Harvard University President Drew Faust released a letter stating her and the Harvard Management Company’s opposition to divestment from the fossil fuel industry. Although this is not the first time she, the administration, or the HMC have expressed doubts about divestment, this letter stands apart for its fuzzy logic and dubious intentions.
To her credit, Faust made one argument that is at least worth engaging. She argued that Harvard would have more influence over the practices of large fossil fuel companies as a shareholder than a principled outsider. Although the Divest Harvard campaign has done a good job of refuting this claim, if Harvard actually showed a willingness to use this shareholder power, Faust could have a point.
But on virtually every other count the letter was nonsensical. First, Faust insists that she and the University view climate change as a social ill that needs to be addressed. But she then says that Harvard’s investments should be used solely as “a resource, not an instrument to impel social or political change.” She says she fears making Harvard appear to be a “political actor rather than an academic institution.” Instead, she claims that Harvard can best address climate change by investing in research that advances climate science and public policy. So she has made a claim about the social role of a university: the advancement of knowledge. The endowment funds that advancement and, in her view, should do nothing else.
Yet she then broadens her conception of Harvard’s social role as an institution, and as an investor specifically, to include encouraging fossil fuel companies to be “positive force[s] both in meeting society’s long-term energy needs while addressing pressing environmental imperatives.” She asserts, as noted above, that shareholder resolutions would be more effective than divestment in leveraging Harvard’s power to address climate change. But how is this action less “political” than divestment itself? Both involve using economic resources to pressure fossil fuel companies toward greater social ends. Both mean convincing corporations to reevaluate their business practices in light of these pressures. If there is a relevant distinction, not just a difference in scale, between a shareholder resolution and divestment as the use of the endowment for “social or political change,” Faust does not make it.
Next, she touts the HMC’s new appointment of a “vice president for sustainable investing.” Faust says this vice president will help the HMC “achieve superior investment returns as it fulfills a university’s distinctive responsibilities to society,” bringing into consideration “environmental, social, and governance factors.” But if, as Faust asserts above, the only role of the university on climate change is to advance climate science and policy, and the best way to do that is to have the largest endowment possible, then why have this position at all? What are the university’s “distinctive responsibilities to society” that are not encompassed by “superior investment returns?” Faust gives no answer to this question. And she leaves us wondering whether this appointment was merely a pittance to appease student demands rather than a principled statement on the social role of a university—because she in fact gives two contradictory statements of that principle.
One need know very little about the merits of divestment to question the motivation behind this letter. Indeed, it reads more like a politician’s press release than a thoughtful statement from an intellectual to her intellectual community.
I look forward to seeing how Divest Harvard responds.