Harvard University students and faculty tried in vain to convince the Harvard Corporation (which oversees one of the largest university endowment funds in the country) to divest from any and all firms involved in fossil fuel development.
Their letters and relatively bland sit-ins failed, as Harvard revealed that it actually increased investments in energy companies during Q4 of 2014. (Interestingly, Harvard put nearly $58 million into Anadarko Petroleum, who’s former CEO is now a student at Harvard Divinity School).
Harvard President Drew Faust responded to these energy divestment demands by explaining that Harvard, like all modern enterprises, needs energy from coal, oil, and natural gas to heat and cool the buildings; transport goods; and keep electricity flowing to all the laptop computers, lights, cell phone chargers, and televisions in dorm rooms. There is, she explained, “a troubling inconsistency in the notion that, as an investor, we should boycott a whole class of companies at the same time that, as individuals and as a community, we are extensively relying on those companies’ products and services for so much of what we do every day.” Basically, what’s the point in changing Harvard’s investment strategy when Harvard itself is a major consumer of these products?
When faced with similar questions of divestment, Princeton University President Christopher Eisgruber explained that, “it would be a profound mistake to create an investment policy that took political stands regarding the business activities of energy companies.” In other words – divestment is a form of political speech and Princeton isn’t prepared to take a political stance against energy companies. Princeton’s endowment is interested in making money, and taking a political stance on this issue would alienate donors to that fund.
Faust’s argument boils down to the fact that divestment is hypocritical and pointless since Harvard is consuming so much fossil fuel energy. But Eisgruber takes it a step further and says that he doesn’t care about the politics because divestment is a bad business decision.
Stanford, Georgetown, and Oxford all recently announced their intentions to divest from coal companies, but, as it turns out, their stakes in coal companies were already minimal or none. Funny how those institutions that readily agreed with the political movement’s ideological stance never had much financial stake in coal corporations to begin with. Their political statement wasn’t a political statement at all but just lip service to the current campus climate.
For universities like Harvard and Princeton, which do seem to have significant investments in fossil fuel companies (university investments are not public knowledge but some institutions do release some information) divestment actually IS a political tool, and one they do not want to use. If an institution is essentially uninvolved in coal, like Stanford, Oxford, and Georgetown, then it’s easy to pacify everyone involved, but both Harvard and Princeton make very salient points. We can demonize fossil fuels, but the reality is that we rely on them now and will continue to rely on them for a very long time. For those whose business it is to invest, it is bad business not to invest in such a major and vital industry.