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Loyola University Chicago to quit fossil fuel investments – Crain’s Chicago Business

Loyola University Chicago will withdraw financial support from the fossil fuel industry, announcing today that it plans to divest from companies that contribute to climate change.

The policy, approved last month by the Jesuit university’s Board of Trustees, will end direct investments and wind down commitments in entities that derive most of their revenue from fossil fuels. Instead, Loyola said it will prioritize investing in funds or companies working to reduce carbon emissions or greenhouse gases. The move follows years of activism by faculty and students at the Rogers Park campus urging the university to use its fiscal influence to combat global warming.

“As an institution, we have a unique role to play in training and educating the leaders of tomorrow to identify and scale the innovations needed to advance a clean and equitable future for all,” President Jo Ann Rooney and Chief Financial Officer Wayne Magdziarz said in a school email sharing the policy today. “As we transition our campuses and infrastructure, we must also use our resources to ensure the proper financial incentives exist to transition those who use fossil fuels to greener sources of energy.”

Loyola, which holds an endowment of about $928.5 million, is neither the first, nor the wealthiest, university to redirect its investment strategy over global warming, but its decision illustrates how climate change is increasingly shaping social responsibility actions in large organizations. More than 1,300 institutions—including universities, nonprofits, government groups and corporations—have announced divestment policies, according to advocacy website Fossil Free.

The Chicago-based John D. and Catherine T. MacArthur Foundation joined that list last month, when it announced it would sell off privately held oil and gas assets as part of a broader plan to divest from fossil fuels that began in 2019. Most of MacArthur’s assets, which totaled $8.2 billion in 2020, are invested in pooled funds and derivatives. The organization has said fossil fuel reserves make up roughly 4% of its public equities, and that oil and gas funds represent approximately 3% of its privately held portfolio.

Harvard University, the country’s wealthiest college, announced last month that it would stop investing in fossil fuels, a major win for activists trying to spread the divestment movement across higher education.

Campus campaigns have popped up at Northwestern University and the University of Chicago, but neither university has made the same public commitment. In 2020, a committee on Northwestern’s Board of Trustees rejected a proposal that encouraged divesting from any of the top 100 coal and oil and gas companies. Northwestern’s endowment stood at $11.1 billion in 2020 and U of C’s reached $8.6 billion.

At Loyola, Chief Investment Officer Katharine Wyatt estimated that about 2.5% of the endowment is invested in the fossil fuel sector. She said she expects investments in coal, oil and gas to shrink almost completely by 2025, but said there are some contractual agreements in place that need time to expire. Most of Loyola’s investments are actively managed, but it also contributes to some illiquid commingled funds, which will be evaluated on a case-by-case basis.

Wyatt said Loyola has been working on its new policy for about a year. The decision was influenced both by popular sentiment on campus—what she called a “growing chorus” of support from students, faculty and staff—as well as a desire to align investment choices with Jesuit principles of social justice and sustainability.

“We’re joining a very growing trend of leadership in ESG (environmental, social and governance considerations) and responsible investing,” she said today. “I would reinforce the notion that for us, even though it’s very popular right now, Loyola is not just jumping on the bandwagon. It goes far beyond that. This is something that is bringing our investment policies to be fully integrated with our roots, our mission priorities as an institution that is based on Jesuit Catholic preferences.”

A copy of the new policy provided by Loyola says the university can continue investing in funds that have fossil fuel exposure but are transitioning to more sustainable business models. The university will also be selective in hiring portfolio managers who share the same conscientious investment philosophy.

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