Clean Yield Asset Management released this statement during Harvard Heat Week, a series of events in April 2015 bringing together members of the Harvard community to “speak out for climate justice, learn from one another, and take principled action.”
The reality of climate change is no longer subject to debate. The new normal includes rising sea levels, record droughts, rising global temperatures, diminishing snow packs, more frequent extreme weather events, loss of biodiversity and more alarming trends. The world’s leading scientists have made it clear that human beings must find a way to leave up to 80% of the world’s fossil fuel reserves underground or face great peril, even to the point of extinction.
Transitioning to a low-carbon future will require a great number of things, among them, visionary public policies, lifestyle changes, technological innovation, and a massive reinvestment of capital toward renewable and low-carbon fuel sources and the infrastructure to support them. Institutional investors, including endowments and universities, must not only rise to this challenge but lead the way, for without their expertise and capital, the nonnegotiable transition to an economy energized by cleaner fuels and technologies may not happen fast enough to forestall an intolerable rise in global temperatures.
Clean Yield Asset Management stands in support of Divest Harvard, 350.org, Harvard Faculty for Divestment and other members of the Harvard community in their call on the university to freeze new investments in fossil fuel companies and gradually divest its current holdings from them.
As a company with extensive experience in engaging with fossil fuel companies, we have concluded that years of shareholder advocacy with this sector has yielded little in the way of results and offers little hope for the future. The fossil fuel industry has refused requests by shareholders for more than 20 years to set meaningful limits on its exploration, extraction, and emissions. Like the tobacco industry, from which Harvard divested its holdings in the 1990s, fossil fuel companies have proven themselves to be impervious to attempts to divert them from their core business. Engagement stands little chance of persuading them to alter their destructive course within the urgent time frame that they must act. Should Harvard pursue a path of engagement, we believe it should do so with eyes wide open and the least number of shares required to do so.
Whether or not Harvard chooses to engage with fossil fuel companies, if it does not substantially divest, the University will still be left grappling with the uncomfortable fact that its endowment is both financing and profiting from the industry with the greatest vested interest in slowing the transition to a low-carbon economy.
Divestment and reinvestment offer the more promising path toward making the University’s endowment policy consistent with its leadership in so many other efforts to combat climate change. We commend and stand by those members of the Harvard community in their pursuit of this goal.Tags: Climate Change, Fossil Fuel Divestment, Harvard University, shareholder advocacy