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As wildfires raged across New South Wales, Australia in late January, Harvard Management Company sold off its holdings in two Australian farms and purchased a minority stake in a produce company that operates on the other side of the world. By the time the fires were contained this past Thursday, 13 million acres of land and 2,500 homes had burned in New South Wales. 25 people had died. Of course, none of that probably mattered to HMC, nor to its profit margin; Harvard’s financial spectre was gone, presumably as quickly as it had arrived — now invested in South American avocados, not Australian almonds, let alone the livelihoods of the people who had grown them.
The fact that HMC invests directly in natural resources is itself unorthodox. If other large endowments do choose to invest in natural resources, they tend to do so through outside fund managers. HMC’s emphasis on natural resources stretches back to the 1990s and early aughts, when it saw strong profits in the sector. And between 2005 and 2013, HMC doubled down on the strategy. Since the financial crash, HMC has spent more than $1 billion to buy up more than 800,000 hectares of farmland around the world.
Some of these landholdings have put Harvard at odds with the surrounding communities. The University has received backlash for allegedly obstructing access to family burial sites in South Africa, causing health problems for locals in Brazil, and depleting already scarce water supplies in California. All of which should serve as a critical reminder that though HMC presumably engages in transactions involving land presumably to generate profit and diversify its portfolio, that land carries far more significance for the individuals in the community, whose homes and livelihoods depend on it. Land is where local communities build their lives; its value extends far beyond a number of hectares in a spreadsheet.
In light of this, we encourage Harvard to adopt an approach to its land and natural resource holdings that is more explicitly cognizant of the sensitivity that surrounds land ownership in any community, especially when such owners are thousands of miles away with no ties to the communities that they are impacting.
To be sure, the current CEO of HMC, N. P. “Narv” Narvekar, has changed tack significantly, overseeing a one billion dollar write-down in his first year and suggesting concerns about the risks some of these investments carry.
Still, even as HMC pulls back from natural resources, we hope it will work not just to maximize its own returns but also to be a good steward and neighbor in its natural resource endeavors. We do not view these two goals as conflicting; rather, we think that ideally, responsible stewardship and profitability should go hand in hand. HMC has already spoken to these goals in its Natural Resources Sustainable Investing Guidelines. But speech and action are not the same. And the morally ambiguous choice to sell its land holdings in New South Wales does not inspire our confidence.
HMC should not make further investments in land if it is not prepared to engage positively with the people who live there.
That said, for Harvard the issue is at once bigger and more local. The land it owns here in the City of Cambridge and in the surrounding areas is a product of the displacement of local residents, and before that, of indigenous peoples. How can the University even consider being a good steward abroad before it has come into that role in its own community? Harvard must be a community member of this land here in Cambridge, the land it holds throughout the United States, and the land it has acquired abroad.
This staff editorial solely represents the majority view of The Crimson Editorial Board. It is the product of discussions at regular Editorial Board meetings. In order to ensure the impartiality of our journalism, Crimson editors who choose to opine and vote at these meetings are not involved in the reporting of articles on similar topics.
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