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I have served Harvard for the past six years as a duly-elected member of the Harvard Board of Overseers, and in my last act, I call upon the next University president, and the Harvard Corporation members who take his counsel, to adopt ethical investment principles. At a minimum, Harvard should direct the Harvard Management Company to divest from fossils fuels to prevent the end of life as we know it through cascading climate-driven disasters. This single act would not only take steps to address the existential crisis of our time, but it would allow the University to lead its peers, as few, if any, American universities thus far have taken this important moral stance. I stand up for this mandate on behalf of my constituents—like the faculty who warned us, the alumni who agree, and the students we disappoint—because I serve Harvard.
Many more experts than I have advocated for Harvard's leadership to take the responsible action of divesting. For instance, more than 200 Harvard faculty members, including top scientists in the field, have called on the University to divest from fossil fuel corporations. The movement to divest is large and thoroughly mainstream, comprised of many other top schools, cities, including New York City, as well as the Church of England and some pension funds. Their commitments to divest over the next few years now cover over $6 trillion in assets. So, our request, with these august endorsements, is not radical—but recalcitrance is.
Especially because it is so influential, Harvard should give moral direction to how HMC manages the endowment. These principles should be determined by the Harvard Corporation and the president, not HMC. Principles of responsibility, though otherwise common in the University’s governance, are long overdue in Harvard's investments, which must also be consistent with the altruistic purpose of this oldest of American universities, one that commands the resources of a small country, is the most famous college in the world, and whose motto is Veritas.
Ironically, the University would have seen better endowment returns over the last ten years had Harvard's leadership listened to the student and faculty movement and instructed HMC to divest from oil, coal, and gas. Fossil fuel companies have been among the worst performing sector of the market for the past 5 years, in no small part because of legitimate concerns that inevitable climate regulation will leave them with fuel reserves they can never bring to market and burn. Even Colin Butterfield, who runs natural resource investing for HMC, said he has paused all further fossil fuel investments for fear of poor returns and also because "it's stealing from the future." Moreover, studies have established that abstinence from one of the many sectors in our economy has no discernible effect on returns.
Harvard would do better investing according to its values, by ruling out positions that foment environmental harm, and simultaneously avoiding unsustainable investment practices. As the head of HMC has stated, comparing investment returns fundamentally requires considering risk taken. And unless we speedily counter fossil fuel dependence, the economy itself is doomed.
Recently, the insurance industry warned that if the world endures two degrees Celsius of temperature increase, systemic problems in insurance will emerge due to the frequency and intensity of extreme weather impacts. Imagine a business world that is not insurable. Clearly, the riskiest thing to do is nothing.
University President-elect Lawrence S. Bacow will take over as Harvard's 29th president this June. Bacow used to teach environmental science, and he certainly understands what the world faces if we don't reduce emissions and re-sequester carbon fast. I ask, and already asked, him to hear earnestly what Harvard students and faculty have been exhorting: to direct HMC to place the considerable heft of our endowment dollars in alignment with the academic and moral leadership Harvard has already shown on so many issues. I am not saying this be completed tomorrow, as the process can take a few years, but it should start now, and it should be put on a tight schedule. Taking this first stance could give leadership insights into other pressing issues like mass incarceration, toxins into our environment, and the exploitation of labor, but let us begin with divesting from fossil fuels now.
I am not going public with this call to action lightly or to be impolite. I have tried everything else—diplomatically in the background with other Overseers and outspokenly but behind closed doors in plenary. But this is too important for me to remain silent. It's because I love Harvard that I am compelled to speak with all the force of my position before it extinguishes. Harvard once refused to divest from companies doing business with apartheid South Africa in spite of a moral movement on campus. I marched in the student protests in 1980 and received the same disregard we are dishing out to our future leaders now. After ten years of dismissal, and the election of no less than Bishop Tutu to the Board of Overseers, Harvard finally reversed itself. Let's not repeat this mistake.
It's time for Harvard to stop owning climate change. We can make money ethically, with more resilient returns too. We don't just get profit from what we finance in this life, we endorse the activities underlying that profit—there is nowhere to hide from that. It is because we love our country and its most respected institutions that we call out the highest standards to which they must live.
Kathryn A. “Kat” Taylor ’80 is a member of the Board of Overseers.
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