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Investment staff report further declines in fossil-fuel exposure across UMS portfolios
Summary
UMS finance staff reported progress toward fossil-fuel divestment goals: combined exposure across the Managed Investment Pool, Operating Fund and Pension declined from roughly 1.4% in earlier measurements to 0.7% as of Dec. 31, 2024, and the Managed Investment Pool reduced its equity exposure from 2% in 2022 to 0.6% in 2024.
Investment staff reported to the Board of Trustees that the University of Maine System has reduced its exposure to fossil-fuel companies across its three primary portfolios and described next steps to reach a system goal of zero fossil-fuel exposure.
Tracy Elliott, Vice President of Finance and Controller, reviewed a dashboard prepared by the system's investment advisor (NEPC) showing percentage and dollar exposures across the Managed Investment Pool (MIP), Operating Fund and Defined Benefit Pension Plan. Elliott said the system's adoption of ESG screens (starting in 2016) and formal divestment goals approved by the Investment Committee and the board in 2022 reduced fossil-fuel exposure from earlier highs. Staff reported a combined exposure decline from 1.4% to 0.7% (measured as of Dec. 31, 2024), which investment staff estimated equated to roughly $4.3 million on the system's more than $630 million in managed assets.
Elliott said the MIP realized the largest year-over-year decline: MIP equity exposure fell from 2% in 2022 to 0.6% in 2024 (approximately a 70% reduction). Staff said remaining exposure is concentrated in fixed-income holdings and that next steps will include reviewing fixed-income managers to identify opportunities to eliminate fossil-fuel exposure while meeting fiduciary return objectives. She told trustees the investment committee's near-term goal is zero exposure by an internal target date (presented in materials as 02/1930) and that staff will work with NEPC on manager replacements.
Ending: Trustees had no formal vote on the report; staff said they would continue to work with NEPC and present updates at future meetings.
