other aspects of our operations,” he said. “We ought not to purchase products or accept gifts from it, nor should we form partnerships with it or facilitate its recruitment activities.”

Eisgruber’s letter was a response to a request for his views by the Resources Committee of the Council of the Princeton University Community (CPUC), which reviews concerns related to socially responsible investments. 

In the past year, the Resources Committee received a proposal to divest endowment holdings from fossil-fuel companies, a request to establish sustainable-investment strategies to guide the endowment, and two petitions relating to investments in companies that contribute to or profit from Israel’s occupation of the West Bank.

Noting the committee had specifically cited energy and environmental issues, Eisgruber wrote that “it would be a profound mistake to create an investment policy that took political stands regarding the business activities of energy companies. These companies do not meet the disassociation standard.” 

Questions about energy, the environment, and sustainability — while pressing — “are questions that arise not out of the conduct of a few bad actors but rather out of the conduct of all of us,” he said. 

Research by Princeton scientists “is making a powerful case about the urgent need for action to protect the environment,” he said, but the University’s reputation as an unbiased forum for teaching and study must be protected.

“If the University itself behaves in a manner that is politically partial,” he said, “we weaken our capacity to contribute to this debate in the way that is most needed, and as we are uniquely capable of doing — by providing authoritative and impartial scholarly expertise.”

Eisgruber said Princeton’s presumption against political stands “applies with full force to the management of its endowment,” which he said must be invested to maximize its ability to support Princeton’s mission over the long term. He noted that donors with “fundamentally differing political views” contribute to the endowment, and the University is “obliged to keep faith with them.”

READ MORE: President Eisgruber’s letter to the Resources Committee, and a memo by Princeton University Investment Co. president Andrew Golden on social responsibility in University investments