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September 10, 2021

Harvard President Issues Progress Report on Net-Zero Commitments, No Divestment Announcement

Yesterday’s announcement from President Bacow provides little new information that wasn’t already disclosed by Harvard’s administration and investment portfolio managers. Harvard announced its net-zero strategy last year, indicating that its investment portfolio would be drastically changing in the near future.

Nonetheless, President Bacow’s letter is by no means a divestment commitment. In fact, President Bacow notes that Harvard will continue to participate in legacy limited partnerships which have indirect assets in the fossil fuel industry:

“HMC has legacy investments as a limited partner in a number of private equity funds with holdings in the fossil fuel industry. These indirect investments constitute less than two percent of the endowment, a number that continues to decline.”

If we are going to read between the lines, this simply means that Harvard is going to wait until these partnerships expire—they are not severing any ties or removing fossil assets from their current investment portfolio.

Moreover, this letter is merely an update to the status of Harvard’s investment transition which Harvard announced earlier this year. The energy industry remains committed to investing in research and development of technologies like carbon capture, utilization, and storage, which will help us achieve lower carbon emissions—there is no doubt about that. President Bacow’s letter does not state the university is severing its financial and institutional stakes with industry partners. This small caveat is important to note, and this letter is certainly by no means a divestment announcement.

Harvard had already reported its fossil fuel assets were less than 2 percent

Back in February 2021, the group tasked with overseeing Harvard’s endowment and financial assets otherwise known as the Harvard Management Company (HMC) presented its first Climate Report. The report came after consistent pressure by the university community to respond to its calls for divestment. Nonetheless, the university decided to disclose how much of its investment portfolio consisted of fossil energy:

“[HMC] reduced its overall exposure to fossil fuels—including both direct commodity investments as well as indirect investments in companies that explore for or develop further reserves of fossil fuels held through dedicated externally managed funds—from approximately 11 percent of the portfolio at the end of fiscal year 2008 to less than 2 percent at the end of fiscal year 2020.”

President Bacow himself acknowledges this in the letter:

“As we reported last June, HMC has no direct investments in companies that explore for or develop further reserves of fossil fuels.”

Ivy League faculty continue to oppose divestment

Even at one of the most prominent progressive bubbles in higher education, some faculty remain opposed to the effectiveness of divestment and actual impact on the climate. Last week a veteran ESG professor Cary Kroninsky, who teaches sustainable finance at Yale and Brown, spoke with media last week on how fund managers should focus on investing in projects that solve for climate change and reducing carbon emissions as opposed to divestment:

“I get very upset about the divestment movement because it doesn’t solve the climate problem. These companies don’t disappear because a handful of people decide not to own [them],’ he said. ‘It has been a waste of time, energy and resources. Nothing has actually changed Exxon Mobil or BP; these companies really haven’t changed for all the arm waving about climate change that fund managers do.”

President Bacow’s letter addresses recent climate-related natural disasters, not a specific investment decision

More or less, President Bacow’s letter to the Harvard community is a broad statement regarding recent natural disasters and a referendum of the University’s commitment to find climate solutions:

“The last several months have laid at our feet undeniable evidence of the world to come—massive fires that consume entire towns, unprecedented flooding that inundates major urban areas, record heat waves and drought that devastate food supplies and increase water scarcity.”

If anything, Bacow’s letter is a general update on everything climate related, following the University’s Net Zero pledge back in 2020. It does not provide any new details of a shift in the school’s investment strategy.

Harvard continues to reject divestment

Out of all the Ivy League institutions, Harvard has a track record of being the most outspoken against divestment and being affiliated with, or participating in the politically driven movement. We’ve written extensively about Harvard’s position on the matter in the past. But this time we want to point out a statement directly from Harvard Management Company (HMC) which argued that the University’s decision was certainly not divestment:

“Harvard’s commitment to transition its endowment to net-zero GHG emissions by 2050 transcends the binary divestment debate by focusing on portfolio management—on both the supply and demand side of a fossil fuel-reliant economy—with a clear, intentional effect.”


President Bacow’s letter to the Harvard community was far from any commitment to divestment the university’s investments from the fossil energy industry. For years Harvard has stood firm in its position on divestment and continues to dissociate itself with the politically driven social movement for the sake of the university’s global reputation as a leader of secondary education. Harvard continues to deliver on its net-zero commitments announced previously. We’re going to keep calling it like we see it—and this is by no means a divestment announcement.


For media inquiries, please contact Matt Dempsey at [email protected]