Activists with Fossil Fuel Divest Harvard — a student group calling for the University to divest from fossil fuels — filed a complaint with Massachusetts Attorney General Maura T. Healey ’92 on Monday, alleging that Harvard’s highest governing board is violating state law through its continued investments in the fossil fuel industry.
The complaint claims the University’s fossil fuel holdings, valuated at less than two percent of the total endowment, represent the Harvard Corporation’s “failure” to comply with a provision of the 2009 Uniform Prudent Management of Institutional Funds Act provision that stipulates that not-for-profit entities have a duty to invest with their charitable purposes in mind.
Should the Attorney General’s office review the complaint and find that the University’s fossil fuel holdings do violate UPMIFA, it could have the authority to direct the University to sell its estimated $838 million — based on the two percent estimate — in fossil fuel holdings, according to Joseph E. “Ted” Hamilton, an attorney who helped Divest Harvard prepare the complaint.
Harvard spokesperson Jason A. Newton declined to comment on the complaint. The Attorney General’s office declined to comment.
The UPMIFA — which has been adopted by 49 states — removed some spending rules for charitable endowments and allowed not-for-profit groups to modify the restrictions donors place on the management, investment, or duration of their gifts.
Divestment activists also took their cause to the legal system in 2014, when seven students asked a state court to order Harvard to immediately sell off its fossil fuel holdings. The Massachusetts Superior Court dismissed the case, holding that the students lacked distinct interest in the management of the University’s endowment.
Six years after their unsuccessful lawsuit, Divest Harvard decided to pursue a different legal strategy. Activists are now betting that their 54-page complaint — which boasts the signatures of 65 Harvard affiliates, elected officials, climate scientists, and partner organizations — will push the Attorney General’s Non-Profit Organizations and Public Charities Division to determine whether Harvard’s investments are in violation of state law.
“This is not a lawsuit,” Hamilton said. “It’s not litigation. It’s a whole bunch of community members showing their support for the Attorney General taking action.”
Hamilton, a Harvard Law School graduate and co-founder of the Climate Defense Project, has also lent his expertise to other divestment efforts.
In November 2019, he helped file a similar complaint against Cornell University with New York Attorney General Letitia A. James. Hamilton credits the legal complaint with Cornell’s eventual decision to divest from fossil fuels in May 2020.
The complaint against Harvard alleges the University’s refusal to withdraw its endowment funds from an industry that contributes to “environmental destruction and social injustice” that contradicts its charitable mission.
It also argues the University does not manage its funds “with prudence,” citing the poor performance of fossil fuel companies in the stock market in recent years.
“In the last several months, the oil industry has begun to crumble, with the COVID-19 pandemic adding to already historic losses,” the complaint reads. “For any prudent investor, these signs clearly indicate that continued investment in fossil fuels is a losing proposition.”
Signatories on the complaint include State Reps. Nika C. Elugardo and Erika Uyterhoeven, both Democrats and Harvard alumni; City Councilors from Cambridge, Boston, Somerville, and Newton; Professor of the Practice of Public Philosophy Cornel R. West ’74 and several other Harvard faculty; and former U.S. Sen. Timothy E. Wirth ’61, a former member of the Harvard Board of Overseers.
Bevis Longstreth, a former official with the Securities and Exchange Commission who worked on the adoption of the UPMIFA in 2009 and joined the complaint, said in a press release that the University should not hold investments in businesses dependent on carbon emissions.
“Seeking profit from such activities today, or in the future, cannot be squared with Harvard’s charitable purposes,” Longstreth said.
Healey, the Democratic Attorney General, sued ExxonMobil in 2019 for allegedly misleading customers and investors about the risks of climate change due to the burning of fossil fuels. Theodore V. Wells Jr., a partner at New York law firm Paul Weiss and a member of the Harvard Corporation, is representing Exxon in the suit. Wells has recused himself from Corporation deliberations or votes related to fossil fuel divestment since becoming Exxon's counsel in climate change litigation in 2015, according to the University.
—Staff writer Kelsey J. Griffin can be reached at firstname.lastname@example.org. Follow her on Twitter @kelseyjgriffin.
—Staff writer Kevin A. Simauchi can be reached at email@example.com. Follow him on Twitter @Simauchi.