At its first meeting of 2020, the Faculty of Arts and Sciences (FAS) concluded an extensive debate about climate change by voting today in favor of an advisory motion calling upon the Corporation to direct Harvard Management Company (HMC) to shed certain investments, if any, in enterprises involved in fossil-fuel production. Last weekend, organizers for the Harvard Forward campaign delivered petitions to the Office of the Governing Boards, seeking to qualify a slate of pro-divestment candidates for this spring’s election of new members to the Board of Overseers. Together, these events suggest that the intense organizing and advocacy for divestment that characterized the fall semester continue, and have perhaps even intensified, at the start of the new term, while the Corporation has maintained its longstanding opposition.
The Faculty’s Decision
At the request of proponents of divesting holdings in companies involved in fossil-fuel production, who had long sought such an airing of the issue, the FAS has devoted most of its meeting time this academic year to discussing climate change and faculty-originated proposals for divestment. (Accounts of the October, November, and December presentations and debates can be found here, respectively.)
For the most part, the presentations on the Faculty Room floor came from proponents, among them professors who have advocated divestment for several years—although there were a few dissenting perspectives: that the faculty’s business focuses on academic matters—teaching and research, for example; or that divestment is a politically charged and symbolic measure, not a practical one.
Harvard Faculty for Divestment listed 550 signatures on its petition as of February 3: not all of them from FAS by any means, and up robustly from the figure posted last fall—but still a fraction of the faculties University-wide, who number perhaps 2,300 or so, depending on how they are counted. [Editor’s note, February 5, 2020, 10:00 a.m.: A careful reader notes that not all of those who have signed the faculty petition are among the 2,300 people considered regular University faculty members: some are visitors, some are researchers, etc.] Nonetheless, among the FAS members who attend faculty meetings, support for divestment has appeared strong. [Editor’s note, February 5, 2020, 10:00 A.M.: For the record, the FAS has 870 voting members at present; attendance at and participation in formal faculty meetings is typically a small fraction of those eligible. That was the case at the February 4 meeting, as well, even with a standing-room-only crowd in the Faculty Room. The number of votes cast, reported below, is not unusual for a contested, much-debated issue before the faculty.] The measure was introduced for discussion, as faculty rules require, at the previous meeting. Nicholas Watson, Cabot professor of English literature and chair of the department, moved that:
…the Corporation should instruct the Harvard Management Company to withdraw from, and henceforth not pursue, investments in companies that explore for or develop further reserves of fossil fuels, or in companies that provide direct support for such exploration and development; over a reasonable period of time, extend those instructions to advisers of investment vehicles used by Harvard’s endowment, including commingled funds where Harvard is not the sole investor; and ensure that any adviser who may be unwilling or unable to comply is replaced by one who is willing to carry out these instructions.
As worded, the language is subtly crafted to be something less than a call for blanket divestment, in that it focuses on companies that “explore for or develop further reserves”—suggesting that a company devoted solely to producing and selling its current, extant reserves (thus effectively liquidating itself) would not fall under the guidance. That motion was the issue before this afternoon’s meeting—the only substantive item on the formal agenda for the session.
But picking up in part on remarks made in December by Olshan professor of economics John Y. Campbell, an amendment to the main motion was introduced before it could be voted on. Campbell had noted that Watson’s motion addressed the supply of climate-altering fossil fuels, but overlooked demand for such energy—and the deployment of economic incentives to lessen use of greenhouse-gas-emitting sources of energy. (Campbell, whose field is investment management, said that it is possible to structure a portfolio to “penalize the average [carbon] footprint” of the investments overall.)
Accordingly, divestment proponent James Engell, Gurney professor of English literature and professor of comparative literature, proposed that following the final word “instructions” in the main motion, the text be amended to read:
and that the Corporation and HMC subject all endowment investments to a system of decarbonization with the goal of achieving internationally agreed standards of emission reduction commensurate with IPCC [Intergovernmental Panel on Climate Change] reports.
In support of this rather condensed language, Engell told the attendees:
Financial investments must take into account the growing risks associated with climate change. In order to minimize greenhouse-gas emissions and the resulting disruption in our climate, it’s necessary to decarbonize the global economy.
Capital investments must support decarbonization. Otherwise, decarbonization will stall, exacerbating the negative effects of climate change on human society and biodiversity.
He cited movement toward lower-carbon portfolios on the part of some investment-management professionals, cast doubt on the efficacy of current screening practices and investment filters at HMC, and expressed the hope that “Harvard will be a leader and not a laggard in decarbonizing its investments.” He also acknowledged, “We are all too aware that this faculty are not professional investors and that whatever we move and approve today is advisory only”—because investment policy is set by the Corporation. Those who supported the amended motion, he said, hoped that doing so “will provide the Corporation and HMC with support and encouragement for taking an urgent path forward to the kind of world we all want, one of lowered climate risk for future generations.” (See Engell’s full remarks below.)
Watson accepted the motion as “friendly” and made the case for adopting it and the main motion. He said that nearly 200 universities and colleges around the world have already moved toward some form of divestment. He also said that Harvard’s decision not to divest was singled out by the Independent Petroleum Association of American (IPAA), making the University “a poster-child for the industry precisely because of our refusal to divest.” He asked, “[D]o we really want to be at the forefront not of addressing climate change, the fundamental challenge of our times, but of the fossil-fuel industry’s efforts to maintain the status quo that is destroying the planet?”
With one dissent, the amendment carried by voice vote.
In the brief discussion on the main motion, as then amended, Dustin Tingley, professor of government, rose to say that although he was deeply committed to combating climate change and found it difficult to oppose divestment, he did so on two grounds. First, he said, “Divestment by Harvard is largely a symbolic move”—and symbolism is “hard to direct, contain, and control.” Given the many people who earn their livelihoods in the energy industry, he said, Harvard’s decision could be subject to interpretations the faculty did not intend, prompting a backlash against Harvard and the constructive work it could contribute. Second, he said, that work derives from the University’s comparative advantage as a research and teaching institution. Thus, he would vote against disinvestment but in favor of investment in research and teaching on climate change.
Phillips professor of early American history Joyce E. Chaplin, who had spoken harshly last fall about Harvard’s history of considering issues concerning its investments, today ran through the worldwide roster of educational institutions, medical societies, philanthropic institutions, and others that have elected to divest fossil-fuel investments. Fossil fuels, she said, had become like tobacco: a product that could not be held ethically in a portfolio. She urged a vote in favor of divestment, even at this “late moment in the divestment movement,” when Harvard’s decision to do so could still be consequential.
Barker professor of economics Stephen A. Marglin, invoking the old union-organizing song, asked, “Which side are you on?” Given the volume of fossil fuels being used and their producers’ commitment to continue doing so, he said, Harvard could no longer defer deciding to divest. Echoing earlier speakers, he asked, “Do we line up with the IPAA or with the IPCC?” He urged proceeding to divest now, rather than in the future, when “nobody cares” what Harvard does.
[Editor's note: Chaplin’s and Marglin’s full statements appear below.]
With that, professor of Romances languages and literatures Virginie Greene, a divestment proponent, asked for a paper-ballot vote. The faculty agreed, ballots were circulated, and after a recess, the docket committee advised President Lawrence S. Bacow that it had a tally. He announced the vote: 179 for, 20 against.
Bacow, as a Corporation member, has been opposed to divestment. In closing this meeting, after the vote, he said he wanted to “thank the faculty for a very thoughtful discussion” extending across four meetings throughout the academic year to date. He promised to take the debate and vote back to the Corporation for the thoughtful consideration they deserve, and to report to the faculty later in the semester. He closed by reiterating what he had said last fall: “We agree on far more than we disagree.” Among those points of agreement are that climate change is “an existential threat to the planet”; that time is of the essence; and that as a society, a nation, an institution, and individuals, each has a role to play in responding to the challenge. Harvard has a role in responding, too, he continued, as all parties seek to effect changes that are “reasonable, responsible, and rapid.”
Where there are disagreements, he said, like those that came out within FAS during its debates and in the vote today, they concern what actions should be pursued to bring about the kinds of needed changes.
Bacow then thanked the assembled professors for participating in this “important process of faculty governance,” and the meeting was adjourned.
Harvard Forward’s Overseer Slate
During the quiet period between semesters, the effort to nominate by petition a five-member slate of candidates for the Board of Overseers—launched by Harvard Forward last November, and requiring valid signatures from 2,936 eligible alumni for each prospective candidate—was in overdrive. As the Harvard Alumni Association’s Committee to Nominate Overseers and Elected Directors presented its eight nominees on January 9, Harvard Forward organized volunteers in dozens of cities around the world to collect signatures both online and on paper petitions. According to its February 1 news release, it had been able to complement “nearly 1,400 online signers” with “more than 3,400 unique in-person signers” for each candidate when it delivered petitions to Loeb House on Saturday afternoon. The Office of the Governing Boards, which oversees the election, has two weeks, until February 15, to review the signatures; if a sufficient number are found valid, the five petition candidates will be added to the ballot. (Voting begins April 1; the five winners will be announced on Commencement afternoon, May 28.) The petition slate of Overseer-aspirants are pledged not only to fossil-fuel divestment, but also to new investment policies and changes in governance (including reserving a portion of the Overseers positions for younger alumni).
This would be the first full-fledged challenge slate for the Overseers since 2016—when petition candidates needed just 200 signatures to become nominees. Given the higher hurdle to secure a place on this year’s ballot, Harvard Forward’s success in gathering the number of signatures it presented, and its use of social media and online outreach to engage adherents, suggest that this could be a vigorously contested campaign if the petitioners are certified. That would ensure that the debate over climate change, and the role of investment policy in shaping Harvard’s response to it, reverberate through the larger alumni community.
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FAS Faculty Meeting Statement by James Engell
[Editor’s note: These remarks, added to this report on February 5, 2020, at 9:55 a.m., followed Engell’s introduction of his amendment to the main motion, which appears above.]
This amendment follows from remarks at the last FAS meeting, as well as from extensive reflection and communication not only regarding the motion introduced at the December meeting but stemming from much earlier discussions.
Financial investments must take into account the growing risks associated with climate change. In order to minimize GHG [greenhouse-gas] emissions and the resulting disruption in our climate, it’s necessary to decarbonize the global economy.
Capital investments must support decarbonization. Otherwise, decarbonization will stall, exacerbating the negative effects of climate change.
We recognize that the process of decarbonization will take years.
We also recognize that in the past 30 years, many governments, companies, and investors have acted in a business-as-usual fashion that perpetuates a carbon-based economy and its long-term infrastructure. We recognize that not only must this change, the less rapidly it changes, the more severe the consequences, the greater the burden and costs placed on our students and their children.
Many institutions and investment firms now employ increasingly tough standards regarding climate risk, decarbonization, and transparent reporting. For example, in December 2019 the TCI hedge fund, with $28 billion under management, set a rigorous policy. BlackRock, which in October 2015 stated, “The time to start decarbonizing portfolios is now,” in January 2020, perhaps realizing that it had not acted nearly urgently enough, outlined new climate initiatives. As Harvard has done, BlackRock joined Climate Action 100+. But in December of last year, Sir Christopher Hohn of TCI stated, “Major asset managers such as BlackRock have been shown to be full of greenwash,” and Hohn called the voting of BlackRock on climate-related resolutions “appalling.”
From the information we have been able to gather, it seems unclear that present ESG [environmental, social, and governance] screening and practices of HMC are adequate to achieve decarbonization in line with the Paris accords and to avert increasingly severe climate risks and consequences.
We hope that Harvard will be a leader and not a laggard in decarbonizing its investments. Already investment firms are competing to achieve tougher standards of decarbonization and, as we have just heard, have made public accusations that certain other firms practice decarbonization schemes that sound good but are “full of greenwash.”
We are all too aware that this faculty are not professional investors and that whatever we move and approve is advisory only. Yet, those who support this amendment and the motion include scientists with some of the best knowledge in the world regarding climate issues. The group supporting the motion and this amendment have consulted with investment professionals, including a former chair of the U.S. Securities and Exchange Commission appointed twice by President Ronald Reagan.
We hope that this amended motion will provide the Corporation and HMC with support and encouragement for taking an urgent path forward to the kind of world we all want, one of lowered climate risk for future generations. As Harvard reduces its own use of fossil fuels according to its climate action plan, it’s fitting that its portfolio decarbonize.
Professor John Campbell of the economics department spoke about decarbonization at our December meeting. This amendment is in that spirit. He stated, “I would argue that what we want to do is to reduce the carbon footprint of Harvard’s entire portfolio as a way to discourage the flow of capital to all carbon-intensive activities, and to increase the cost of capital for companies that engage in them.”
For example, the Brunel Pension Partnership, which invests £30 billion, about equal to the Harvard endowment, will demand that companies in which it invests align their emissions with targets agreed in the 2015 Paris Accord, and, much like TCI, will fire asset managers who do not follow this directive, will vote against company directors who do not insist on reduced emissions, and, starting in 2022, may entirely divest from any company that does not decarbonize according to these targets.
Challenges accompany decarbonizing a portfolio; sufficiently stringent standards are needed; there is imprecision in the Greenhouse Gas Protocol; it all takes time and effort to manage. But if not done rigorously, far more time and effort will be spent fighting increased climate risk and actual damage.
This amendment neither contradicts nor minimizes the motion to divest from companies that continue to seek and develop new reserves of fossil fuels, and to divest from companies that support such undertakings.
An amended motion addresses the supply and demand of carbon. The amendment addresses demand. The original motion addresses supply from those who continue to seek new reserves. If the HMC already pursues thorough and rigorous decarbonization, then this amendment cannot be objectionable. If not, then this amendment seems appropriate.
If colleagues approve of the substance of this amendment but oppose the motion itself, then let them move the wording of this amendment, or something very similar to it, as a separate motion at a future meeting this spring.
The amendment invokes IPCC reports because they provide some of the most comprehensive data and reporting on global climate change over time. These reports continually provide facts and projected ranges of global climate change. The IPCC reports form a primary factual basis of international climate agreements.
FAS Faculty Meeting Statement by Joyce E. Chaplin
President Bacow, colleagues: The last time I addressed you, I spoke about the past, in particular about Harvard’s compromised history in relation to financial interests connected to racism and white supremacy, most notably in South Africa under apartheid.
Today, I’ll be talking about much more recent events.
As of early January, half of the United Kingdom’s universities had committed to divestment from fossil fuel interests. This includes 78 of the UK’s 154 public universities. The total list now includes the University of Glasgow, SOAS, University College London, and the universities of York, Liverpool and Exeter.
The list of colleges and universities that support divestment in other parts of the world is also growing. So far, Harvard has been preceded by Victoria University and the University of Otago in New Zealand, and Chalmers University of Technology in Sweden. Here in the United States, the New School, Humboldt State University, Lewis and Clark College, and the University of Massachusetts, among many others, have adopted positions of divestment, as has the University of California system, which in September 2019 stated it will divest its $83 billion in endowment and pension funds from the fossil fuel industry, citing the “financial risk” the university’s leaders now perceive in relation to this financial sector.
These commitments to divestment are shared by several medical bodies—I’ll note the Royal College of General Practitioners, the Royal College of Emergency Medicine, the British Psychological Society, the British Medical Association, the Canadian Medical Association, the Royal Australasian College of Physicians, the American Medical Association, and the Massachusetts Medical Society.
There has also been a groundswell of support for divestment from major philanthropic and religious organizations. These include the Rockefeller Brothers Fund, Union Theological Seminary, and, for some of its investments, the Church of England. Most recently, and revealingly, the Rockefeller Foundation, one of the nation’s oldest philanthropies, which was founded by oil baron John D. Rockefeller in 1913, has stated that it plans to divest from fossil fuels and intensify its investments in sustainable energy by the end of 2020.
And last, but definitely not least among the entities that have divested from fossil fuel, I give you the entire Republic of Ireland, which voted in 2018 to withdraw all public funds from such investments.
I draw your attention, as well, to another recent development, this one somewhat nearer to Harvard. A group of alumni organized under the name Harvard Forward has succeeded in nominating a slate of five candidates to the Board of Overseers. These five alums are committed to robust and fast action in relation to the climate crisis; their platform includes “Complete and swift Divestment of all University assets from fossil fuels.” To formally nominate these candidates for election, Harvard Forward were required to produce a minimum of 2,936 signatures petitioning for their inclusion. In fact, by the deadline on February 1st, this Sunday, they had secured somewhere around 4,800 signatures.
Finally, I’ll note two recent statements about divestment from two quite different communities of knowledge. On January 21st, a research article in the Proceedings of the National Academy of Sciences stated that “achieving a rapid global decarbonization to stabilize the climate critically depends on activating contagious and fast-spreading processes of social and technological change within the next few years.” These processes, the authors specified, include “divesting from assets linked to fossil fuels.” The scientists’ thoughts about that are remarkably mirrored by a perhaps unlikely ally, Jim Cramer, host of the “Mad Money” program on CNBC. I cannot claim familiarity with Mr. Cramer’s entire oeuvre, but I note that, just this past Friday, he declared he was done with fossil fuel stocks. Addressing specifically the fact that shares of Chevron and Exxon had fallen in early trading on Friday, Cramer claimed that this was connected to what he characterized as “divestment all over the world.” He went on to state that fossil fuels were in what he called “death knell phase,” adding “they’re tobacco. I think they’re tobacco.”
Tobacco: by this, Cramer means a commodity perceived as too ethically compromised to have a future as a viable investment. And so it is indeed becoming the case with fossil fuels, as the divestment examples of multiple educational, medical, religious, philanthropic, and governmental entities have been demonstrating, now with increasing frequency and urgency. I firmly request colleagues here at Harvard to support the motion presented today, at what is now a late moment in the divestment movement, but one at which Harvard could still present itself as a leader, not simply a follower.
FAS Faculty Meeting Statement by Stephen A. Marglin
My name is Steve Marglin. I am not quite a contemporary of John Harvard, but I have been at Harvard, man and boy, since the fall of 1955, and have taught in the economics department—and despite the economics department—since 1965. I have seen many changes here, most of them for the better. But “we don’t do political” when it comes to the endowment has been an unchanging mantra of the Corporation and the many presidents under whom I have served.
Alas, we can’t avoid doing political. There’s an old union-organizing song that’s relevant here, the chorus goes “Which side are you on, which side are you on?”
Maybe at some point it was possible for the university to avoid choosing sides in its investments. Maybe before slavery became a political issue, and Harvard’s portfolio included insurance companies that wrote policies on the lives of slaves. Maybe before the anti-apartheid movement convulsed South Africa. Maybe before the fossil-fuel industry doubled down on its investments in to develop even more fossil fuels.
Maybe then, but not now. As Professor [Nicholas] Watson said, the IPAA (Independent Petroleum Association of America) has put Harvard front and center in pushing its case against divestment. Google https://divestmentfacts.com/tag/harvard/and you will find that we are the poster child for the anti-divestment lobby. The headline is “Rebuffing Divestment, Harvard Reiterates Opposition, Seeks Out Real Solutions Instead.”
Whatever we do, however we vote on the motion before us, we are doing political. Do we line up with the IPAA or the IPCC?
During his long tenure as President, Derek Bok consistently opposed divestment of the endowment’s stock in companies doing business in South Africa. But he did allow in 1984 for exceptions:
The University may occasionally sell the stock of a corporation because of a disagreement with its policies. Such action, however, is not taken to pressure the company into conforming with Harvard's views but occurs because the University does not wish to continue an association with a firm that fails to live up to minimum ethical standards and offers no reasonable prospect of doing so in the future.
I submit to you that the fossil-fuel industry as a whole fits the bill of corporations that even under Derek Bok’s stringent criteria would be prime candidates for divestment.
Those of us urging divestment and decarbonization of the endowment are sometimes accused of hypocrisy in consuming the products of companies we would ban from the endowment. If we use Shell gas, we compromise our moral claim that Royal Dutch Shell has no place in our portfolio. If we fly on American Airlines, on what moral basis can we refuse to hold American Airlines shares? The truth is different and involves no hypocrisy. We are not proposing divestment because ExxonMobil and its ilk produce fossil fuels, but because these companies plan to produce fossil fuels until the last drop of oil is squeezed from the ground. ExxonMobil has upped the ante: in 2014, it was projecting that over 75 percent of the world’s energy would come from fossil fuels in 2040, in its most recent projections, the 2040 percentage for fossil fuels is 80 percent.
If the President and Fellows take our motion on board, the worst offenders will be eliminated from the endowment and all investments will be scrutinized for their carbon footprint and what these companies are doing to reduce that footprint. This is the future of responsible investing.
The question before us today is whether this faculty supports divestment and decarbonization now, when we can possibly influence others to follow our lead, or we wait, as we did in the case of South Africa, until nobody cares. We are voting on divestment and decarbonization, but we are also voting on the honor of this university. I urge you to vote for the motion.
