University of Pittsburgh Office of Finance       ESG Report 
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Office of Finance 
Inaugural Consolidated Endowment Fund
Environmental, Social and Governance 
Report, 2020-21
March 2022

University of Pittsburgh Office of Finance       ESG Report 
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Contents
Executive Summary  
Introduction  
The Function and Purpose 
of Pitt’s Endowment  
Establishment of Pitt’s ESG Policy
ESG Progress to Date: 
Integration across the CEF Portfolio
Future Trends for Evaluating ESG Risks
CEF Sustainable Investing Road Map 
and Future Commitments
University of Pittsburgh Office of Finance       ESG Report 
Some photos in this publication were taken prior to the COVID-19 pandemic 
and do not necessarily reflect current health and safety guidelines.
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University of Pittsburgh Office of Finance       ESG Report 
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Executive Summary
The University of 
Pittsburgh’s largest financial 
asset is its Consolidated 
Endowment Fund (CEF), 
valued at $5.6 billion as 
of June 30, 2021. The CEF supports 
financial aid, scholarships, faculty 
positions, and research activities—
and links past, current, and 
future generations of University 
stakeholders, including students, 
faculty, and staff.
The primary investment objective of the
 CEF is to earn a rate of return over an extended 
period while preserving its asset value. It is 
the University’s core belief that supporting 
responsible business practices is integral to 
producing strong investment outcomes.
This is not a new concept at Pitt. In fact, 
the Office of Finance, which manages the CEF, 
has been incorporating many of the concepts 
now referred to as environmental, social, and 
governance (ESG) factors in its due diligence 
process on a case-by-case basis since 1990. 
In an effort to reaffirm that commitment and 
develop a more consistent and comprehensive 
approach, the ESG policy for the CEF was 
established in March 2020.
Furthermore, the Ad Hoc Committee on 
Fossil Fuels, convened by the University’s Board 
of Trustees, strongly supported the current 
long-term strategy of the University’s CEF, 
which is expected to continue to pursue strong 
risk-adjusted financial returns while reducing 
private holdings in fossil fuel exploration and 
production to zero by the end of 2035. The Ad 
Hoc Committee also directed the University 
to provide greater transparency regarding the 
fossil fuel trends of the CEF in an ESG report.
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University of Pittsburgh Office of Finance       ESG Report 
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This inaugural report seeks to provide 
greater clarity regarding how ESG factors are 
applied in the investment decision-making 
process as well as report on fossil fuel trends 
as requested by the Ad Hoc Committee.  
In addition to providing an introduction 
to the University’s endowment, the report 
discusses several topics:
Pitt’s ESG Policy Development: 
The ESG policy considers a range of factors 
when evaluating investment risk. Those factors 
could include energy efficiency, hazardous 
materials management, climate change, 
water and land management, data protection 
and privacy, human rights, labor standards, 
product safety, accounting and audit 
standards, bribery and corruption, business 
ethics, and regulatory compliance. To develop 
this policy, the Office of Finance benchmarked 
the policies published by public and private 
peer universities, including those with similar 
endowment sizes.
Progress on ESG Policy Implementation:
Pitt’s progress to date shows how ESG 
factors are being applied consistently across 
all asset classes, including the expansion of the 
standard, formal due diligence questionnaire, 
which is now answered by every potential 
investment manager. The Office of Finance also 
employs a sustainability materiality map that 
identifies key risk factors along the dimensions 
of environment, social capital, human capital, 
business model and integration, and leadership 
and governance. Additionally, the report 
features four case studies that illustrate 
the impact of applying ESG factors when 
considering specific investment opportunities. 
It is important to note that there is not currently 
an agreed-upon set of ESG standards or metrics 
in the investment industry. As a result, this 
report discusses more of a qualitative approach 
in applying ESG factors currently employed by 
the Office of Finance, and as shown in the case 
studies. As common standards are developed 
and quantitative metrics are agreed upon, we 
will look to broaden our reporting.
Future Trends:
The report looks to project some trends with 
regard to ESG factors. However, there are some 
challenges in providing comprehensive metrics 
on ESG factors. For example, information on 
ESG factors is consistently available only on 
public equity and corporate fixed-income 
investments that constitute approximately 
one-fifth of the CEF as of June 30, 2021. 
Furthermore, the investment industry and 
regulators are still in the process of developing 
a common set of standards and metrics with 
regard to ESG.
This inaugural report does include data 
and measurement of environmental factors, 
specifically fossil fuels. Portfolio exposure 
to fossil fuels decreased to 5.9% by June 30, 
2021, compared to 10% on June 30, 2015. 
The University remains on track to meet the 
expectation of the Ad Hoc Committee on Fossil 
Fuels that private holdings in fossil fuels will 
decline to zero by the end of 2035.
While this report provides more information 
regarding the specifics of CEF investing than has 
ever been provided in the past, we recognize 
that there are some significant gaps, especially 
related to metrics. A major challenge is that the 
investment industry currently lacks established 
quantitative measurement standards to 
evaluate ESG factors. 
Portfolio exposure to fossil fuels
10% June 30, 2015
5.9% June 30, 2021

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This report serves as a starting point as 
standard measurements continue to evolve. 
Our commitment to applying ESG factors to 
the CEF is steadfast, and the University has a 
more consistent and comprehensive approach 
to applying ESG factors than in the past. As 
consistent standards for ESG reporting are 
developed, the University will be able to report 
on them.
It is important to note that this report 
focuses only on the ESG policy as it relates to 
investing the CEF. The University of Pittsburgh 
has been actively involved much more broadly 
in sustainability initiatives for over 30 years, 
especially as it relates to its operations. 
This includes recently establishing a Pitt 
Sustainability Plan that incorporates equitable, 
environmental, and economic considerations 
and goals across the institution and its 
campuses. The University’s integration of ESG 
factors into its decision-making process for 
the CEF aligns with the University’s broader 
sustainability goals.
We hope that this inaugural ESG report 
supports a more robust dialogue within the 
Pitt community about the incorporation of ESG 
factors into the investment decision-making 
process.
University of Pittsburgh Office of Finance       ESG Report 
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The Carrillo Street Steam Plant is a significant part of the University’s 
commitment to reducing its carbon footprint. The facility is one of the 
cleanest university heating plants in the United States. The full use of 
this facility by Pitt/UPMC is expected to reduce annual carbon dioxide 
emissions by approximately 48,000 metric tons, nearly half of the 
baseline steam-related CO2 emissions.

University of Pittsburgh Office of Finance       ESG Report 
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Introduction
Founded in 1787, the University of Pittsburgh has a mission 
to provide high-quality undergraduate and graduate 
programs in the arts and sciences and professional fields 
while supporting broader public interests contributing to 
the social, intellectual, and economic development of the 
Commonwealth of Pennsylvania, the nation, and the world. This 
mission is future oriented, perpetual in nature, and intrinsically 
supportive of positive societal and environmental developments 
beyond the University’s campuses.
University of Pittsburgh Office of Finance       ESG Report 
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University of Pittsburgh Office of Finance       ESG Report 
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Pitt’s Consolidated Endowment Fund (CEF) 
is the University’s largest financial asset, 
valued at $5.6 billion as of June 30, 2021. The 
purpose of the CEF is to provide permanent 
and stable financial support for the benefit of 
current and future generations of University 
stakeholders in perpetuity by funding financial 
aid, scholarships, faculty positions, research 
activities, and more.
The CEF is governed by the Investment 
Committee of the Board of Trustees and has 
been prudently managed by University staff 
in the Office of Finance within the Office of 
the Senior Vice Chancellor and Chief Financial 
Officer. Over the course of the University’s 235-
year history, community concerns about CEF 
investment exposures have reached significant 
levels, prompting reflection and action by the 
board and Office of Finance staff. In recent 
years, investment considerations related to 
fossil fuels have grown in focus among the 
University’s stakeholders, including the broader 
University community (undergraduate and 
graduate students, faculty, staff, and alumni), 
the neighborhood of Oakland, the city of 
Pittsburgh, and the greater Pittsburgh region.
The increased significance of these topics 
among community stakeholders has coincided 
and overlapped with a growing investment 
sector awareness of the potential benefits of 
considering ESG factors in investment decision 
making. As explained in Pitt’s ESG Policy, ESG 
factors include considerations that improve 
the quality of investment decision making 
by presenting a deeper and more robust 
assessment of expected risks and returns. 
Environmental factors may relate to how a 
company manages waste or greenhouse gas 
emissions; social factors may relate to data 
protection and privacy concerns, human 
rights, labor standards and product safety; 
and governance factors may relate to how a 
company’s senior management is compensated, 
succession planning, the compensation of its 
board of directors, and/or how shareholder 
rights are addressed. The University’s Office 
of Finance has incorporated ESG factors into 
its investment due diligence process for many 
years; however, more recently, the Office 
of Finance staff has done so with a more 
structured process and an increased focus, 
diligence, and purpose, as has the institutional 
investment sector.
This inaugural University of Pittsburgh 
CEF ESG report is the next step in providing 
more transparency about CEF investments 
and ESG-related practices in a manner that 
increases University community and public 
understanding about the purpose and 
management of the CEF. As Pitt’s first such 
report, this document provides a snapshot of 
the development and implementation of Pitt’s 
ESG Policy. We hope that it will prove helpful 
for further University-wide dialogue about 
issues of importance. We expect our future ESG 
reporting to evolve and to include additional 
data and more robust analysis. This ESG report 
includes frequent and intentional use of the 
word “we” to refer to the Office of Finance.
We consulted with the sustainable 
investment team at Mercer Investments LLC 
(Mercer) on this report. Mercer is the largest 
investment consultant in the world, with more 
than $16 trillion in assets under advisement as 
of June 30, 2021.1
We hope that readers will find this report 
to be enlightening and educational, and we 
look forward to reporting on the ongoing 
incorporation of ESG factors into our 
investment decision-making process in the 
years ahead.
1 Mercer’s sustainable investment team was established in 2004 and 
served as consultant to the United Nations in constructing the Principles 
for Responsible Investment (PRI); as a result of this work, Mercer was a 
founding PRI signatory. Mercer recognizes that ESG issues can be material 
to investment performance and provides services that support the 
implementation of these principles.

University of Pittsburgh Office of Finance       ESG Report 
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The Function and Purpose of Pitt’s Endowment
Prior to discussing how ESG 
factors are integrated into the 
investment decision-making 
process, it is important to 
understand the broader 
context of the CEF, including why it 
exists, who governs and manages it, and 
how it is structured.
What is an endowment?
An endowment is a gift of funds or property 
whose purpose is to provide the recipient with a 
source of revenue. Pitt’s endowment is designed 
to keep the original gift principal intact while using 
some or all of the resulting investment returns as 
revenue that financially supports the University’s 
operating budget, primarily in the form of financial 
aid for students. The two primary goals of general 
endowment management are:
1. to preserve the long-term “real” purchasing 
power of assets by generating net investment 
returns that match or exceed the endowment’s 
annual spending and the eroding effects of 
inflation and
2. to provide a reliable stream of meaningful 
revenue2 for the University. 
There is an essential need for universities to 
invest an endowment’s principal effectively in 
order to generate sufficient income to provide 
financial aid, support endowed chairs and 
professorships, and fund operations, among other 
uses.
What are Pitt’s endowment characteristics?
The University of Pittsburgh Consolidated 
Endowment Fund is an investment pool composed 
of more than 2,900 individual endowment funds, 
all with designated purposes and restrictions, 
that are commingled3 to facilitate more efficient 
investment. Each endowment fund that the 
University accepts has a clearly stated, legally 
binding purpose for the assets provided to which 
the University must adhere. Additionally, the 
legal documents accompanying CEF investments 
typically include confidentiality provisions 
that prevent the University from disclosing 
specific investments or investment managers. 
Confidentiality provisions are deemed necessary 
to avoid impairing long-term investment returns.
Among CEF objectives, the most critical to the 
University’s mission is the long-term preservation 
of assets on a real (inflation-adjusted) basis, 
as they provide a steady, meaningful stream 
of income to University beneficiaries. Figure 1 
indicates the defined purposes4 for Pitt’s CEF 
funds. These endowed gifts provide perpetual 
financial support for scholarships, fellowships, 
faculty chairs, instruction, and other University 
programs and services.5
2The terms “revenue” and “income” are used interchangeably throughout 
this report to refer to CEF investment returns.
3Pooled together, as opposed to maintained in separate investment 
accounts.
4“Other Purposes” include research, library and public service, general 
and undesignated funds, long-term reserve fund, and development and 
institutional support.
5The University provides postretirement medical and life insurance 
benefits to eligible employees and their spouses upon retirement 
through a contributory benefit plan. The University has elected to fund its 
postretirement liability via a designated endowment fund that is managed 
within CEF and referred to as postretirement reserves.
Figure 1: CEF by Purpose, as of 6/30/21
Financial Aid—36.0%
Chairs, Professorships
& Instruction—31.0%
Postretirement
Reserves—11.8%
Scholaraships. Fellowships
& Awards­—11.0%
Other purposes—10.2%
36.0%
10.2%
31.0%
11.8%
11.0%
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Establishment of Pitt’s ESG Policy
This inaugural University of 
Pittsburgh CEF ESG report 
reviews the efforts that 
the Office of Finance has 
undertaken to formally 
incorporate and document consideration 
of ESG factors into its decision-making 
process for the fiscal year ending June 
30, 2021.
ESG Policy
Management of the CEF is guided by the 
University’s Statement of Governance, Investment 
Objectives, and Policies, which was made effective 
September 17, 2012, and last amended and 
restated June 24, 2019, and September 12, 2019.6 
The CEF’s Statement of Governance addresses 
“Social Responsibility” in Section XIV:
To fulfill the University’s stated mission and 
meet the expectations of the donors who have 
entrusted gifts to the University, the University 
must manage its CEF wisely. As stated 
previously, the primary investment objective 
established for the CEF is to maximize the 
financial return on such assets, taking into 
account risk and other considerations as more 
specifically set forth in this Statement, in order 
to provide a reliable stream of meaningful 
income while preserving the CEF’s real asset 
value. Accordingly, the Committee shall not 
apply non-financial constraints pertaining to 
investment holdings of the CEF unless there 
is a situation of such magnitude that the 
Board specifically directs the Committee to 
consider such non-financial parameters.
In evaluating any specific social 
responsibility concern as directed by 
the Board, the Committee may consider 
the gravity of the social impact, the 
University’s need to maintain a sound 
financial investment policy, the potential 
effectiveness of the Committee’s 
investment or voting decisions to 
influence positive change, and such 
other considerations as the Committee 
may deem appropriate. In no event 
will a recommendation be made that 
an investment be selected or retained 
solely for the purpose of encouraging 
or expressing approval of a company’s 
activities or, alternatively, for the purpose 
of placing or leaving the University in a 
position to contest a company’s activities.
6Available at 
https://www.trustees.pitt.edu/sites/
default/files/osec-docs/2019.0912.
statement_of_governance_amended_
and_restated_-_final.pdf
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In March 2020, the Office of Finance 
established the ESG Policy for the CEF.7 As 
shared with the Board of Trustees Investment 
Committee, the ESG Policy was designed to 
document considerations that have been 
essential to the University’s investment strategy 
of evaluating risk-adjusted return potential 
for investment opportunities. The ESG Policy 
states the University’s commitment to “fully 
integrating ESG factors into the University’s 
decision-making processes, on the core belief 
that supporting responsible business practices 
also supports strong investment outcomes.”
Though ESG factors vary based on the 
type, industry, and scope of an investment, 
the ESG Policy outlines how the Office of 
Finance considers a range of factors when 
evaluating investment risk. Those factors could 
include energy efficiency, hazardous materials 
management, climate change, water and land 
management, data protection and privacy, 
human rights, labor standards, product safety, 
accounting and audit standards, bribery and 
corruption, business ethics, and regulatory 
compliance.
ESG Policy Peer Comparison
To ensure Pitt’s ESG Policy was at the leading 
edge of practice among university endowment 
peers, the Office of Finance engaged an 
outside sustainable investment consultancy 
to advise in the policy’s development. As part 
of the ESG Policy development process, the 
Office of Finance reviewed ESG and/or socially 
responsible investment (SRI) policies published 
by a diverse group of 19 public and private 
peer universities, including those with similar 
endowment sizes.
This process identified a number of key 
elements that robust ESG policies contain, 
including a statement of core principles, roles 
and responsibilities, and reporting frameworks. 
The Office of Finance incorporated many of 
these elements in the ESG Policy presented 
to the Investment Committee of the Board of 
Trustees at its March 25, 2020, Information 
Meeting. The ESG Policy was adopted by the 
Office of Finance for implementation after 
the March 25, 2020, Information Meeting of 
the Investment Committee and posted to the 
University website in April 2020.
Ad Hoc Committee on Fossil Fuels
Following University community concerns 
relating to fossil fuel investments that reached 
a significant threshold, then board chair 
Thomas E. Richards stated at the board’s annual 
meeting on June 26, 2020, that he would be 
appointing an ad hoc committee of the board 
to consider the matter of the University’s 
investments in fossil fuels, as was contemplated 
in the board’s February 2020 resolution 
adopting a socially responsible investment 
screening process.8,9
The Ad Hoc Committee on Fossil Fuels 
of the Board of Trustees first met in August 
2020. At its February 26, 2021, meeting, the 
University’s Board of Trustees accepted the 
committee’s report, agreed with its findings, 
agreed to undertake all its proposed options, 
and dissolved the committee. 
7Available at https://www.cfo.pitt.edu/sites/default/files/esgpolicyfinal3-25-20.pdf
8Jones, Susan. (2020). New Trustees’ Chair Forming Ad Hoc Committee on Fossil Fuel Investments. University Times, June 26, 2020. 
https://utimes.pitt.edu/news/new-trustees-chair.
9University of Pittsburgh. (2020). Resolution Adopting a Socially Responsible Investing Screening Process. University of Pittsburgh Board of Trustees. 
https://www.trustees.pitt.edu/sites/default/files/osec-docs/socially_responsible_investing_screening_process.pdf.

University of Pittsburgh Office of Finance       ESG Report 
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The committee’s findings and options 
presented in the accepted final report10 
are as follows:
1) Forgo applying a negative screen to the 
CEF with respect to fossil fuels.
2) Strongly support the implementation 
of the University’s current ESG Policy and 
direct the University’s chief investment 
officer and the Office of Finance to apply 
ESG considerations to every CEF investment 
decision.
3) Strongly support the current long-term 
strategy of CEF, which is expected to 
continue to pursue strong risk-adjusted 
financial returns while reducing private 
holdings in fossil fuel exploration and 
production to zero by the end of 2035, as 
monitored by the Investment Committee.
4) Direct the University’s Investment 
Committee to oversee the development of 
a long-term strategy focused on seeking 
attractive investments that help to reduce, 
avoid, and eliminate greenhouse gas 
emissions.
5) Direct the University to provide greater 
transparency regarding the fossil fuel 
investment trends of CEF, which would 
support the University in its mission and 
goals while increasing University community 
understanding about the purpose and 
management of CEF. Specifically:
a) Support the commitment made by 
the Office of the Senior Vice Chancellor 
and Chief Financial Officer to publish a 
public ESG report for fiscal year 2021 
to highlight the application of ESG 
considerations in ensuring that CEF 
provides strong financial returns in 
perpetuity and to fossil fuel investments 
specifically.
b) Support regular, clear, and accessible 
University communication, education, 
and engagement about CEF’s aggregate 
status, trends, and current and 
future fossil fuel exposure (including 
the basis for any material changes 
in expectations), including periodic 
updates to the board and the University 
community.
This inaugural ESG report is intended to 
align with the Ad Hoc Committee’s findings 
and options, particularly points 5, 5a, and 5b. 
The Office of Finance intends to continue to 
be responsive to the University community 
as expressed in the Ad Hoc Committee’s 
report, with this ESG report kicking off future 
engagement with the University community.
Stakeholders
Pursuant to the bylaws of the University, 
the CEF is governed by the Investment 
Committee of the Board of Trustees, which 
provides oversight and guidance to the chief 
investment officer regarding the management 
of the University’s endowment. As such, the 
Investment Committee and the board are key 
stakeholders in overseeing the University’s 
commitment to the integration of ESG factors 
into the University’s investment decision-
making process. 
Additional stakeholders involved in and 
considered by the University included the entire 
University community (undergraduate and 
graduate students, faculty, staff, and alumni), 
the neighborhood of Oakland, the city of 
Pittsburgh, and the Pittsburgh region. In 2020 
and 2021, many University and local community 
members shared their views on fossil fuels, 
climate change, and other ESG-related topics as 
public comments to the Ad Hoc Committee on 
Fossil Fuels.11 The Office of Finance has taken 
these perspectives into account in developing 
its approach and drafting this ESG report.
As noted previously, this document serves as 
the foundation for more robust and reciprocal 
conversations about the CEF’s ESG approach 
with stakeholders. The Office of Finance 
welcomes and looks forward to the University 
community’s continued engagement.
10Final report available at https://www.trustees.pitt.edu/fossil-fuels
11Public comments to the committee start on page 33 of the committee’s 
final report.

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University Operations and 
Academic Sustainability Objectives
It is important to note that this report focuses only 
on the ESG policy as it relates to investing the CEF. The 
University of Pittsburgh has been actively involved 
much more broadly in sustainability initiatives and 
practices since 1990, when then Chancellor Wesley 
W. Posvar was one of the original signatories of 
the Talloires Declaration, which supported the 
mobilization of the resources of higher education 
institutions to advance sustainability. More recently, 
the 2018 Pitt Sustainability Plan set a campuswide 
sustainability strategy that incorporates equitable, 
environmental, and economic considerations and 
goals across the institution and its campuses.
The University has been actively tracking its 
greenhouse gas (GHG) emissions since 2008, with six 
GHG inventories completed and GHG inventorying 
now an annual process. With incremental 
targets to reduce GHG emissions, energy use, 
water consumption, and transportation-related 
GHG emissions by 50% by 2030, the University 
strengthened and extended its commitments in 
February 2020 by committing to achieving carbon 
neutrality on the Pittsburgh campus by 2037.12
Reflecting higher education inventory practices, 
the carbon footprint of the CEF is not included in 
the University GHG inventory process. However, 
the University’s integration of ESG factors into its 
decision-making process for the CEF broadly aligns 
with the University’s broader sustainability goals.
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12University of Pittsburgh. (2020). Resolution Committing to Carbon Neutrality 
for the Pittsburgh Campus by 2037. University of Pittsburgh Board of 
Trustees, https://trustees.pitt.edu/sites/default/files/minutes_and_
materials/2-28-2019_winter_meeting.pdf.

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ESG Progress to Date: Integration across the CEF Portfolio
This inaugural University 
of Pittsburgh ESG report 
provides new transparency 
into how the ESG Policy is 
being implemented. As this 
was the first year in implementing 
this policy, it was critical to formalize 
and document the process by which 
ESG factors are incorporated into 
investment decision making. Particular 
focus was placed on identifying both 
the positive impacts of investments 
(opportunities for attractive 
investment returns) and their negative 
impacts (full and robust consideration 
of investment risks). 
It is important to note that there is not 
currently an agreed upon set of ESG standards 
or metrics in the investment industry. As 
a result, this report discusses the more 
qualitative approach in applying ESG factors 
currently employed by the Office of Finance, 
and as shown in the case studies. A recent 
article in the Harvard Business Review titled 
“We Need Universal ESG Accounting 
Standards” cited a lack of uniform criteria 
for the measurement and reporting on ESG 
progress similar to those used for financial 
performance. As common standards are 
developed and quantitative metrics are agreed 
upon, we will look to broaden our reporting.
 
ESG Incorporation by the 
Office of Finance
Following the adoption of the ESG Policy 
in March 2020, the Office of Finance formally 
integrated ESG factors into its operational and 
investment due diligence processes across all 
asset classes. Starting in fiscal year 2019, the 
Office of Finance began asking its external 
investment managers if they had an ESG policy. 
At that time, some external managers indicated 
that they had adopted ESG policies; however, 
many others indicated that they did not yet 
have a formal ESG policy in place. The Office 
of Finance held discussions with managers, 
encouraging them to evaluate relevant ESG-
related issues and to develop policies to 
address them.
In fiscal year 2021, the Office of Finance 
expanded its standard formal due diligence 
questionnaire (DDQ)—which is answered 
by every potential investment manager to 
aid the Office of Finance in evaluating their 
capabilities and whether to invest with them 
or not—to include ESG questions suggested by 
the Institutional Limited Partners Association 
(ILPA), a leading organization of private market 
investors.13 Reflecting the evolution of the 
investment sector, Pitt’s now standard use of 
ESG questions emphasizes the University’s 
commitment to these factors and has 
generated meaningful discussions both within 
the Office of Finance and with existing and 
prospective investment managers. These 
questions are included in the due diligence 
process to help in evaluating an investment’s 
expected risk-adjusted financial return 
potential.
13Institutional Limited Partners Association (2021). “Due Diligence 
Questionnaire and Diversity Metrics Template.” Available at 
https://ilpa.org/due-diligence-questionnaire.
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In addition to including the ILPA questions 
in its DDQ, the Office of Finance developed 
a novel approach for evaluating investment 
managers with regard to ESG factors. The ESG 
Policy adopted in March 2020 stated that “The 
Office of Finance will consider material ESG-
related risks for each investment and inquire 
of its external investment managers how they 
identify and, if possible, mitigate such risks.”
In order to fulfill that commitment, the Office 
of Finance currently uses the Sustainability 
Accounting Standards Board (SASB) Materiality 
Map,14 which identifies key material risk factors 
across 77 industries along five dimensions:
• Environment
• Social capital
• Human capital
• Business model and integration
• Leadership and governance
SASB is a leading global organization 
that collaborates and communicates with 
investors to identify the key ESG risks and 
opportunities that are most relevant to the 
financial performance of companies.15 The 
Office of Finance considers SASB Materiality 
Map material risk factors in connection 
with its investment due diligence process. 
Consideration of these risk factors is not used 
as a negative screen but rather to identify areas 
requiring further due diligence, in alignment 
with leading global practices. This approach 
is expected to evolve as ESG data providers 
and other businesses supporting institutional 
investors’ ESG initiatives evolve.
Private Investments Subject to ESG 
Factors in Fiscal Year 2021 (FY 21)
Pitt formally integrated ESG factors into 
its investment due diligence process in FY 21. 
To date, only a portion of the CEF as of June 
30, 2021, has been subject to the ESG Policy 
adopted in March 2020. These commitments 
were in several asset classes, including private 
equity, venture capital, real assets, and private 
credit.
Case Studies
It is important to note that in this initial 
phase of ESG implementation, the thought 
processes and due diligence that support each 
CEF transaction are critical. Our expectation is 
that the incorporation of the ESG Policy through 
qualitative and quantitative assessments, 
over the long term, will positively impact 
investment returns. Currently, many of the 
elements considered are qualitative, but we 
expect to consider more quantitative elements 
in the future. Examples demonstrating how 
ESG factors are being incorporated into 
the due diligence process are presented on 
the following pages. We hope that these 
case studies provide readers with a more 
comprehensive view into how the Office of 
Finance takes ESG factors into account in 
evaluating investment opportunities.
14 In June 2021, SASB and the International Integrated Reporting Council 
announced the completion of their merger, resulting in the formation of 
the Value Reporting Foundation. The Materiality Map can be accessed at 
https://www.sasb.org/standards/materiality-map/. 
15Sustainability Accounting Standards Board (2021). “About Us.” Available at 
https://www.sasb.org/about/.

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Case Study:
Identifying and Addressing Risks to 
Employee Health and Well-being
During the due diligence process for a 
direct investment in a North American 
manufacturer of infrastructure 
products, the Office of Finance identified 
several deficiencies with regard to 
facility safety conditions, employee 
compensation, and working conditions. 
These social issues are consistent 
with risk factors identified in the SASB 
Materiality Map and also represent 
risks to the health and well-being of the 
company’s employees and, therefore, 
the success of the investment. After 
identifying these concerns, the Office 
of Finance discussed them with the 
investment manager, who committed to 
making improvements in these areas, 
thus improving the return profile for the 
CEF while effecting meaningful change 
for the company’s employees.
University of Pittsburgh Office of Finance       ESG Report 
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University of Pittsburgh Office of Finance       ESG Report 
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Case Study:
Supporting Healthier Communities
Pitt was presented with the opportunity 
to participate in a restructuring for a 
Latin American private equity fund that 
was near the end of the traditional fund 
life cycle of approximately 10-12 years. 
During the discussion of the portfolio’s 
various assets, a municipal waste facility 
beginning to incinerate waste was 
identified. After investment team analysis 
and discussion, it was determined that 
the asset presented air pollution risks 
that could endanger the local population’s 
health and thus adversely impacted the 
investment’s long-term risk-adjusted 
return potential. As a result, the 
University did not make the considered 
investment.
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University of Pittsburgh Office of Finance       ESG Report 
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Case Study: 
Actively Mitigating Stranded Asset Risks
During the due diligence process related 
to renewing a commitment and a possible 
new co-investment in a metallurgical coal 
mine (i.e., to support the production of 
steel), concerns remained about the ability 
to exit the investment in the future as 
major mining firms seek to reduce their 
greenhouse gas profiles. After a careful 
review, the investment team denied 
investment in both opportunities due to 
these risks and concerns related to coal’s 
becoming a stranded asset (e.g., not able 
to achieve financial returns for its full 
lifetime) as global economies transition to 
a lower-carbon economy.
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University of Pittsburgh Office of Finance       ESG Report 
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Case Study:
Advocating for Strong Governance Standards
Pitt requests to be and is a member of many 
limited partner advisory committees (LPACs). 
In connection with Pitt’s LPAC involvement for 
two funds with the same manager, the Office of 
Finance recognized that a proposed investment 
opportunity represented a conflict of interest 
with regard to the manager’s fiduciary duty. 
Additionally, the proposed transaction had other 
business ethics concerns, including providing 
rescue financing (which helps borrowers to 
stave off a financial crisis) to one of the fund’s 
portfolio companies in a manner that would 
have adversely impacted all investors. Pitt was 
active in LPAC discussions and played a lead role 
in developing a fair solution that both preserved 
the University’s investment and successfully 
mitigated the possible conflict of interest and 
business ethics concerns.
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Future Trends for Evaluating ESG Risks
In addition to the ESG Policy and 
the related process we put in 
place, we also began measuring 
and tracking data associated 
with the portfolio and thinking 
through future data trends that can 
assist in evaluating the risk-adjusted 
financial returns of CEF investments.
One major challenge is the availability of 
data across the entire range of ESG factors 
and an understanding of their financial 
impact. As an example, data were available 
to measure ESG factors and their financial 
impact for certain public equity and corporate 
fixed-income investments that make up only 
approximately 19% of CEF as of June 30, 2021. 
The other CEF assets primarily consist of 
alternative assets, including private equity, 
venture capital, marketable alternatives (hedge 
funds), private credit, real assets, and cash. ESG 
data providers either do not cover or do not 
provide sufficient information to assess these 
asset classes relating to ESG factors.16
As a result, much of the ESG Policy 
implementation is qualitative in nature, as 
we described in the case studies above. As 
more data become available across more of 
the CEF asset classes, we expect to be able 
to analyze the data to develop meaningful 
measurements that will be reported in future 
editions of this report. For this first report, we 
have focused our data and measurement on 
the environmental factors, specifically fossil 
fuels. As we get a better understanding of the 
governance and social factors surrounding ESG, 
we expect to increase our reporting in these 
areas in future reports.
Future Outlook: 
Environmental Factors
As the University contemplates how 
environmental metrics factor in its investment 
due diligence processes, it also is considering 
how portfolio allocations may shift in the 
future as broader economic and societal 
trends influence financial markets and 
economic events. Several key considerations 
help to inform the University’s perspective 
on future environmental trends. The 26th 
Conference of the Parties to the United Nations 
Framework Convention on Climate Change 
(otherwise known as COP26), concluded in 
Glasgow, Scotland, in November 2021, and 
the University is focused on how the global 
government agreements will impact investment 
opportunities.
Following the conclusion of COP26, scientists 
and policymakers have identified that keeping 
global warming to no more than 1.5 degrees 
C above preindustrial times would help to 
ensure that the physical impacts of climate 
change (while still significant around the world) 
would not overwhelm society’s ability to adapt. 
Subsequently, while the COP26 outcome is 
positive, they believe it is not yet enough.
As a result, regardless of the speed, it is 
apparent that the global economy is moving 
toward a lower-carbon future, with government 
regulations, technological advances, and 
behavior changes by individuals and 
organizations expected to increasingly impact 
investment opportunities and risks. As a result 
of these broader trends and their likely impact 
on the financial returns of certain investments, 
the University’s investment portfolio also is 
expected to become less carbon intensive, 
supporting a more sustainable future.
16A key challenge for investors is gaining access to ESG-related metrics 
from private market, or alternative, investments, which include private 
equity, private debt, real estate, infrastructure, and natural resources, 
among other potential asset classes. As they are not subject to, for 
example, being publicly listed on stock exchanges, the privately held 
assets within these investment vehicles, whether businesses, buildings, or 
bridges, are not typically required to disclose much information publicly, 
and therefore it can be difficult for investors to gather ESG information 
from private market fund managers. While private market investment 
managers are increasingly focused on enhancing their capabilities to 
gather and report ESG-related information to investors, ESG reporting 
remains relatively atypical in these particular asset classes at present.
I

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Below are the current expected future trends for our fossil fuel exposure.
As disclosed in the February 2021 report of the Board of Trustees Ad Hoc Committee on Fossil 
Fuels, the value of the University’s private equity investments is expected to increase in the short 
term until 2023; as Figure 2 illustrates, as these investments reach their planned liquidation dates, 
they are expected to drop to zero by the end of 2035. The Office of Finance has not made any new 
fossil fuel investments since February 2021, when the Ad Hoc Committee on Fossil Fuels report was 
issued. The CEF’s exposure to public fossil fuel extraction and production holdings was 1.4% as of June 
30, 2021. We expect fossil fuel exposure in our public market holdings to remain low for the reasons 
already cited in this section of this report.
Figure 2: University of Pittsburgh CEF Private Equity (Illiquid) Fossil Fuel Exposure Forecast17
	
Illustration shows 4.5% in 2021 with a projected 0.0% by the year 2035
 
We will continue to measure our 
exposure to fossil fuels in our private equity 
(illiquid) investments and to evaluate other 
environmental factors that may be relevant 
to evaluating a potential investment’s risk-
adjusted return profile. As access to data 
improves, other meaningful environmental 
measurements may become available.
Social Factors
The University is committed to advancing 
diversity and human rights as part of its 
academic mission while also recognizing that 
such considerations can be material to financial 
outcomes and corporate performance. Levels 
of corporate transparency are increasing in 
these veins through both enhanced corporate 
reporting on ESG factors and through greater 
attention to such topics by investment analysts 
and third-party data providers. As a result, 
the University has had more opportunities 
to engage investment managers regarding 
important social factors included in the SASB 
Materiality Map.
4.5%
4.7%
4.7%
4.1%
3.7%
2.8%
2.0%
1.3%
0.7%
0.4%
0.3%
0.2%
0.2%
0.1%
0.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Percent CEF Private Equity Exposure to 
Fossil Fuel Extraction & Production
Fiscal Year End
Actual
Forecast
17Actual illiquid fossil fuel exposures for 2019-21 are as of June 30 for each 
year. Forecast exposures are at the end of each future calendar year.

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Specifically, Pitt is monitoring the formation 
of the International Sustainability Standards 
Board, announced at COP26.18 The board builds 
on the work of SASB and related ESG disclosure-
focused organizations but has been created 
with the intention that a common framework 
of sustainability metrics (inclusive of social 
considerations) will be agreed upon for adoption 
by financial regulators and other global oversight 
bodies. This development will help to align the 
disclosure expectations of corporate issuers so 
that investors (including Pitt) can have access to 
enhanced and standardized ESG data to better 
inform decision making. Such disclosures will aid 
the University’s evaluation of social factors that 
may impact the projected returns of prospective 
investments.
Governance Factors
Recent years have shown a growth in investor 
focus on investment stewardship with respect to 
ESG topics, including voting proxies in equities and 
engaging with companies or debt issuers through 
either individual engagements or collaborative 
initiatives. Investors also are increasingly elevating 
stewardship tactics with companies that are 
not responsive enough to these engagement 
efforts and directly raising questions of whether 
corporate directors have the requisite experience 
and expertise to govern companies facing 
significant ESG-related challenges, including 
energy transition and other topics. We will 
continue to monitor the available data regarding 
governance factors and add those factors into our 
investment due diligence process.
18 IFRS Foundation. (2021). “IFRS Foundation announces International Sustainability 
Standards Board, consolidation with CDSB and VRF, and publication of prototype 
disclosure requirements.” Available at: 
https://www.ifrs.org/news-and-events/news/2021/11/ifrs-foundation-announces-
issb-consolidation-with-cdsb-vrf-publication-of-prototypes/
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University of Pittsburgh Office of Finance       ESG Report 
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CEF Sustainable Investing Road Map and Future Commitments
This inaugural ESG report 
aligns with the educational 
mission of the University 
of Pittsburgh and supports 
a more robust dialogue 
within the Pitt community around 
the incorporation of ESG factors into 
the CEF investment due diligence 
process. As part of that dialogue, 
the Office of Finance makes the 
following additional commitments 
to continue to enhance and improve 
the integration of ESG factors into the 
University’s investment processes:
1) Launch an ESG Section of the CFO 
Website: In keeping with our efforts to 
enhance transparency of CEF and align with 
the University’s sustainability reporting efforts, 
we commit to launching a new public ESG-
focused section of our website in fiscal year 
2022. This new page will be a portal for new 
CEF documents and updates related to Office of 
Finance ESG policies, practices, and outcomes 
under the purview of the University’s senior 
vice chancellor and chief financial officer.
2) Expand and Deepen ESG Reporting: We 
commit to making future editions of this report 
more robust and granular than this inaugural 
report, assuming additional data continue to 
become available. Specifically, we intend to 
report on progress achieved in incorporating 
ESG factors into our investment decision-
making process between the release of this 
report and the next edition as well as to update 
the community on any new standards and 
benchmarks that have emerged.
3) Explore Sustainable Investments: We 
commit to specifically seeking exposure to 
sustainable investments that could enhance 
risk-adjusted financial returns while advancing 
sustainable impacts. Per option 4 of the Ad Hoc 
Committee on Fossil Fuels report (adopted by 
the Board of Trustees in February 2021), this 
exploration will include financially attractive 
investments that also help to reduce, avoid, and 
eliminate greenhouse gas emissions
4) Join Collaborative ESG Initiatives: There 
is a proliferation of investor initiatives focused 
on a range of critical ESG risk and opportunity 
topics, and we believe that the University’s 
interests will best be served by initially 
joining initiatives focused on sustainable 
higher education investing. To that end, the 
Office of Finance commits to evaluating such 
collaborative networks and to joining one 
of the networks that aligns with University 
goals. Membership in such a network would 
be in addition to the University’s existing 
participation in the Big Plus Roundtable 
(formerly Big Ten Network) and COO Peer 
Network. ESG is an active topic of discussion in 
these forums.
The University of Pittsburgh is an 
affirmative action, equal opportunity 
institution. Published in cooperation with 
the Office of University Communications 
and Marketing. 113205-0322
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