Sustainability is in session… Harvard announced it’s officially ending investment ties to fossil fuels after years of pressure from students, staff, and climate activists. Harvard’s $42B endowment fund is the largest of any school in the US — and is bigger than roughly half of the world’s economies.
- 179 to 20: # of Harvard faculty who voted for and against fossil fuel divestment.
- <2%: Harvard had already ended direct investment in companies that extract fossil fuels, but a tiny percentage was still indirectly invested — now, Harvard’s letting those “runoff.”
ESG Domino Effect… While the sustainability movement appeals to a wide range of people, younger generations have been among the most vocal supporters. During a Harvard vs. Yale football game, 200+ students stormed the field to protest the school’s fossil fuel investments. This year, a student activist group filed an official complaint with the state’s Attorney General. Dominos are falling:
- 2020: The University of California became the largest college to go fossil fuel free.
- -90%: How much Stanford has reduced its fossil fuel investments since 2011.
Institutions may have to go green to get peace... Harvard’s landmark decision is yet another example of ESG investing's momentum (Environmental, Social, and Governance). As Millennials and Gen Z are expected to inherit $61T over the next 20 years, companies will need to attract their investment bucks. For higher education, ESG may be one way of satisfying climate conscious students while setting the stage for a new wave of endowments.