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An Open Letter to President Drew Faust, Harvard University

[fa icon="calendar'] Apr 20, 2018 9:55:26 AM / by Carol Pierson Holding

Drew Faust-Harvard

In a few months, you will retire from Harvard University and be free to direct your colossal talents wherever you want. I’m writing with an idea of how you could contribute to the climate change mitigation effort in a way no-one else can, and in the process, reverse what I think may be the only blemish on your otherwise outstanding record: forsaking the divestment movement.

You once said, “Climate change represents one of the world’s most consequential challenges.” I too am passionate about addressing climate change, writing commentary through the lens of business principles I learned at Harvard (MBA 1980). I used these principles to study divestment, and I came out in favor.

After five years of protests, arrests, lawsuits, sit-ins, blockades, petitions and verbal and written criticism, including my own commentary, you sent a junior investment manager to announce that Harvard’s Endowment intends to “pause” on investing in “some” fossil fuels. Your action pacified the student protestors but it disappointed me.

I’m sure you were facing pressure from those against divestment, especially donors whose fortunes come from fossil fuels. I was astounded to read one alumni denier’s claim that “…it is clear that CO2 causes little global warming” and another that “…you ‘believers’ feed the flames of needless CO2 panic just to blame conservatives for something.”

Still, your decision galls me, even now, one year after Harvard’s feeble divestment announcement, and I needed to understand it.

I decided to take a look at what else was going on in your life over the five years of the divestment struggle. The first thing I came across was this: Ric Burns’ documentary Death and the Civil War, based on your book This Republic of Suffering, premiered in September, 2012, about the time the Divest Harvard movement had its first meeting. You were the film’s source; you provided narration and on-screen interviews; you participated in the promotion tour.

So I watched the documentary. In the first fifteen minutes, I learned that over the four years of the Civil War, our nation lost 750,000 of its citizens, or 2.5%, or what in today’s world what would equal seven million Americans, death that touched every person in the country, death that was in and of itself overwhelming and “greater in scale and power than any ever before imagined.” A horrifying fact, vividly portrayed.

I couldn’t let go of that statement, that in today’s terms, deaths of 2.5% of the population would be seven million people. The New York Times described the film as “A Wave of Staggering Loss, in a Country Unprepared.” And I wondered just how many, many more deaths would result from climate and environmental changes, over how many, many more years. Earlier this year, the World Health Organization estimated 12.6 million deaths a year worldwide are the result of degradation in air and water quality and chemical hazards. That number doesn’t include deaths from rising sea levels, extreme weather, floods and droughts, dislocation, and so on. No one dares to project total mortality. That loss would be as incomprehensible as the human toll from the Civil War was to mid-19th century Americans.

In your 2015 speech at Tsinghua University in Bejing, China, you said, “The commitments of governments can be carried out only if every sector of society contributes. Industry, education, agriculture, business, finance, individual citizens—all are necessary participants in what must become an energy and environmental revolution.” I found my way of contributing, writing pieces intended to convince business leaders that climate change adaptation is sensible and fiscally prudent.

You closed your speech with a quote from architect and urban planner Wu Liangyong: “My dream about the future is that we could live… in harmony with nature.” I try to get that sentiment across in my more positive pieces, to advance a sustainable belief system in which we quit trying to vanquish nature and decide instead to corral her as our partner. That simple conviction could enable real solutions, and I’m continuing to advance that idea.

But I fear we’re both speaking to the believers. We’re missing the other piece, the piece that’s relevant no matter how you think about nature, the mortality we’re already seeing, those staggering losses from floods in Florida and wildfires in California to tainted water in Flint, in a country that can’t believe it’s happening even as we’re beginning to feel overwhelmed. This may be the contribution you’re meant to make, one that only you can bring to the environmental revolution: Help us be ready. Tell us how much worse our future will be, as we face staggering loss, if we’re unprepared. It’s not the past history but future history. Write another book; turn it into another movie and lay it out as you did in Death and the Civil War. Predict what new institutions we will need to be resilient. Show what major mutations to our society will be required. Remind us how we adapted during the Civil War. Tell us again that we can prepare for radical overhaul even amidst death that feels unbearable.

Or perhaps because of it.

Photo courtesy of  Art Poskanzer.


Carol Pierson Holding photo-2Carol Pierson Holding is President and Founder, Holding Associates. Carol serves as Guest Blogger for CSRHub. Her firm has focused on the intersection of brand and social responsibility, working with Cisco Systems, Wilmington Trust, Bankrate.com, the US EPA, Yale University’s School of Environmental Sciences, and various non-profits. Before founding Holding Associates, Carol worked in executive management positions at Siegel & Gale, McCann Erickson, and Citibank. She is a Board Member of AMREF (African Medical and Research Foundation). Carol received her AB from Smith College and her MBA from Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and rankings information on 17,000+ companies from 135 industries in 133 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

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350.org, Student Activism and the End of Reason

[fa icon="calendar'] Jun 20, 2013 10:22:55 AM / by CSRHub Blogging

By G. Benjamin Bingham

Fiduciary Duty

There were many reasons I took a leave of absence from Yale in 1970 after the National Guard lined the streets looking like aliens with their gas masks and camouflage -- there to keep the peace by shooting rubber bullets. I was not yet angry enough about the legal system and the Bobby Seal trial to join the dissenters, and the studios were too small for the big sculptures I wanted to create as a fine arts major. My lottery number was high and a year off would make me eligible for the draft and unlikely to be drafted. Once clear for a year I would be free. I also felt the hypocrisy when pacifism is expressed violently and wasn't certain I agreed with all the shouting, but at the same time I felt guilty for my inaction. My solution was to learn how to farm organically in England... practical, politically correct sculpture on a large scale. My feelings are similarly mixed now when I hear about the loud chanting that has been happening on at least 300 campuses across the country, even though I agree with their message. It is time to divest from fossil fuels and it can be done sanely and with full fiduciary reality. Why can't we just discuss it?

Unfortunately, the experts on the financial boards of endowments may one day look down on the smoldering remains of Earth, and comfort themselves by asserting that at least they did their "fiduciary duty" by putting profits ahead of people or planet! Their lack of willingness to consider the passionate pleas of students to divest is just as disingenuous as activism without real debate. A newspaper article at Swarthmore that divulged the talking points of an expert on why divestment would cost the endowment over $200 million in the next 10 years was full of stretched truths and hidden assumptions (read it here. Using the same kind of reasoning I came up with the following back of the envelope argument:

  • Since 80 percent of oil reserves can not be burned as fossil fuels (if continued life on the planet is considered important) the value of oil stocks cannot reflect those reserves as an asset; in fact they can arguably be considered a liability since the continued depletion of our atmosphere (now at 400ppm of carbon when 350 is carbon neutral!) is likely going to result in class action lawsuits. So, projected over time, the holding of oil-related stocks, now 5 percent of their portfolio (guessing) overvalued by at least 80 percent means that they will have a likely loss of 4 percent of the value of their portfolio per year for the next 10 years or $594 million (lots of similar guesswork)!
  • The bogus assumption that it will cost them dearly when leaving the best co-mingled managers now after they have done so well gives rise to another argument (a real study, but like them I am not providing the source!) that shows that over a long period of time the best 5 percent of managers in any 5-year period tend to be in the middle or tail-end of the pack in the next 5 years! If they argue that they are an exception, then I would argue that their managers are likely to be deftly shifting their portfolio anyway to stay ahead, so divestment happens regularly for financial reasons. They are used to it and should have no problem.
  • Finally, the assumption that divesting within the separately managed accounts will cost them is unfounded. In fact it could benefit them greatly if divestment catches on and big oil and coal stocks crash, but even without that consideration, the challenge we are all facing is that the universe of investments any manager considers is too small and looking outside that universe will expand diversification from the status quo, not contract it (another risk mitigation strategy). I haven't seen their "recent" study (since they did not provide a source), but there are many studies that show that, contrary to their favorite study, socially responsible criteria, including negative screening cannot be shown statistically to have an impact on performance (read about Moskowitz Prize here). Researchers in general cannot say whether negative screening has any reliable impact, positive or negative because, on average, all managers underperform their benchmarks by the amount they charge in fees.

It was particularly sad for me to watch the useless interchange at the Swarthmore Board meeting where the term sophomoric came alive on the YouTube video screen.

That said, even though no one was listening and you couldn't hear what was being said through the cheers and chants, the students did get some attention and goodness knows we need to wake up. The prospects of the Gulf Stream cooling to the point of ending its streaming warmth to Europe is becoming more imaginable as winters grow longer in Ireland and Northern Europe. We are now at 400 parts per million of carbon in the atmosphere, and despite the pleasant imagination that plants will just keep getting more lusciously leafy and eat up all the carbon while we enjoy more exotic weather on our North shores; we are beyond the neutral point of 350 ppm and if we don't do something drastic soon, well -- join us in reinventing how to invest in a world that will last.


G. Benjamin BinghamG. Benjamin (Ben) Bingham is the CEO and Founder of 3Sisters Sustainable Management. He is also the Chief Investment Officer currently focused on a Private Equity Fund called Scarab Holdings for partners in the new paradigm to foster a sustainable environment and social justice within a diverse and meaningful world culture. Read more of Ben's bio here.

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[fa icon="comment"] 2 Comments posted in activism, climate change, Divestment, Endowments, energy, G. Benjamin Bingham, students, Uncategorized, investing, Swarthmore, 350.org, Green News

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