Harvard University Will Divest From Fossil Fuel Industry Because of Climate Change
Published on September 10, 2021
- Harvard University will let its current investments in fossil fuel funds expire.
- Two percent of the university's $41.9 billion endowment is invested in fossil fuels.
- The university didn't set a deadline for when its investments will end.
Harvard University will end its investment in fossil fuel companies in response to the threat of climate change, the school's president Lawrence S. Bacow announced Thursday.
"We must act now as citizens, as scholars, and as an institution to address this crisis on as many fronts as we have at our disposal," Bacow said in a statement posted to the university website on Sept. 9.
Less than 2% of the university's endowment is invested with private equity funds that have holdings in the fossil fuel industry, Bacow said. The university has not made any investments in those funds since 2019 and it will allow its commitments to them to expire, he explained. The university did not provide a timeline as to when it will be fully divested.
Harvard's $41.9 billion endowment is the largest among U.S. colleges, providing more than one-third of the university's annual operating budget supporting research and education programs. Harvard had operating expenses of $5.4 billion for the fiscal year that ended June 30, 2020. Its endowment is managed by the Harvard Management Company.
"For some time now, Harvard Management Company has been reducing its exposure to fossil fuels," Bacow said. "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."
The University committed in 2018 to reaching fossil fuel neutrality by 2026 and ending its use of fossil fuels for heating, cooling, and power by 2050. That effort has met with modest success after some early progress. Campus greenhouse gas emissions stayed flat between 2016 and 2019, according to Harvard's Office for Sustainability.
Bacow and others before him have resisted calls for the university to drop its fossil fuel investments. In 2019 he wrote in Harvard Magazine that he believed "engaging with industry to confront the challenge of climate change is ultimately a sounder and more effective approach for our university" than divestment.
But in his latest announcement, Bacow sounded a different note.
"None of us will be spared the realities of climate change, which means we are all in this together," he said. "After a career among some of the most creative and talented individuals in the world, I believe that any problem caused by people can be solved by people too. If that seems overly optimistic, so be it."
Feature Image: Paul Marotta / Contributor / Getty Images Entertainment