August 25, 2020

What You Should Know about Harvard Forward’s Impact on Board of Overseers

After a months-long advocacy campaign, Harvard Forward, a controversial anti-fossil fuel coalition has secured three seats on Harvard’s Board of Overseers, raising the possibility that activists will try to subvert the independence of the school’s investment strategy and force the school to halt all investments in fossil fuels—or potentially even mutual funds holding fossil fuel stocks.

Harvard Forward’s campaign, which raised concerns over how the group may exert its newfound influence on the direction of the University’s future investment policy, is the latest effort at Harvard to halt all fossil fuel-related investments.

Historically, the Overseers have not exercised authority over Harvard’s investments. As noted by several news stories, the impact expected on the University’s endowment is limited. The governing body is responsible for “providing counsel to the University leadership on priorities and plans”, not making decisions over how assets are managed, However, Harvard Forward has shown signs of wanting to change that.

Here are three things you need to know about Harvard Forward’s campaign and goals:

Harvard Forward’s pro-divestment politics undermine the autonomy of the Board.

The pro-divestment coalition was created to stack the Board of Overseers with comparatively young graduates with established climate bona fides  in order to wield influence over the university body. Although the group won via an open voting process, its single-issue focus offsets Overseers’ neutrality and threatens to politicize internal discussions.

For instance, the Harvard Alumni Association (HAA), the leading student body, which traditionally proposes candidates for the Overseers position, has challenged Harvard Forward’s single-minded vision:

“Rather than pushing their own single-issue or multi-issue agendas, special interests, or political viewpoints, and forcing Harvard to do what they think is best, Overseers are tasked with helping the University arrive at better outcomes by asking powerful, insightful questions and by considering a long-term, strategic vision for Harvard.”

Harvard President Lawrence S. Bacow and his predecessors have agreed, repeatedly stressing that the endowment should not be used for political purposes.

Harvard Forward intends to exert direct influence over Harvard’s investment strategy.

Overseers have no control over investment decisions or the university’s endowment. The Harvard Alumni Association noted that Overseers “do not have direct influence over the fiduciary, investment, and/or divestment decisions of the University”. Yet, Harvard Forward thinks otherwise. The group launched and coordinated an aggressive campaign to secure seats on the Board of Overseers, leveraging its influence in also electing new members to the Corporation, the government body in charge of fiduciary responsibilities.

By doing so, Harvard Forward is not only challenging the powers and responsibilities of the Overseers; It wishes to wield Overseers’ influence over an area beyond their responsibility, by voting in favor or against those that agree or disagree with their views. In essence, they want to judge investment decisions by political, rather than financial metrics, a strategy which is likely to threaten the school’s investment returns.

Universities have autonomous and specialized bodies responsible for the management of their endowments to guarantee that asset allocation is managed efficiently by financial experts.

Presuming to exert influence over the University’s endowment only plays against the autonomy and efficacy of the investment policy.

Harvard Forward has ties to broader anti-fossil fuel activism.

 Harvard Forward was incubated and groomed by several prominent climate activists, including leading pro-divestment figure Bill McKibben, who has even featured one of the recently elected Harvard Forward Overseers in his weekly editorial column for The New Yorker, defending the group’s divestment efforts and overall strategy.

HAA members have also noted the coalition’s anti-fossil fuel background, identifying this as a threat, again, to the Overseers’ role:

“All five petition candidates have been placed on the ballot through the efforts and support of a group which is focused on influencing the asset allocation decisions of Harvard’s endowment management team and forcing the University to divest from fossil fuel companies”.

Harvard Forward’s vision and goals, closely shaped by and aligned with divestment, an empty political gesture, erodes engagement and limits dialogue with the energy industry to address climate change concerns.

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Asset managers always say that the smartest and most efficient way to keep a healthy investment portfolio is through diversification. Fixating on divestment as the primary goal of a university’s investment strategies threatens both investment returns and opportunities to engage with companies directly. Harvard Forward’s vision and strategy is not only restrictive in considering other more impactful actions, it is also worrisome as it poses a direct threat to the independence and autonomy of the University’s asset management institutions.