From the development of the smallpox vaccine in 1799 to exposing the role of fake news on Twitter in the 2016 U.S. election, few American universities have produced as many advances in human knowledge as Harvard. In September, the elite school chalked up another breakthrough when its embattled president, Lawrence Bacow, announced that working with fossil fuel companies is not the best way to battle the climate crisis.
It was a major reversal for Bacow, who has dodged protesters’ demands that Harvard’s US$40-billion worth of endowment funds divest all traces of oil, gas and coal investments. By the end of 2020, Harvard Management Co. (HMC), custodian of the world’s largest endowment, had actually reduced fossil fuel investments from 11% of its portfolio in 2008 to 2%. But as Bacow, a one-time environmental studies professor, wrote in an article for the independent Harvard Magazine, “I, like my predecessors, believe that engaging with industry to confront the challenge of climate change is ultimately a sounder and more effective approach.”
That familiar brush-off was finally retired on September 9, when Bacow announced that HMC no longer directly owns any fossil fuel investments and “does not intend to make such investments in the future.” He conceded that HMC retains some “legacy investments” through limited partnerships but said those activities “are in runoff mode and will end as these partnerships are liquidated.” Looking ahead, he promised, “HMC is building a portfolio of investments in funds that support the transition to a green economy.”
The announcement came just two days after the nine-year-old Divest Harvard movement held a climate rally for returning students. Against the backdrop of floods, forest fires and hurricanes then devastating American communities, the students carried a massive blue banner symbolizing the rising ocean tides that they said are coming to Harvard’s door.
Activist students hailed Bacow’s reversal. “It’s a massive victory for our community, the climate movement, and the world – and a strike against the power of the fossil fuel industry,” Divest Harvard reported.
The organization framed Bacow’s statement as a milestone in the climate wars. “From the beginning, Harvard has sought to duck, dodge, and deny: claiming that fossil fuel stocks were necessary for profit, claiming that the endowment shouldn’t play a role in fighting climate change, and even claiming that fossil fuel companies are part of the solution. And the fossil fuel companies have loved this, constantly holding up Harvard’s embrace of the industry as a vindication of the industry’s unjust and unsustainable vision for the future.”
Author Bill McKibben, a Harvard grad who founded the climate campaign group 350.org, said he thought Harvard would never divest. “That it finally did is an enormous tribute to generations of Harvard students who have never let up, and to faculty and alumni who backed them up.” Still, McKibben believes Harvard’s “obstinance” in refusing to divest has cost the university prestige and money.
Spoiling the party was John S. Rosenberg, editor-in-chief of Harvard Magazine. He pointed out that Bacow’s statement never actually used the term “divestment” and that 60% of Harvard’s endowment is entrusted to private equity and hedge funds – independent investors who may have different investment strategies. If Harvard has instructed any such partners to avoid all investments that support the fossil fuel industry, Rosenberg wrote, “it has not said so.”
Later, Harvard prof Naomi Oreskes and Sofia Andrade of Fossil Fuel Divest Harvard penned an op-ed in The New York Times that clarified things somewhat. America’s oldest university will divest an estimated $838 million of its $42-billion endowment from fossil fuels, which they called “the first step toward a just transition to a greener future.”
Also this fall, Boston University and the University of Minnesota joined more than 1,300 schools and institutions that have divested, at least in part, from the fossil fuel industry.
Some will dismiss divestment as symbolic, said Oreskes and Andrade. Regardless, symbols matter, they wrote: “Harvard’s divestment is a signal to other investors that as the planet burns, finance must not stand with the arsonists.”