Harvard University will not divest of its endowment holdings in the fossil fuel industry, said a statement issued Thursday by Drew Faust, the president. She wrote that she and board members did not consider such a move to be "warranted or wise."
The push for colleges to divest of such holdings has attracted considerable attention in the last year or so, but most of the institutions that have announced plans to divest have relatively small endowments and do not depend on them for their finances. Harvard has the world's largest endowment.
In her statement, Faust questioned the concept of using endowments for political reasons. "Harvard is an academic institution," she wrote. "It exists to serve an academic mission — to carry out the best possible programs of education and research. We hold our endowment funds in trust to advance that mission, which is the university’s distinctive way of serving society. The funds in the endowment have been given to us by generous benefactors over many years to advance academic aims, not to serve other purposes, however worthy. As such, we maintain a strong presumption against divesting investment assets for reasons unrelated to the endowment’s financial strength and its ability to advance our academic goals."
Many supporters of divestment have argued that universities could restrict their holdings without suffering economic losses. Unity College, the first to divest, has reported no financial loss as a result. But Unity's endowment tops $13 million while Harvard's tops $30 billion.
In her statement, Faust expresses doubt that divestment could be accomplished without a financial price. "We should also be clear-sighted about the risks that divestment could pose to the endowment’s capacity to propel our important research and teaching mission," she wrote. "Significantly constraining investment options risks significantly constraining investment returns. The endowment provides more than one-third of the funds we expend on university activities each year. Its strength and growth are crucial to our institutional ambitions... Despite some assertions to the contrary, logic and experience indicate that barring investments in a major, integral sector of the global economy would — especially for a large endowment reliant on sophisticated investment techniques, pooled funds, and broad diversification — come at a substantial economic cost."
In her statement, Faust -- in language similar used by presidents of other colleges that have faced demands from student groups to divest -- praised students for raising these issues. But she also suggested that divestment may be hypocritical.
"I also find 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," Faust wrote. "Given our pervasive dependence on these companies for the energy to heat and light our buildings, to fuel our transportation, and to run our computers and appliances, it is hard for me to reconcile that reliance with a refusal to countenance any relationship with these companies through our investments."
Bill McKibben, a Harvard graduate and founder of 350.org, a pro-divestment group, issued a statement that said: "It took Harvard five years to figure out it didn't want to be involved with apartheid in South Africa; one hopes that the efforts of students, faculty, and alumni mean this will happen more quickly."
Daniel Kessler, a spokesman for the group, asked about Faust's statement that divestment is inconsistent with the way students and faculty members use energy, said via e-mail: "We are seeking change in the world we live in, not the one we seek to create."