Harvard University has bowed to pressure and vowed to rid itself of its fossil fuel investments.
Last week, the institution’s president Lawrence Bacow said in a publicly available (and lengthy) note that it would no longer commit any money to companies that ‘explore for or develop further reserve of fossil fuels’. Bacow said that the impetus for this had come from stories of increased weather events due to climate change.
He wrote: “For some time now, Harvard Management Company (HMC) has been reducing its exposure to fossil fuels. As we reported last February, HMC has no direct investments in companies that explore for or develop further reserves of fossil fuels. Moreover, HMC does not intend to make such investments in the future. Given the need to decarbonise the economy and our responsibility as fiduciaries to make long-term investment decisions that support our teaching and research mission, we do not believe such investments are prudent.”
He added: “HMC has legacy investments as a limited partner in a number of private equity funds with holdings in the fossil fuel industry. These indirect investments constitute less than 2% of the endowment, a number that continues to decline. HMC has not made any new commitments to these limited partnerships since 2019 and has no intention to do so going forward. These legacy investments are in runoff mode and will end as these partnerships are liquidated.”
Going forwards, Bacow said that the university was building a portfolio of investments to support the transition to a green economy.
Despite the university’s noble intentions, there was still criticism. As reported in The Guardian, Anne Simpson of the California Public Employees’ Retirement System said, “If big investors divest their holdings, we lose the base of ownership, which is going to be able to drive change. If we sell our shares in oil and gas companies, we’re losing an opportunity to have an influence.”
This is not the first time this year that higher education has listened to criticism over its investments, and taken action. In June, the Universities’ Superannuation Scheme announced that it would divest from tobacco, coal, and weapons, following protests over the scheme’s heavy investments in these sectors.