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For rural communities in the central coast region of California, the name “Harvard” does not connote excellence. For these communities, where water is scarce and becoming scarcer, it evokes greed and exploitation.
As California takes its first steps to regulate groundwater in the midst of a worsening water crisis, Harvard’s endowment fund is investing millions into vineyards that pump inordinate amounts of water from California’s critically overdrafted groundwater basins. According to local farmers, many of whom see their own wells going dry, the University’s projects are doing further damage to the groundwater system as these communities grapple with developing state-mandated groundwater sustainability plans.
Rather than “respectfully engage with the community,” as its own investment guidelines require, Harvard has sent in high-priced consultants to blur water boundaries so that its vineyards can be fully supplied. The University has even fought (and lost) to get out of local requirements to conduct environmental impact studies for its planned reservoirs.
Harvard’s rapacious land and natural resource investment strategies are not unique to California. The University has been grabbing lands from indigenous communities, cutting down forests, and depriving rural people of access to water around the world for years. Brazil is one of Harvard's favorite farmland investment destinations. Over the past decade, the University bought approximately 750,000 acres of land in the Brazilian Cerrado, the world's most biodiverse savannah. Harvard’s farm companies have conducted massive deforestation to plant soybeans and other export commodity crops, which have virtually no benefit for local residents impacted by the destruction. Recent investigations also found that the traditional people occupying much of these lands were displaced by fraud and intimidation.
So how do such investments square with Harvard's stated commitment to go “be a good steward of the land we own and manage?" How can the University claim that its acquisitions comply with its commitments to “ethical conduct, responsible stewardship of the environment, and respect for those with whom we do business?” Read the fine print and you will see there's a hitch; Harvard only responds to environmental and social considerations if they stand to reduce its financial return. In other words, if a move doesn't cost Harvard anything, then it's fair game, no matter what the consequences are for people and the planet.
Harvard refuses to direct its endowment investment arm, the Harvard Management Company, to observe broad moral principles. Even luminary Adam Smith exhorted that capitalism only has merit when directed by ethical mores. Yet HMC’s sole obligation is to maximize profit and grow the endowment as fast as possible within mere legal boundaries. As a direct result, Harvard’s insistence on a financial “first and only” approach to investing has corrupted an otherwise exemplary academic record.
In a December interview focused on divestment from the fossil fuel industry, University President Lawrence S. Bacow said, "The endowment should not be used as a way, as an instrument of social policy...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.” In other words, like former University President Drew G. Faust — Bacow’s immediate predecessor — scolded, the endowment should not be used for political purposes. But what is "political" if not the stealing of water rights from local and indigenous peoples and the degrading of our natural commons?
We call upon Bacow, an esteemed economist, to direct N. P. Narvekar, HMC's CEO, to forge a new direction for endowment investments. As the world’s largest university endowment ($39.2 billion in 2018) and with one of the world’s top brain trusts, Harvard has no excuse for such flagrant social irresponsibility. At a minimum, Harvard should consider its own faculty's assessment of the real environmental, cultural, and local impacts of its investments. That view alone would call for divestment from water, land, and energy holdings that are accelerating climate disaster, political chaos, and diasporas. It's time for Harvard to lead, not lag, the growing field of sustainable investing. Investors the world over are watching its every move.
Eve Driver ’20 is a Social Studies concentrator in Cabot House. She is the Divest Harvard Faculty Engagement Coordinator. Isa C. Flores-Jones ’19 is a History & Literature concentrator in Dudley House. She is a Divest Harvard Coordinator. Kathryn A. “Kat” Taylor ’80 is the co-founder and CEO of Beneficial State Bank.
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