PRESS RELEASE: 375 Donors support RI@Harvard

The Responsible Investment at Harvard Coalition released the following press release this morning:

FOR IMMEDIATE RELEASE:

375+ Harvard donors petition University to invest responsibly

Contact: Sam Wohns at info@responsibleharvard.com and 616-334-8343

April 29, 2012—Harvard University in Cambridge, MA

The Responsible Investment at Harvard Coalition (RI@Harvard) announced on Monday that its Fair Harvard Fund has received donations from over 375 student, alumni, and faculty donors since the Fund’s launch one month ago. The Fair Harvard Fund initiative aims to incentivize the Harvard Corporation to create a Social Choice Fund managed by the Harvard Management Company as part of the Harvard endowment, according to environmental, social, and governance criteria.

“It’s a major milestone, especially considering that we’re celebrating the 375th birthday of Harvard this year,” said organizer Jia Hui Lee, a senior at Harvard College. “This is the first step to achieving broader goals for socially responsible investment at Harvard.”

The Fair Harvard Fund, which now holds over $9,000, will be held in escrow until Harvard creates an acceptable Social Choice Fund within the endowment. If such a Social Choice Fund is not established by August 1, the Fair Harvard Fund will be managed by investment professionals according to ESG criteria set by the community.

The RI@Harvard Coalition already includes more than 25 organizations, collectively representing more than 7,000 students, faculty, and alumni of Harvard University.

“We hope to create a way for alumni donors to support Harvard without worrying about a disconnect between Harvard’s stated mission and its investment practices,” said former Undergraduate Council President Senan Ebrahim. “The creation of a Social Choice Fund would be welcomed by the Harvard community as a first step in the Harvard Management Company’s path towards greater mission alignment.”

The RI@Harvard Coalition is calling on the Harvard Management Company to better align its endowment investment practices with the stated values of Harvard University. While Harvard College’s mission statement urges its students “to assume responsibility for the consequences of personal actions…to advance knowledge, to promote understanding, and to serve society,” the HMC mission statement simply pledges to maximize returns in order to fund the operations of Harvard University, regardless of the cost in social harm.

The HMC has historically made ethically questionable investment decisions in pursuit of maximal returns, sometimes sparking student and alumni concern. In the 1970s, students and alumni called for divestment from apartheid South Africa; after years of controversy, Harvard partially divested. In 2005, students successfully called for divestment from PetroChina, which notoriously funded genocide in the Darfur region of Sudan. More recently, Harvard announced that it would not re-invest in HEI Hotels and Resorts after years of student protest about HEI’s labor practices. However, other than these isolated instances, the HMC has no policy of socially responsible investing. RI@Harvard hopes to catalyze Harvard’s transition into a more socially responsible, transparent, and accountable institutional investor.

With 375 donors, one for each year of Harvard history, the Fair Harvard Fund is on its way to realizing the establishment of a Social Choice Fund at Harvard. To learn more about the RI@Harvard Coalition, visit www.ResponsibleHarvard.com. To donate to the Fair Harvard Fund, visit www.FairHarvardFund.com.

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Global Policy Forum protests Harvard’s AgInvestment

Members of the Global Policy Forum, Oakland Institute, WhyHunger, and other organizations wrote an open letter to President Drew Faust in response to Harvard’s participation in the “Global AgInvesting 2012” conference last week.

Excepts from the letter are below. The authors write,

We were saddened to learn of the Harvard Management Company’s participation at the “Global AgInvesting 2012” conference held in New York City on April 23-25, 2012. This conference promotes the large scale acquisition of land by foreign investors, a dangerous practice known as “land grabbing” that is leading to record levels of hunger, rising food prices and environmental degradation.

The stated purpose of the conference, targeted at institutional investors, is to help participants understand the best strategies to invest in arable land and global agricultural trade and production… This outlook ignores the fact that, wherever land acquisition by foreign investors has taken place, these “land grabs” have led to displacement, loss of livelihood and often death in the communities affected.

The letter continues,

In spite of this record, investors are flocking to get their share of the global land grab. It is deeply troubling that an institution of Harvard’s stature would join in these destructive practices. Land grabbing deals achieve profitability at the expense of the wellbeing of millions of individuals. The organizers of “Global AgInvesting 2012” make clear that arable land provides high returns on investment because it is a finite resource submitted to increasing demand… High investment yields cannot justify investment decisions that lead to serious environmental damage and human rights violations. We urge Harvard to reconsider its institutional participation in agricultural land investments and to look for more just and sustainable ways to support its important educational and research missions.

The full text of the letter is available at this link: Open Letter to President Faust re: Global AgInvesting

HKS Student Government endorses RI@Harvard

Last night, the HKS Student Government voted to adopt the following motion:

Whereas  Harvard has a history of investing in ethically questionable activities, and the lack of transparency around Harvard’s investments makes it impossible for the community to know whether such investments exist today.

Whereas  The HKS endowment has been, and may currently be, invested in activities that are in direct conflict with the School’s mission to promote the public good. 

Whereas  Harvard should be proactive in incorporating responsible investment policies into its portfolio, rather than reacting to individual divestment campaigns on a case-by-case basis. 

Whereas  In October of 2011, a group of Harvard students, alumni, and community affiliates formed the coalition for Responsible Investment at Harvard with the intention of working with Harvard’s administration towards the promotion of more responsible investment practices for the University’s endowment.

Whereas This coalition has identified several recommendations for change, including:

(i)                 The integration of environmental, social, and governance (ESG) factors into all investment decisions, a move pursued by many large institutional investors, such as CalPERS;

(ii)                The expansion of the mandates of the Corporate Committee on Shareholder Responsibility (CCSR) and Advisory Committee on Shareholder Responsibility (ACSR) beyond proxy voting to include considering:

a) petitions for the submission of a shareholder resolution to a particular company, submitted by the Harvard community
b) petitions for divestment from a particular company, submitted by the Harvard community

(iii)               The establishment of a social choice fund to provide donors with the opportunity to invest their commitments in activities that have a high return to Harvard and to society as a whole.

Be it resolved that the HKS Student Government officially endorse the aforementioned list of recommendation.

Be it further resolved that the HKS Student Government circulate notice of this endorsement to the Harvard University President, Provost, the Deans, and the CEO of the Harvard Management Company.

Be it further resolved that the HKS Student Government engage with the Harvard administration to see these goals implemented.

From the Crimson: “Students and Administration Together”

Responsible Investment at Harvard Coalition member Felix de Rosen wrote an op-ed that appeared in today’s Crimson.

He writes about his membership on the Student-Faculty Advisory Committee on Shareholder Responsibility, noting,

Although the creation of the ACSR was an important step forward, the organization leaves a lot to be desired. First, the CCSR is not required to listen to the ACSR, making the ACSR purely symbolic. Second, and most importantly, the ACSR has no ability to initiate proxy proposals or to recommend that Harvard reconsider its investment in certain companies. The only reason the CCSR listened to the ACSR’s advice on PetroChina was that PetroChina had become a major public issue that Harvard could no longer ignore. Third, the ACSR has no way of communicating to either students or to the CCSR. This is why RI@Harvard’s objective to strengthen the ACSR is necessary.

He also urges students and administrators to work together to achieve goals, writing,

The future of responsible investment at Harvard depends on the ability of students and administrators to understand each others’ perspectives, which may be more nuanced than each group likes to think. On the one hand, the administration is genuinely concerned over the manner in which Harvard invests its money. It is not opposed to change, but understands that compromises are inevitable when working in a large organization… On the other hand, the students are a force committed to revising Harvard’s investment policy for the common good… The next step forward for RI@H is to join the shared experiences of the administration and the students. 

You can read the whole article online here.

 

From the Huffington Post: How Harvard is Ignoring the Failures of Our System

Martin Bourqui of the Responsible Endowments Coalition has a blog post up on the Huffington Post today entitled “How Harvard is Ignoring the Failures of Our System — and Why We Can’t Any Longer.” 

He writes about the Harvard Management Company’s pressure to drop Joshua Humphrey’s from last week’s UC Town Hall, noting,

the truth this fiasco exposes about Higher Education, Inc., and its attitude towards how to run an educational institution, must inform the work of creating the just and sustainable institutions our society needs.

He also writes, 

No shiny-new LEED-certified building, no Presidents’ Climate Commitment, and no US Newsranking will change the truth that all of our schools are investing in a wide variety of unsustainable and unjust corporate misdeeds. We can either continue to ignore the catastrophic failure of our system, or we can begin to address it like adults — ones with serious responsibilities to our environment and to each other.

You can read the entire article online at huffingtonpost.com.

The UC and the Fair Harvard Fund

At last night’s Undergraduate Council meeting, the UC voted nearly unanimously to endorse the Fair Harvard Fund. You can read the Crimson article here. From the article:

“This is a flagship initiative that has gained a lot of support on campus,” said former UC President Senan Ebrahim ’12, referring to the more than 90 students who sponsored the legislation. “Additional support from the UC would help with pushing this initiative further forward.”

UC President Danny P. Bicknell ’13 said he will send out information later this week in conjunction with Responsible Investment at Harvard detailing the fund’s future.

The Crimson endorses the Fair Harvard Fund

Read their staff editorial endorsing the Fair Harvard Fund and offering recommendations for its management here at thecrimson.com or below:

 

Funding Harvard More Fairly

Fair Harvard Fund is a commendable movement that should develop concretely

Once again, how Harvard manages its money is a target of attention, and deservedly so. Just last week, we commented in favor of Harvard’s pledge not to reinvest in HEI Hotels, a company widely alleged to have engaged in labor rights violations. At the same time, several students have begun the Fair Harvard Fund movement, which aims to make responsible investment a priority at Harvard. The main goal of this movement, which counts former undergraduate council president Senan Ebrahim ’12 as one of its founders, is the creation of a social choice fund to manage a portion of Harvard University’s endowment. Ideally, donors to Harvard would have the option of having their gifts managed by this particular fund, which would follow strict social, environmental, and governance criteria.

By incorporating a social choice fund into the management of our university’s endowment, the Harvard Management Company would send a positive signal to donors, the campus community, and the public at large. In order for this to be accomplished, the Fair Harvard Fund must continue its welcome presence on campus and work to see its goals develop concretely. Many institutions such as Brown University already have comparable options for their donors, and the market performances of such socially responsible funds have in fact been generally aligned with those of more traditional investment tools. By establishing a social choice fund, Harvard would likely be able to expand its endowment by attracting new inflows while simultaneously promoting ethically oriented business.

There are several steps that the Fair Harvard Fund could take to see its immediate objectives carried forward. To begin with, the students behind the movement have issued a statement endorsing a future town hall meeting, where the Harvard community could discuss the guidelines for socially responsible investment at our university. Although the intention of promoting “direct democracy” with a town hall meeting is certainly appealing, we should all be wary of using such  an open forum to determine the specific investment criteria of the Fair Harvard Fund. The term “social responsibility” is vague to start with, and the proposals generated from this kind of event might only complicate attempts to come up with a workable and ethical set of principles to act on. Instead, let us suggest an alternative: the social choice fund could follow the strict guidelines already set forth by the Responsible Endowments Coalition. These include a commitment to investing in companies that do not abuse their workers, as well as particular attention to ventures that uphold environmental sustainability. By employing both negative screening—refraining from investing in companies that are judged harmful to society—and positive screening—an active effort to boost businesses that advance environmental or welfare causes—the social choice fund could become an effective vehicle for tangible change in the local and wider community.

One of the current goals of the Fair Harvard Fund is to persuade the HMC to take over the administration of its assets. We urge the HMC to consider this proposal seriously, since there can only be benefits for both sides of the potential partnership, not to mention all who wish to see social choice investing become a reality at Harvard. On the one hand, by handing over its resources to the HMC, the Fair Harvard Fund would benefit from the supervision of established industry professionals. On the other hand, the HMC would have the opportunity to promote worthy causes alongside its continued management of the endowment at large, and presumably attract new donors who prioritize socially responsible investing.

As of today, the Fair Harvard Fund continues to solicit donations from members of the university community. With the constructive potential of its vision, the movement surely has a bright future. With the recent experience of HEI to serve as a reminder, we should all push for a Harvard where fairness is not merely option and an interest, but a priority.

The Crimson on the ACSR

Today’s editorial by The Crimson Staff calls for the administration to look closely at RI@Harvard’s demands and endorses our asks about the ACSR, while applauding the decision not to reinvest in HEI Hotels. Read the entire editorial, entitled “HEI Reconsidered,” below:

Last year, in light of numerous labor abuse allegations faced by HEI Hotels and Resorts, The Crimson urged the Harvard Management Corporation to investigate the charges against the company and consider not reinvesting in it. As of last week, Harvard has joined Yale, Princeton, Brown, and numerous other universities in deciding not to reinvest in HEI. By not reinvesting, Harvard does not liquidate its current investments in HEI, but rather makes a pledge to not provide the company with more capital in the future.

In light of the recurring allegations of labor abuse that HEI has been unable to refute successfully, Harvard has surely done the right thing in deciding not to reinvest and announcing publicly its decision. Workers at the company, most prominently those lobbying for union representation, have repeatedly complained of mistreatment. The activist organization Students Against Sweatshop Labor claimed in a report that the hotel chain cuts costs by reducing staff levels excessively and forcing remaining employees to work in unreasonable conditions. Shockingly, at one HEI property, 80 percent of housekeepers reported work-related injury. Just last week, workers at HEI-owned Le Meridien Hotel right here in Cambridge   publicly voiced discontent over their work conditions.

Although it is our belief that Harvard acted appropriately, the institutional process to arrive at this sort of measure could be significantly improved. The Corporation Committee on Shareholder Responsibility, the body within the HMC that considers the social ramifications of the university’s investments, is limited to proxy voting and has no influence over new or current investment decisions. Perhaps, if this group were not so limited in its power, Harvard would not have been among the last of its Ivy League peers to announce it would not reinvest in HEI. The Responsible Investment at Harvard movement has already called for a more efficient manner to reconsider investment decisions, and we urge the University to study its proposals carefully.

In addition, we find the University’s lack of transparency regarding the resolution of this matter to be both puzzling and unnecessary. Jane L. Mendillo, the president of the HMC, saidin an email to University President Drew G. Faust that the decision not to reinvest in HEI stemmed from “factors related to the HMC portfolio and its strategy and needs.” We wish that ethical considerations, not financial ones, had been the motivating factor in this case; Harvard should simply not associate itself with a company engaging in the practices allegedly committed by HEI. If the labor accusations against HEI were indeed the HMC’s primary reason for not reinvesting in the company, Harvard should have said so publicly, thus taking a clear moral stance.

Mendillo’s statement suggests, disappointingly, that investment concerns had more to do with the University’s choice than a genuine ethical sensitivity. Regardless, the public outcry against HEI seems to have had an effect, and the workers and activists who so tirelessly denounced the company have gained one more victory with Harvard’s decision. We trust it is the right one.

The Fair Harvard Fund Pledge Form

We now have available the Fair Harvard Fund pledge form, an easy way to donate to the Fair Harvard Fund by check. Here are the directions from the form:

For a standard donation, please make check payable to “The Fair Harvard Fund.”

For a tax-deductible donation ($100 minimum), please make check payable to “Responsible Endowments Coalition” with “The Fair Harvard Fund” in the memo line.

Please forward completed form and check to:
The Fair Harvard Fund
c/o Responsible Endowments Coalition
33 Flatbush Ave., 5th Floor
Brooklyn, NY 11217

You can access the form for printing here: The Fair Harvard Fund Pledge Form.