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UPDATE: September 9 at 11:03 p.m.
After years of public pressure, Harvard said on Thursday it would let its remaining investments in the fossil fuel industry expire, paving the way for an eventual divestment from the sector. The move marks a turning point in a decade-long saga that pitted student activists against university administrators and dominated campus politics for years.
In an email to Harvard affiliates Thursday afternoon, University President Lawrence S. Bacow – who has publicly opposed divestment for years – did not use the word divestment, but said that “legacy investments” through third-party companies “are in trickle-down mode,” and called reckless financial exposure to the fossil fuel industry.
Fossil Fuel Divest Harvard, which has been pushing the university to withdraw its investments in the fossil fuel industry since its inception in 2012, declared the victory.
“As long as Harvard goes all the way, it’s about divestment,” said Connor Chung ’23, an organizer at Divest Harvard. “That’s what they told us for a decade they couldn’t do, and today the students, faculty, and alumni have been vindicated.”
Bacow wrote that the Harvard Management Company, which manages the University’s $ 41.9 billion endowment, “has no intention” of making future investments in the fossil fuel industry. He said the university would not renew HMC’s partnerships with private equity funds that have stakes in the industry after its current obligations to them expire.
“Given the need to decarbonize 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. “Bacow wrote.
Fossil fuels represent less than 2% of the University’s endowment, but they will not disappear overnight.
According to a footnote in Bacow’s letter, Harvard has a legal obligation to fund “up to the maximum capital committed at the time of the investment,” meaning its endowment funds will likely be used to meet its obligations. to private equity firms that invest in fossil fuels. for the coming years.
Bacow did not provide a timeline for the liquidation.
The divestment debate has consumed the campus in recent years, with supporters of the movement filing legal complaints, storming the pitch at the 2019 Harvard-Yale football game, staging campus protests and gaining seats at the on school boards.
Harvard administrators have long argued that the school is best positioned to tackle climate change through its teaching, research and campus sustainability efforts. Until Thursday, HMC had not made an explicit commitment to withdraw its endowment funds from companies that invest in the fossil fuel sector.
HMC said in February that it no longer invests directly in the fossil fuel industry and that its indirect investments in the sector represent less than 2% of the endowment. By the end of fiscal 2020, the endowment’s direct and indirect exposure to the fossil fuel industry had declined by more than 80% since fiscal 2008.
HMC has also previously committed to achieving zero net greenhouse gas emissions in its endowment by 2050.
In its February 2021 climate report, HMC wrote that it plans to spend the next few years working to gain access to carbon emissions data from all of its public and private market managers – which historically have not provided this level of information about their portfolios.
In his letter on Thursday, Bacow also highlighted the University’s efforts to promote research on climate change, including his appointment this week of economics professor James H. Stock as the first-ever vice-rector of climate. and sustainability.
On campus, the University has been committed since 2018 to achieving fossil fuel neutrality in its operations by 2026 and to phase out its use of fossil fuels for heating, cooling and electricity by 2050. Harvard’s success in reducing campus emissions, however, has slowed in recent years. . Campus greenhouse gas emissions remained stable between 2016 and 2019 despite reductions over the previous decade, according to data from the Office for Sustainability. The University also failed to meet its waste and water reduction targets for 2020.
William E. “Bill” McKibben ’82, founder of climate campaign group 350.org and former chairman of Crimson, wrote in an emailed statement that Harvard’s “stubbornness” in refusing to back down for decades. years cost the university prestige and money.
“Honestly, I thought Harvard would never separate,” he wrote. “What he ultimately did was a huge tribute to the generations of Harvard students who never gave up, and the faculty and alumni who supported them.”
– Editor Jasper G. Goodman can be contacted at [email protected]. Follow him on twitter @Jasper_Goodman.
– Editor Kelsey J. Griffin can be contacted at [email protected]. Follow her on Twitter @kelseyjgriffin.
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