Last week, Harvard’s Executive Vice President Katherine N. Lapp posted a statement online declaring that “the Harvard Management Company… will review HEI’s business practices and policies, including labor relations, and its compliance with industry standards, regulations and laws, prior to making any decision to re-invest in HEI-sponsored investment funds.”
As one of the largest investors in HEI Hotels and Resorts, Harvard has come under criticism for its connection to a company facing accusations of labor rights violations and operates four hotels under boycott. We are pleased that Harvard has finally agreed to launch an investigation into the ethics of its investment in HEI.
Students have demanded that Harvard not reinvest in HEI for almost three years. Last week’s announcement can be seen in the context not only of the recent advocacy of Occupy Harvard, which has focused on HEI after Harvard’s custodians settled their contract last month, but also of the Student Labor Action Movement and many other student groups that have been pushing for reevaluation of HEI as an investment. We, too, have advocated for this investigation. With such widespread student concern surrounding HEI specifically and ethical investing more generally, it is high time that Harvard began this re-evaluating this investment.
Certainly, a thorough investigation of allegations of labor rights abuses and mistreatment of workers is important before Harvard makes any decision about non-reinvestment. However, we presume that our peer institutions have also conducted investigations of HEI’s labor practices before issuing statements of intention not to reinvest. For example, Brown’s Advisory Committee on Corporate Responsibility in Investment Policies noted that it “thoroughly and diligently considered pertinent materials” before making the decision that Brown would no longer put its money in a company that infringes upon workers’ rights. As such, we predict that the outcome of Harvard’s investigation will indeed find that HEI is indeed an unethical investment. If it does, Harvard should commit not to reinvest in HEI until its working conditions improve.
Interestingly, this announcement is the first time Harvard has made a public statement about the ethics of any investment since 2005. Then, the Harvard Management Company declared that it would divest from PetroChina, a company that worked with the Sudanese government complicit in the genocide in Darfur. As a non-profit, taxpayer-supported educational institution, Harvard should regularly engage in socially responsible investment with its $32 billion endowment. Thus, this kind of examination is necessary and important whenever the ethics of an investment come under serious critique. We hope that this type of investigation happens regularly as a first step for more ethical investment practices of Harvard’s endowment.