Harvard Discloses Fossil Fuel Investments, Reveals Serious Shortcomings in Net-Zero Plan

Report takes steps in the right direction, while leaving serious gaps that undermine commitments

Fossil Fuel Divest Harvard is a student campaign that believes that when the planet’s on fire, it’s wrong to support the arsonists.
  • Lack of scientific alignment: The report professes a desire to align Harvard’s investment portfolio with science “by taking into account the best available scientific knowledge, using standards set by the United Nations Intergovernmental Panel on Climate Change (IPCC).” The IPCC’s 2018 Special Report lays out two distinct pathways to 1.5 degrees C (which the report unambiguously lays out should be the maximum allowable temperature rise). One pathway requires global carbon reductions of 50% by 2030 and net-zero 2050, leaving humanity with a 50% chance of keeping temperature rise below 1.5 degrees C. The other pathway requires net-zero pollution by 2040 in order to attain a two-thirds chance of avoiding 1.5 degrees C temperature rise. Harvard offers no explanation or defense as to how a 50–50 chance is more aligned with the best available scientific knowledge than a two-thirds chance. Worse, by failing to set any interim goals whatsoever, Harvard’s plan is not in line with even the more dangerous pathway. Peer institutions, on the other hand, have committed to far more robust and immediate net-zero goals. So long as Harvard omits interim benchmarks from its greenhouse gas reductions commitments and treats 2050 as an aspirational goal rather than a last-case scenario, it cannot claim to be in line with the science.
  • Refusal to ensure impactful proxy voting: In its rhetoric, Harvard has shifted from claiming no responsibility for external managers to acknowledging their importance in terms of carbon impact. But in its policy, the report reaffirms Harvard’s hands-off approach to the people managing its money. While shareholder engagement with the fossil fuel industry has proven an ineffective strategy, shareholder engagement with other industries (those whose business models are more compatible with climate action) can be an important part of a decarbonization strategy. Unfortunately, Harvard has given up the ability to lead on this front. Harvard does not require third-party external managers of the endowment to follow any environmental, social, or governance proxy guidelines it sets, making them largely meaningless, given that a vast majority of the endowment is under such managers’ control. This is in contrast to several top peer institutions, which have extended shifts in climate investment policy to include indirect investments. Moreover, the proxy guidelines that Harvard does have are deeply flawed and prevent the use of proxy votes to seriously advance climate action.
  • Incomplete carbon accounting methods: Harvard’s pledges to seek endowment-wide decarbonization are important. But the report reveals that Harvard has made use of flawed carbon accounting mechanisms to measure progress towards this goal. For example, Harvard writes that it plans to record portfolios’ “carbon intensity.” It’s no wonder why such a measure is a favorite of fossil fuel industry interests: It’s a very gameable metric, since carbon intensity can decrease even as net carbon emissions (the relevant metric when it comes to hopes of preserving a livable future) increases. Moreover, the fact that Harvard is calculating mostly at the portfolio rather than the company level allows the companies and industries with outsize emissions to hide in the aggregate. Finally, Harvard has not ruled out the possibility of heavy carbon offset use to achieve these goals, making it unclear whether they plan to meaningfully decarbonize their portfolio or just offload environmental responsibility onto others.
  • Reliance on engagement: The report continues to endorse the dangerous and disproven view that shareholder engagement will convince fossil fuel companies to change their ways. Harvard itself has admitted that shareholder engagement is not an appropriate tool for changing a company’s core business model, so it’s a mystery why they expect it to effectively change the fossil fuel industry, whose decades of attacking Harvard faculty, undermining scientific consensus, and lobbying against meaningful climate action make clear that they’re no partner in change. A number of the examples the report cites as proof of shareholder engagement’s efficacy, moreover, are in reality loophole-ridden and flawed commitments. No major fossil fuel company has Paris-compliant carbon reduction plans — continued investment in such companies directly undermines stated commitments to decarbonize.

We call upon Harvard to #divest its endowment from fossil fuel companies and reinvest responsibly.