After years of pressure from activists — from law students protesting fossil-fuel investing companies like Exxon (NASDAQ:XOM) to others interrupting college football games to command attention of the issue — Harvard will divest from fossil fuels.
What Happened: University President Lawrence Bacow announced in an open letter that “legacy investments” in fossil fuels would runoff and that investments in unclean energy were imprudent.
The university president did not provide a timeline for the phasing out of fossil fuel investments.
The Harvard Management Company, which oversees the university’s endowment, will aim to have investments that maintain a net-zero carbon footprint by 2050.
Why It Matters: Harvard is the richest university in the world, with an endowment of about $42 billion, and it has an incredible amount of cultural influence both domestically and globally.
Therefore, its financial decisions matter. What’s more, Harvard is now becoming part of a larger trend of other universities, including the University of California, Cambridge and Oxford, and other corporations and financial institutions pledging to move completely away from fossil fuel investments.
What Else: As many are rejoicing the decision, one environmental activist and New Yorker staff writer, Bill McKibben, made the point that the world of finance is moving closer to non-carbon alternatives.
As he noted in his blog, “Had Harvard divested when we first asked, they’d have even more money than they do now (the endowment is worth $40 billion, give or take).”
Photo: Pascal Bernardon.
