Fossil Fuel Martyr: Mrs Tom Steyer Resigns from Harvard (One Day Before Her Six-Year Tenure Ends)

Business advice for the mission-driven entrepreneur. SVN member Kat Taylor, CEO & Co-Founder of One PacificCoast Bank, says "culture matters the most" when starting up a business.

Kat Taylor—wife of billionaire environmental activist Tom Steyer—has resigned from Harvard’s Board of Overseers in protest at the university’s ongoing refusal to divest itself of its fossil fuel investment holdings.

The Daily Caller reports:

Taylor had enough of Harvard University’s fossil fuel investments. She stepped down from her position as a member of the Harvard Board of Overseers on Tuesday. In her resignation letter, Taylor decried the school’s “failure” to “adopt ethical commitments,” according to the Harvard Crimson.

“We should and would be horrified to find out that Harvard investments are actually funding some of the pernicious activities against which our standout academic leadership rails,” her letter stated. “But that is where we still sit, vulnerable to the inevitable association with our investment targets that profiting from them demands.

Harvard has a total endowment of $37.1 billion, with some investments in fossil fuels. The prestigious university has long faced pressure to divest. Over 100 Harvard faculty penned an open letter in 2014 urging University President Drew Faust to do so. In 2015, 20 students stormed a university building and demanded divestment. In March 2017, members of the activist organization Divest Harvard made similar demands while blockading University Hall.

It’s possible, however, that Harvard’s Board of Overseers won’t feel the loss of Ms Taylor too keenly. Her resignation, highly principled and selfless though it surely was, reportedly came just one day before her six-year term was due to expire.

The divestment movement has become something of an obsession with environmentalists. It is particularly popular in academe where activist groups are putting increasing pressure on university authorities, recognizing that being likely liberals who believe in global warming they are that much more likely to cave.

Cambridge University, for example, was recently presented with a long list of demands by a “Divestment Working Group” and is now considering whether to accept its so-called “recommendations.”

These include:

  • The University should commit to being carbon neutral by 2040
  • 100% of the University’s energy should come from renewable sources by 2030
  • The University should not invest in thermal coal or tar sands directly or indirectly
  • “10% of indirect investment should be placed with funds that embrace environmental, social and governance funds that are “consistent with a carbon neutral future”
  • The University should commit to the UN Principles of Responsible Investment
  • The Investment Office should become increasingly transparent about its investment processes through an annual report, with “information on environmental and social funds”, as well as an “informative website”
  • The University should join the Institutional Investors Group on Climate Change, “or an alternative equivalent”, “to ensure it lends its voice and authority in engagement with industry”
  • A Centre for a carbon-neutral future should be established to combine research on energy production and use, climate, sustainability, and policy

As at Harvard, the battle here is between woolly idealism and the ground truth that universities need to manage their investments and endowments intelligently.

Other institutions which have so far resisted the pressure to divest include the Church of England, the Wellcome Trust, and Oxford University.

This year’s Oxford v Cambridge boat race was disrupted by activists demanding that both universities divest from their fossil fuel holdings.

The reason most institutions continue to resist this pressure is because fossil fuel divestment makes no sense whatsoever.

Matt Ridley outlines the reasons here:

It’s all mad. Divestment won’t work, is unethical, hypocritical, aimed at the wrong target and based on flawed premises.

First, there is a buyer for every seller. Those pressing for fossil-fuel divestment see themselves as the successors to those who fought apartheid and tobacco by the same means. But all the tobacco divestment movement achieved in the 1990s was to lower share prices temporarily, enabling tobacco companies to buy back their shares. Anybody who bought tobacco shares when others sold beat the market handsomely over the next decade. Smoking is going to be killed by innovation (vaping), not divestment.

Tobacco (like apartheid) has no health benefits, only harms. That’s not true of fossil fuels. They make fertiliser, which banishes famine and lowers food prices. They replace wood as a fuel, saving forests. They transport goods and people, raising living standards. They make affordable electricity, providing light, heat and freedom from fatal indoor smoke. The divestment fanatics who think only of the bad effects of fossil fuels ignore all this.

So, second, if the world went cold turkey on fossil fuels the people who would suffer most would be the poor. Divestment is not an ethical thing to do; it’s a harsh, cold-hearted decision. It says: sorry, poor people (and rainforests), we have to make you suffer today so that our great grandchildren can be safe from a risk of rising sea levels in the event that no other energy technology comes along.

Third, it is hypocritical because the divesters continue to use electric light and gas heating, and to travel by car and plane. That’s because there is no alternative to fossil fuels on the scale we use them. Nuclear power could eventually fill the gap but not cheaply and not quickly: it currently provides 4 per cent of world energy consumption. Wind and solar provide only 1 per cent between them, after two decades of frantic expansion, and need far too much land. We would need to build 100,000 wind turbines on 30,000 square miles of land each year just to keep up with the annual increase in world electricity consumption, let alone gain market share. That’s a whole Scotland each year.

Fourth, the campaign will have little effect on the oil industry. Exxon is the 11th biggest oil company in the world in terms of reserves; Shell 19th and BP 20th. All but one (Lukoil) of the rest of the top 20 belong to governments: Iran, Saudi Arabia, Venezuela, Iraq, Nigeria, Russia, and so on. These regimes will pay no attention to students occupying senior common rooms in London. Indeed, if they see quoted firms hurt by divestment and pulling out of oil, they will shed a crocodile tear, jack up the price and move in.

It’s not just state-owned firms that will benefit. So will those owned by private equity or families. I regularly declare a commercial relationship with a coal company, but it’s not quoted, so divestment will not hurt it.

Besides Ridley’s, among the other families that have benefited from fossil fuel investments are, of course, Tom Steyer’s.

As we reported here:

A chunk of Steyer’s fortune – the New York Times disloyally revealed – comes from Big Coal. During its period under Steyer’s stewardship, Farallon invested in or lent money to coal-mining companies from Indonesia to China which increased their annual production by about 70 million tons. This is more than the amount of coal consumed annually by Britain and – quite possibly – the equivalent of one melted glacier and at least thirty dead baby polar bears per annum.

Steyer claims since to have seen the light. In a moving piece for Politico, he put an onion to his eye and described tearfully and no doubt wholly sincerely, that the reason he had stepped down from Farallon was because he could not reconcile his “personal values” with “managing a fund that by mandate is invested in all sectors of the global economy, including fossil fuels.”

Anticipating those cynics who have noted that he only kicked his coal habit as recently as the end of June (ie four months after he launched his green campaign – and suspiciously close to the NYT expose), Steyer suggested that Farallon’s sinister coal interests were the result of ignorance, both his own and that of the company’s personnel. “Its personnel were never focused on climate impacts”, he noted, and “the more I learned about the energy and climate problems we currently face, the more I realized I had to change my life.”