For a number of years now, students at Harvard University have been holding regular protests where they called on the school to fully divest its massive endowment (the largest of any university in the world) of any and all investments in fossil fuels. For at least the past decade, the school has agreed to “consider” the demands, but in the end, they always ended up refusing. But this week the administration appeared to do a complete 180-degree reversal and put out a statement almost saying that they had done just that. Or at least they came close to it. They didn’t actually use the word “divest” or any version of it. And they aren’t entirely out of the game in terms of investments in energy companies dealing with fossil fuels yet, but they promise they will be at some point. (Boston Globe)
For nearly a decade, Harvard University has been the target of sit-ins, protests, and petitions, even resounding votes from its faculty, all calling for the university to divest its massive endowment of investments in fossil fuels.
But year after year, the university resisted, claiming, among other things, that it did not want to use its endowment as a political tool. Then suddenly, on Thursday afternoon, it changed course.
In a letter to students and faculty that did not use the word “divestment,” Harvard president Lawrence Bacow disclosed the $41 billion endowment has effectively divested its fossil fuel holdings.
“We must act now as citizens, as scholars, and as an institution to address this crisis on as many fronts as we have at our disposal,” Bacow wrote.
The reason that Harvard isn’t actually divested in full is that they still have holdings in mutual funds that include oil and gas industry stocks in their portfolios. They do that because those stocks reliably produce solid returns. Harvard claims those investments are in “run-off mode” and will eventually be gone, but no timetable was offered as to when that would happen. They could have just dropped out of those funds if they were really dedicated to the proposition, right? But that would have cost them something on the bottom line, so you can only be just so virtuous, I suppose.
I’m sure it’s just a coincidence that Harvard decided to go along with the demands of the environmentalists during a period when oil stock prices have been steadily declining over supply chain concerns under the Biden administration. But don’t let that inconvenient fact bother you.
Previous attempts at forcing Harvard to divest failed just as they had at so many other colleges and universities. We saw it at Stanford. The same thing happened at Cambridge. And the University of Denver. The list goes on.
The reasons were generally always the same. Those massive endowment funds are managed by people who handle investments of that size for a living. They’re not stupid. Oil and gas industry stocks have historically been some of the most profitable, delivering significant returns. Complicating the issue is the fact that those same companies also fund a lot of research and provide grants to schools. If you publicly insult them and divest from their stock, their generosity might not be assured the following year.
The ironic part of all this is that these actions, such as they are, will be seen as completely symbolic by anyone who is paying attention. You’re not going to hurt the oil companies by letting somebody else buy the shares of stock that you were holding. It’s not going to impact Chevron’s bottom line.
Now if they really wanted to demonstrate how dedicated they are to this noble cause, they should shut off the gas-powered heaters on the campus this winter. When all of the dedicated students show up for class with their teeth chattering, the brilliant light of their virtue signaling will no doubt keep them warm. Or they could hand out extra sweaters to everyone, provided the wool came from farms that run entirely on renewable energy and sheep that don’t fart, adding methane to the atmosphere. Good luck with that.
