Harvard University prides itself on being on the cutting edge of climate policy and research. Its students and faculty have deployed drones over the Amazon, worked on a “bionic leaf” to turn sunlight and water into fuel and fertilizer, and searched for a cheaper electrochemical method of capturing carbon dioxide.
But there’s at least one step on climate change that Harvard has not taken: divesting the university’s $39 billion endowment of investments in fossil fuels.
Over the past six months, more than 300 Harvard faculty members have signed a petition calling for divestment of fossil fuel stocks. Students, before departing for the summer, held Heat Week to highlight climate change. And leading alumni such as former U.S. senator Timothy Wirth of Colorado and former vice president Al Gore, as well as others such as Stephen Heintz, president of the Rockefeller Brothers Fund, have written to Harvard President Lawrence Bacow urging the university to reverse its position.
They have chosen an auspicious moment to make these efforts. Congressional Democrats are weighing the Green New Deal, climate change has popped up in the Democratic presidential debates, and the Senate Finance Committee’s ranking Democrat, Ron Wyden of Oregon, and 25 colleagues have introduced a bill to make the tax code climate-sensitive.
More than 1,070 institutions in more than 30 countries, with total assets of about $8.8 trillion, have divested themselves of fossil fuel shares since a divestment campaign began about nine years ago, according to the website GoFossilFree.org. Some, including the Rockefeller Brothers Fund, have sold their stakes in all fossil fuel companies. Others, including Georgetown University, have sold off coal and tar sands investments only.
With climate change policy lagging in the United States, many are hoping that a push by the nation’s academic elites will provide impetus for wider action.
So far, however, only 47 U.S. colleges and universities have chosen to divest and only 10 have taken that step since 2017, according to the environmental activist group 350.org. And the Harvard faculty members who have signed the divestment petition represent less than 14 percent of the faculty.
But advocates of divestment have rattled universities across the country. At Yale University, the Environmental Justice Coalition held three sit-ins in the lobby of the Yale Investments Office’s building over six months. A group called Go Fossil Free helps students and colleges mount efforts to support divestment of fossil fuel shares. And author Bill McKibben, a Middlebury College professor, leader of 350.org and a Harvard alumnus, has been campaigning for divestment on campuses across the country.
And divestment campaigners have had some high-profile success. Columbia University in 2017 said it would sell holdings in coal companies. In January, Middlebury said it would phase out of fossil fuel investments, reversing a position taken six years ago.
Pension funds have also come under pressure to divest. On June 12, Norway’s parliament ordered the country’s trillion-dollar sovereign wealth fund — built largely from fossil fuels — to sell its holdings in about 150 oil and gas companies and invest up to $20 billion, about 2 percent of its total, in renewable energy, mainly wind and solar projects.
Divestment activists argue that selling shares in fossil fuel companies would be in line with Harvard’s ethical standards, send a message to other investors, and rid the endowment of stocks whose prospects are poor.
Yet the university has not wavered in its opposition to fossil fuel divestment since 2013, when then-Harvard President Drew Faust declared: “The endowment is a resource, not an instrument to impel social or political change.”
She said that political investment decisions could “entail serious risks to the independence of the academic enterprise” and that the endowment’s small stakes would have “negligible financial impact” on the companies. And she said that it would be more effective to “favor engagement over withdrawal.”
“I love Harvard, but it has a history of reluctance on these things,” said Gore, who called for divestment in a speech to graduating Harvard students this year. He said the university had also delayed selling shares of companies involved in South Africa when apartheid was still in force and selling shares of tobacco firms because of health concerns.
“This one is in that same mold, and eventually they’ll have to do it,” Gore added, “plain as the nose on your face.”
Harvard divested itself of nearly a third of its holdings in companies doing business in South Africa in 1986, on the same day the Republican-led Senate approved economic sanctions on South Africa, overriding President Ronald Reagan’s veto. This spring, after intense pressure, Harvard disclosed that the university’s private investment in companies tied to the prison industry totaled just $18,000.
“I think it is both an economic decision and a moral decision,” Gore said in an interview. He said that the returns on fossil fuel stocks have gone down and that returns on renewable energy stocks have gone up. Moreover, he said, most of the proven coal, oil and gas reserves on the books of fossil fuel companies “can’t be burned and won’t be burned,” regardless of whether the United States is in the Paris climate agreement. He said there would be a “carbon bubble directly analogous with subprime mortgages,” which played a key role in the financial crisis of 2008-2009.
Caren Solomon, a physician at Brigham and Women’s Hospital and an associate professor at Harvard Medical School, compared divestment of fossil fuel shares to divestment of tobacco shares. In May 1990, Harvard quietly acknowledged that it had sold off tobacco company stocks because their products posed “a substantial and unjustified risk of harm to other human beings.’’
“From a public health standpoint, climate change is disastrous,” Solomon said. “When we burn fossil fuels, we release greenhouse gases and particulate air pollutants. Air pollutants cause heart and lung disease and early death.”
Continued global warming “would have even more devastating effects on health over time, with more heat-related illnesses, more allergies, the greater spread of insect-borne diseases, more waterborne diseases, and more malnutrition because of the effects of carbon dioxide on crops’ quality,” she said.
Yet people across the political spectrum still side with Harvard and other institutions resisting pressure to divest.
Robert D. Reischauer was a senior fellow of the Harvard Corp. and supported then-Harvard President Faust’s position against divesting the university’s stake in fossil fuels:
“We have guns, abortion, all sorts of other issues. And movements to stop all investments in countries that aren’t acceptable in terms of human rights,” he said. “It’s a slippery slope.”
He said that “Harvard’s policy is that they don’t want to subject the choice of investment opportunities to petition or popular movement.”
N. Gregory Mankiw, a Harvard economics professor who was chairman of President George W. Bush’s Council of Economic Advisers, said in an email: “I believe the university should remain focused on its central purpose — the creation and dissemination of knowledge. Once we start using the endowment to address other goals, there become too many candidate industries that some group within the university community will want to divest from, such as guns, tobacco, cannabis, and alcohol.”
Another issue that could pop up: companies doing business with Israel. “Divestment was seen as a way of protesting the treatment of the Palestinians,” Mankiw said.
Mankiw has been a vigorous supporter of climate action. He favors the imposition of high carbon taxes combined with refunds to households. But regarding divestment, he said: “I am skeptical of demonizing the fossil fuel industry. Even under an optimal climate policy (which we do not have today), there will be some use to fossil fuels for the foreseeable future.”
But students are impatient.
In the past, the Harvard Crimson ran editorials saying that divestment would have little impact on big oil companies and that the university would be better off researching ways to get consumers off fossil fuels.
In May, however, the Crimson reversed its position, saying that climate change posed “an existential threat” and that the university’s position “compromises its efforts to position itself as an academic institution at the forefront of the fight against climate change.”
The paper said that in the past, it had argued that divestment wasn’t practical, wouldn’t affect the stock or bond market, wouldn’t reverse climate change and would hurt the endowment.
“But in an era in which climate change is more rampant, more destructive, and more visible than ever — not to mention the attacks on its scientific reality — we realize that we can no longer view an endowment with investments in fossil fuels as an economically sensible future,” the paper said. And besides the Crimson added, “symbols matter, and the endowment is a symbol of Harvard’s values.”
The paper added: “We have not led this charge. But we now join it.”
“Students care a lot about the climate crisis,” said Ilana Cohen, a student leader in the Harvard divestment campaign, though it sparked relatively modest turnouts at demonstrations last year.
“Youth has, in a way, the most at stake in the climate crisis,” Cohen added. “It’s our future, and we are going to bear the burden of what our parents and grandparents have done. There’s this kind of imminent need to take action because our futures are really on the line.”
Correction: An earlier version of this story incorrectly said Stephen Heintz, president of the Rockefeller Brothers Fund, was an alumnus of Harvard. He graduated from Yale University.