Harvard University President Drew Faust convened a panel yesterday led by seven experts on climate policies and energy sources and anchored by a star of the journalism world, Charlie Rose.
It came in response to mounting pressure from Harvard students, faculty and alumni on the university to divest its $35.9 billion endowment — the largest of any college or university worldwide — from investments in coal, oil and natural gas companies.
The panel largely sidestepped the subject of divestment.
"We will see a lot of harm if we do very little," John Holdren, the White House science adviser, told Rose and the audience when describing the manifestations of a hotter world driven by human action. He included wildfires, droughts, encroaching sea levels and other effects. "Climate change is doing harm now, in many places across the United States. In many places across the globe."
All the panelists signaled their agreement with Holden on the gravity and basics of climate change.
But of the seven panelists, Naomi Oreskes, a history professor at Harvard who argued in favor of fossil fuel divestment at a debate hosted at the Massachusetts Institute of Technology on Thursday, was the only one to offer a full-throated endorsement of divestment across all fossil energy sources (ClimateWire, April 10).
"We need a disruptive social conversation," Oreskes said, calling for divestment, to a roar from the audience.
For the past 20 years, she said, the fossil fuel industry has been supporting public relations campaigns and lobbying efforts to undermine the public’s belief in climate change, while also working to undo the academic research on global warming completed at institutions like Harvard.
A 3-year battle grinds on
A few seats over, Rebecca Henderson, a co-director at the university’s Business and Environment Initiative at Harvard Business School, said she’s wary of ditching fossil fuel firms flat-out.
"It make me so uncomfortable," Henderson said, qualifying that she has publicly supported coal divestment. Rather than across-the-board divestiture, institutional investors could sell their shares from companies that finance public relation campaigns to confuse the public on climate change, she said.
Modern energy companies vary, she added, contrasting the practices of Exxon Mobil Corp. and Royal Dutch Shell PLC. "I’m very uncomfortable with a blanket policy," she said. "I think we’re going to need oil and gas going forward."
Other panelists said complete divestment may polarize or politicize an already tense topic.
"Putting all fossil fuel companies in the corner, strategically, is what I’m worried about," said Daniel Schrag, a Harvard professor and director of the university’s Center for the Environment.
In a statement in 2013, Faust said the university is committed to combating climate change and that university endowments are a sliver of equity within public coal, oil and natural gas companies. That position from the university has not changed.
"I also find a troubling inconsistency in the notion that, as an investor, we should boycott a whole class of companies at the same time that, as individuals and as a community, we are extensively relying on those companies’ products and services for so much of what we do every day," she wrote at the time. "The endowment is a resource, not an instrument to impel social or political change."
This campaign began in 2012, spearheaded by Divest Harvard, an on-campus group that has organized sit-ins, marches and speeches and whose members began a blockade of Massachusetts Hall — where Faust has her office — that they have said will run through Friday.
In a response after the panel talk ended, Divest Harvard said divestment is a financial tool to address political hurdles.
"This action alone will not solve the climate crisis," the group said in a statement. "Crucially, however, divestment will create the political space for the solutions — including those the university is so proud to have produced — to be implemented."
Faust and top university officials have said that remaining a shareholder within companies, such as oil or gas firms, gives them leverage to negotiate and push the private sector to adopt improved climate policies. (University representatives did not respond to questions about Harvard’s involvement with shareholder resolutions or whether the endowment officials vote on shareholder resolutions for companies in which the university is an owner.)
Last April, Faust announced that Harvard would become the first university to follow the United Nations’ Principles for Responsible Investment — a financial rubric for investors that prioritizes environmentally sustainable decisions.
An analysis of Harvard Management Co.’s latest 13-F holding, which documents some changes in an institutional investor’s portfolio, found the energy sector is the third-largest sector by weight within the $994 million portfolio, behind the finance and health care sectors. About 13 percent — or $124 million — of the fund calls the energy sector home.
Between the third and fourth quarters of last year, amid a market of sliding oil prices, Harvard’s financial managers sold off the fund’s entire stakes in two Kinder Morgan Inc. divisions. Yet they also purchased $2 million worth of stock in Baker Hughes Inc., the oil field services company, and Petrobras, the Brazilian oil firm, following market weakness and buying when prices were down.
(Harvard Management Co. oversees more than $994 million in stocks, including other asset classes, but that figure is the total sum disclosed on the latest Securities and Exchange Commission filing.)
‘Admirable’ advocacy, but no standing in court
Before the talk yesterday, Neva Rockefeller Goodwin, whose family accumulated its wealth through the oil business, spoke in favor of divestment, noting that continued investment in the fossil industry might discourage alumni donations. Campus police locked Bill McKibben, the environmental advocate and Harvard alumnus, in a campus office with other demonstrating alumni. And Tim Wirth, also an alumnus and the Democrat who represented Colorado in the Senate beginning in the 1980s, spoke of the need to divest.
A handful of Harvard students sued the university in the fall, citing a "mismanagement of charitable funds" and asking the Massachusetts county court to force the university to divest for the students and "future generations." The plaintiffs’ complaint argued that the school has funded "abnormally dangerous activities."
In their document to the court to dismiss the suit, attorneys for the university said the students lacked legal standing to back up their case.
"Allowing plaintiffs to air their grievances with Harvard’s fiduciary decisions in this court would be both unprecedented and unwarranted," the response from the university’s legal team reads.
Paul Wilson, the judge whose desk the case landed on, ruled against the students in March but seemed to hint at a moral cause underpinning the students’ request.
The plaintiffs, Wilson wrote, "have brought their advocacy, fervent and articulate and admirable as it is, to a forum that cannot grant the relief they seek."
