Harvard University’s President announced on 9 September 2021 about the decision on ‘fossil fuels endowment’. Harvard University and Yale University were both active participants in the endowment of fossil fuels earlier and claimed to directly contribute to the climate change issue. The open letter posted by the university’s president begins with the statement — “Climate change is the most consequential threat facing humanity”.
The Ivy League’s top universities have followed the steps of Harvard for the development of sustainable measures. Consistent with the mission to reduce carbon emissions by 2050, Harvard is actively participating in the endowment for sustainable development by developing tools to monitor the carbon footprint and amplifying the research for a ‘fossil-fuel-free economy’.
Future Objectives For Fossil-Fuel-Free Economy
The United States has been participating in the development of electric vehicles and is now further expanding the plan for electricity generation. Biden’s administration has implemented a plan to install solar panels in the electric power grid of several regions. Below is the USA import data, representing the approximate share value for the USA’s solar panel imports for a taken period of six quarters (Q1 2020 — Q2 2020), acquired from global import-export database.
As aforementioned, Harvard University, with the cooperation of its Harvard Management Company, pledged last year to invest in the initiatives for reaching net-zero emissions by 2050.
Further adding on to the last year’s initiative, Harvard University’s President states in the recently posted opening statement about its fiduciary responsibility with respect to Harvard University’s climate report. The statement claims non-association of Harvard Management Company (HMC) with fossil fuel endowments, saying that “HMC has no direct investments in companies that explore for or develop further reserves of fossil fuels”.
President mentions that Harvard Management Company is “building a portfolio of investments in funds that support the transition to a green economy”. Additionally, the letter mentions that HMC will work with different organisations to engage investors in the investment process, and will extend its own operations greenhouse gas neutral by June 30, 2022.
Harvard University Endowment
The ‘disinvestment’ for fossil fuels have been a long-running effort from several activist groups. One of them is Divest Harvard, which shared its achievements for a decade of a fight to stop fossil fuel endowment by top-notch universities such as Harvard.
According to the President of Harvard University, the biggest endowing university accounts for only about 2% of the total investment in the development of fossil fuels. The open letter posted by the President of Harvard University clearly states that the institution does not associate with the development of fossil fuel reserves. Furthermore, it mentions that even when no direct investments are part of Harvard’s mission, any indirect investment through private equity funds is allowed to slip.
This has resulted in speculations for the ‘shift’ in the intention for ‘divestment’ towards fossil fuels. Even when Harvard University has let go of all the endowments in the fossil fuel industry for “the future”, people are not so sure what it says about now…
In the officially posted open letter, the president adds that HMC has no future plans for investment in the fossil fuel industry. He added — “Moreover, HMC does not intend to make such investments in the future. Given the need to decarbonize the economy and our responsibility as fiduciaries to make long-term investment decisions that support our teaching and research mission, we do not believe such investments are prudent”.
The gradual elimination of fossil fuels seems to be the target of Harvard University, with further initiatives on climate change and collaboration with potential investors.