Harvard Endowment’s Fossil Fuel Investments Drop Below 2%


The Harvard Management Company — which stewards the University’s $50.7 billion endowment — reported the endowment’s investments in fossil fuels have fallen below 2 percent, as Harvard remains on pace to fully divest from the industry by 2050.

The latest details of the University’s 2020 commitment to achieve net-zero emissions in its endowment by 2050 and meet its fossil fuels divestment goals were reported by HMC on Wednesday as a part of the annual climate report.

“HMC’s remaining exposure to private equity funds focused on the exploration and development of fossil fuels represented less than 2 percent of the endowment, a decrease from 2022,” the report said. “As expected, the endowment’s exposure to climate transition solutions is on pace to exceed those in fossil fuel-related investments in the next few years.”

Following both public and student pressures for the University to complete a full divestment from the fossil fuel industry, then-Harvard President Lawrence S. Bacow directed HMC to develop a plan to reach net zero emissions by 2050 and address its ties to the fossil fuel industry.


The current fossil fuel holdings are what Bacow labeled as the endowment's “legacy investments,” meaning HMC has avoided direct exposure to fossil fuels when investing in new private equity funds.

Harvard’s fossil fuel investments are currently worth approximately $1 billion.

HMC has since adopted a “thematic strategy” to generate endowment returns by investing in technologies that accelerate the low-carbon transition. The strategy includes investments that not only directly reduce emissions, but also investing in climate transition solutions which now exceed 1 percent of the endowment.

HMC’s climate-focused investments are largely through venture capital and asset management firms. In the report, they mentioned the frameworks of Breakthrough Energy and Eclipse as exemplary leaders in climate conscious investing.

“HMC is optimistic that these investments in climate solutions will help drive sustainable development and job growth, while generating competitive financial returns,” the report reads.

HMC is currently developing frameworks to accurately assess the endowment’s emissions, but has faced challenges in calculating climate statistics for the portion of the endowment that has been outsourced to external managers, per to the report.

Hedge funds represent the second largest asset class in HMC’s portfolio, comprising 31 percent of the portfolio. Assessing the carbon emissions of hedge funds remains the “most challenging” part of their ongoing effort to document Harvard’s entire endowment portfolio, the report stated.

While many asset owners with net zero commitments simply exclude hedge funds from their emissions analyses, HMC is working with a third-party service provider to pilot a custom hedge fund carbon emissions report.

Over the coming year, HMC has pledged to improve its access to climate-related data from its external managers to establish a baseline measurement for the portfolio to identify short term targets for reductions.

“HMC recognizes the critical need to develop and disclose interim goals and progress toward the achievement of those goals to ensure accountability and transparency,” the report stated.

While HMC is committed to fulfilling its net zero commitments with fund and portfolio managers, they are also committed to holding their internal operations to a carbon neutral standard.

2023 marked the second consecutive year HMC’s operations were carbon neutral and aligned its services with the University’s climate commitments.

—Staff writer Sidney K. Lee can be reached at Follow her on Twitter @sidneyklee.

—Staff writer Thomas J. Mete can be reached at Follow him on Twitter @thomasjmete.