Princeton Endowment Backs Out of Oil and Gas Divestment Pledge

People walk on the Princeton University campus in Princeton, New Jersey. Photographer: Craig Warga/Bloomberg

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Princeton University’s endowment is backtracking on its pledge to divest from publicly traded oil and gas companies, four years after it said it would exit such holdings as way to move toward a net-zero portfolio.

A trustee-mandated decision to divest from thermal coal and tar sands companies remains in effect, Vincent Tuohey, President of the Princeton University Investment Company, known as Princo, said in a statement Monday.

“It’s not obvious that Princo’s initial approach has moved the endowment meaningfully closer to net-zero, nor is it obvious that major energy companies will be out of bounds for a net-zero endowment,” Tuohey said, adding that the sector will play a “significant role” in the clean-energy transition.

Princeton is one of the richest universities in the US with a fund of $36.4 billion as of June 2025. It’s also one most dependent on that endowment, which generates about 65% of the college’s operating revenue.

In recent years, the Princeton endowment’s returns have trailed those of its rivals. Its three-year annualized return as of June 2025 was the lowest among Ivy League schools at 4.3%, according to data compiled by Bloomberg. Its 20-year annualized return was tied for second with Brown University.

Princeton’s president in February warned of economic challenges, saying it can no longer rely on strong endowment returns at a time when political threats to its finances are increasing.

In 2022, Princo voluntarily elected to divest from all publicly traded fossil fuel companies. In reversing that decision, Tuohey said that Princo will have “greater flexibility in managing an endowment whose resources are critical for financial aid and scientific research – including climate research – at a time when our sector is under financial strain.”

He noted that “self-imposed constraints” on the investment strategy can have outsized impacts on the school. Tuohey took over the fund in 2024 after the retirement of Andrew Golden.

The school newspaper, the Daily Princetonian, first reported the investment decision.