Decarbonizing Harvard’s Endowment: Reviewing Harvard Management Company’s First Climate Report
Harvard Management Company (HMC), which manages Harvard University’s nearly $42 billion endowment, released its first Climate Report in February 2021. As the largest university endowment in the world, decisions Harvard makes to tangibly and materially reduce the climate impact of its investments will garner significant attention around the world and provide space for many other institutions to make similar moves. Further, the school has the scale and the stature to coordinate with other institutional investors and accelerate the pace of financial innovation across asset classes to more effectively integrate climate-related criteria. The reverse is also true: when Harvard does little or nothing, it provides an excuse for other institutions to delay restructuring as well.
In June 2020, the Harvard Corporation had directed HMC "to set itself on a path to decarbonize the overall endowment portfolio—a move in step with the final element of the resolution adopted by the Faculty in February. In particular, the Corporation has instructed HMC to develop a strategy for the endowment to achieve net-zero greenhouse gas emissions from the portfolio by 2050." The first public step along that strategic process was to be the creation of a public climate report by HMC. This paper provides a detailed review of HMC's Climate Report, including areas where structural reform and reporting transparency is required if HMC is going to have a reasonable chance of achieving its zero carbon goal.