A fun (read: terrible) thing about the fossil fuel industry is that it's so wrapped up in the financial structure of the world that most of our money is, by default, stained by blood-oil. That "black gold" was a smart early investment bet for those who got in on it, particularly as industrialization grew around the world. At this point, so much of our international infrastructure is reliant on fossil fuels in some way that it generally remains a lucrative investment … for your bank account, that is, although less so for the future stability of human civilization on the planet Earth.
This is all to say that while I certainly wish that more individuals and massive financial institutions alike would stop investing in fossil fuels, I understand that it's difficult and unlikely. Even if your bank or financial manager agrees not to invest in Exxon-Mobil, for example, they may still be putting your money towards something else that's too entangled with those lucrative liquid dinosaur bones, so your money still can't escape the taint.
But to my surprise — and after much, much public pressure — Harvard University is actually fucking doing it. University President Lawrence Bacow just published a letter to the Harvard community disclosing that the oldest institution of higher learning in the United States has already separated most of its $41 billion dollar investments away from direct investments in the fossil fuel industry, and is in "runoff mode" with the remaining 2 percent of funds that indirectly support that industry.
For some time now, Harvard Management Company (HMC) has been reducing its exposure to fossil fuels. As we reported last June, HMC has no direct investments in companies that explore for or develop further reserves of fossil fuels. Moreover, HMC does not intend to make such investments in the future. Given the need to decarbonize the economy and our responsibility as fiduciaries to make long-term investment decisions that support our teaching and research mission, we do not believe such investments are prudent.
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. HMC has not made any new commitments to these limited partnerships since 2019 and has no intention to do so going forward. These legacy investments are in runoff mode and will end as these partnerships are liquidated.
HMC is building a portfolio of investments in funds that support the transition to a green economy.
In the letter, President Bacow explicitly links this decision to the recent IPCC report on climate change, and says that the university plans to achieve carbon neutrality by the end of June 2022.
Your move, Every Other Person Or Institution With Significant Capital Who Continues To Enable The Destructive Capitalism of The Fossil Fuel Industry.
Image: Joseph Williams / Wikimedia Commons (CC-BY-SA 2.0)