FINANCE: USC’s divestment from fossil fuels prescribed key updates

A table showing USC's fossil fuel divestment

In the first update since it made public its commitment to fossil fuel divestment two years ago, USC divulged that it sold one-third of its divestment portfolio by withdrawing $102 million from investments that were worth $313 million in June 2021.

The value of the remaining investments in the portfolio has appreciated to $385 million. 

The investment office also gave updates on the timeline within which it is supposed to fully withdraw from these investments. In an interview with the Daily Trojan, Amy Diamond, USC’s chief investment officer, said the University is attempting to fulfill its commitment to divestment in a “prudently financial manner.”

“We are very committed to liquidating this portfolio, but the important aspect of it is making sure we do so by generating the most amount of proceeds we can, so that we’re not hurting the endowment, since we are responsible for growing the value of the endowment,” Diamond said.

Pre-existing call contracts triggered an additional $27 million of investment on the original $313 million pot before a bulk of the investments was withdrawn. Despite the withdrawal, the value of USC’s fossil fuel holdings then increased around 23% as of March 2023. Diamond said macroeconomic trends and price hikes related to the pandemic and Russia’s war in Ukraine were the reason for this.

The University will continue what it describes as a 10-year process of withdrawing from partnerships and funds that are mainly invested in fossil fuels, including oil and gas. William Higbie, a Student Sustainability Committee member, was among several students who largely lauded a meeting between SSC members and the investment office for the transparency with which progress was discussed.

In the meeting, the University committed to collaborating with students to provide a quarterly fact sheet about fossil fuel divestment, as well as publicly outline its “Investment Stewardship Policy” by choosing ESG investment standards for the endowment. Higbie, a junior majoring in cinema and media studies, said the meeting was an “extremely positive” sign.

“I walked in not knowing what to expect,” Higbie said. “The last thing frankly anyone had really heard was that they were going to commit to removing and transferring that $277 million in fossil fuel [investments, back in February 2021].” 

USC’s divestment efforts are part of a larger trend across higher institutions in the nation: More than 100 universities across the United States have committed to similar strategies, including Columbia University and Dartmouth University. 

Read the full story