Harvard presidents have long maintained that the University’s endowment is not an appropriate tool for enacting social change. It’s a line former University President Drew G. Faust used repeatedly to justify not divesting from fossil fuel companies when campus activists demanded she do just that.
In an interview last week, University President Lawrence S. Bacow broke from his predecessor to offer up a new line of argument for sticking to the status quo: not only is divesting to compel change improper, he said, but it is also impractical and ineffective.
His remarks came amid renewed demands from students and faculty that the University end its investments in fossil fuels — and in the wake of major federal and United Nations climate reports that sparked discussion around the world about the dire consequences of human-caused climate change.
Offering his rationale for why Harvard should not divest its holdings in the fossil fuel industry, Bacow cited practical concerns that would complicate divestment and a need to work with industries in order to “bring about meaningful change.”
He added that any significant shift in climate policy must come from both scholarship and cooperation with fossil fuel companies.
“The endowment should not be used as a way, as an instrument of social policy,” Bacow said. “I think there are far more effective ways for us to influence social policy, public policy, as well, through our research, our scholarship, through our actions and through our teaching. And I think in the case of the fossil fuels, we're doing exactly that.”
He added, “It's also the case that if we want to bring about meaningful change — as I think we should — in trying to help create clean paths to energy, that we need to be willing to work with those organizations and institutions that are responsible for the infrastructure that literally fuels our economy.”
Bacow also noted that, even if the University were willing to divest its $39.2 billion endowment from fossil fuels, “practical issues” would complicate this effort because Harvard invests in the industry indirectly.
“Do you not own an index, for example, which has holdings in the automobile industry? It's not a fossil fuel directly, but it's the source of consumption of a lot of fossil fuels. Do you not own a utility, which generates electricity through the consumption of fossil fuels?,” Bacow said. “I could go on, so I just think it's not an effective policy to bring about reductions in carbon emissions.”
This is the first time Bacow has expanded on the position Faust maintained throughout her tenure. In 2013, Faust wrote in a press release that the University’s endowment is a “resource” and should not be thought of as “an instrument to impel social or political change.”
Bacow’s remarks Monday came a day before a group of more than 100 Harvard faculty members released a petition urging Bacow to end the University’s investments in fossil fuels.
“Harvard Management Corporation’s continued investment in the fossil fuel industry is discordant with our mission and with the purposes of the endowment,” the letter reads. “Indeed, this industry’s misconduct is so egregious and its global consequences so dire, that it warrants investor action at least as decisive as in the case of tobacco or apartheid South Africa.”
University spokesperson Melodie Jackson could not be reached for comment Thursday evening.
The University divested a portion of its holdings in companies doing business in South Africa in 1986. It pulled its investments from tobacco companies in 1990.
Harvard Undergraduates for Environmental Justice are also circulating a new online petition that urges divestment. The petition had garnered more than 200 signatures as of Thursday evening.
Bacow said it would be “hypocritical” for the University to both use the products sold by the fossil industry and divest its holdings from that industry.
“It strikes me as hypocritical to say we're willing to work with you, we're willing to do research with you, we're willing to engage with you, we're willing to buy your product, while at the same time saying but we will not consider owning your stock,” Bacow said.
—Staff writer Alexandra A. Chaidez can be reached at firstname.lastname@example.org. Follow her on Twitter @a_achaidez.