Following its decision to report on its stranded assets,” two weeks ago, ExxonMobil has agreed to disclose its research on the risks of fracking. Both decisions, long resisted by Exxon, came because of shareholder pressure. Enter Harvard University in response to pressure from its shareholders – students and faculty – to divest its portfolio of fossil-fuel corporations. “Climate change poses a serious threat to our future – and increasingly to our present,” wrote university president Drew Faust. “Harvard has a vital leadership role to play [and] a special obligation and accountability to the future.” It will do so in three areas: “supporting innovative research focused on climate change solutions, reducing our own carbon footprint, advancing our commitments as a long-term investor.”
While the last includes laudable and long-overdue initiatives – joining other organizations to develop best-practice guidelines and drive corporate disclosure – it specifically rejects divestment.
I have no problem with that, but Faust seems to suggest that Harvard cannot use its vast fortune in support of its core values. The endowment, Faust wrote, “is not an instrument to impel social or political change,” but a sacrosanct fund that must be above politics. Harvard is a voracious fundraiser, and in building its $32-billion endowment, it made plenty of political decisions.
Small investors are increasingly taking responsibility for their investments. If Harvard is truly committed as an institution to tackling climate change, how can it refuse to put its money where its mouth is? Don't they teach ethics in Cambridge anymore?