Harvard University’s $42 billion endowment fund manager is moving to complete its exit from fossil fuel companies, according to a statement by Harvard President Lawrence Bacow outlining the university’s action on addressing climate change.

In its February 2021 Climate Report, Harvard Management Company (HMC), the manager of the university’s endowment funds, revealed  that it had exited all direct exposure to companies that explore for or develop further reserves of fossil fuels, and reduced its overall exposure to fossil fuels, including indirect investments held through dedicated externally managed funds to less than 2% of its portfolio. Bacow said that these investments are now in runoff mode, and will end as its partnerships with these funds are liquidated.

As the endowment completes its investments in fossil fuel companies, Bacow said that HMC is building a portfolio of investments in funds that support the transition to a green economy, and that the university has invested alongside MIT in The Engine, a fund that aims to solve the world’s biggest problems, including accelerating the development of technologies addressing the challenges posed by climate change.

The statement follows Harvard’s commitment last year to reach net zero greenhouse gas emissions in its endowment by 2050, a first among U.S. endowments.

Bacow said:

“HMC was the first endowment in the country to commit to achieving net-zero greenhouse gas emissions across the entire investment portfolio by 2050. Since we announced this commitment, a number of other endowments have followed our lead. We will work with them and others to achieve greater transparency in the greenhouse gas footprint of all of our investment managers, along with the development of protocols for assessing and reducing the footprint for entire investment portfolios. We must continue to work with our investment managers and with industry if we are to bring about the transformation of our economy that climate change demands.”

HMC has also pledged to be greenhouse gas neutral in its own operations by the end of June 2022, and to continue to work with climate-focused investment organizations including Climate Action 100+, Principles for Responsible Investment, and CDP.