Crimson is the New Green: Harvard’s endowment’s long awaited fossil fuel divestiture

Author: Sam Henze | UC Berkeley School of Law | J.D.  Candidate 2023 | Posted: November 9, 2021

 

Harvard University is a household name in the U.S.—it is the nation’s oldest institution of higher education, one of the prestigious Ivy League schools, the single greatest producer of U.S. presidents, and has the largest financial endowment of any university in the world. [1]. Thus, it is no surprise that the world is watching what Harvard does with its outsized investment pool. This was certainly true in early September when Harvard President, Lawrence Bacow, issued a message to the community announcing the final step in the endowment’s complete divestiture from fossil fuels. [2]

 

Since February, the Harvard Management Company (HMC), which operates the university’s $41.9 billion endowment, has been free of direct investments in fossil fuels. [3]. Harvard, however, continued to indirectly invest through its legacy investments in private equity funds with holdings in the industry. [4] Though the indirect investments constitute less than 2% of the endowment, they are symbolic. [5] In his recent statement, Bacow announced not only that HMC “does not intend” to make future direct investments in the fossil fuel industry, but also that HMC’s remaining indirect investments in private equity funds are in “runoff mode” and will be allowed to expire. [6] Bacow explained: “Given the need to decarbonize the economy and our responsibility as fiduciaries to make long-term investment decisions that support our teaching and research mission, we do not believe [fossil fuel] investments are prudent.” [7].

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White Without Privilege: MENA Underrepresentation in Corporate America

Board Diversity in the Golden State: What about MENA?

Author: Musa Faidi | UC Berkeley School of Law | J.D.  Candidate 2022 | Posted: November 24, 2020

 

California has, in recent years, emerged as a trail-blazer on many issues – one of which is diversity in corporate governance. Despite the positive changes associated with California laws that aim to increase representation for women and minorities on corporate boards, these laws fail to recognize Middle Eastern and North African (MENA) populations as an underrepresented group. As a result, laws such as California’s AB 979 systematically deny MENA Americans the opportunity to contribute their diverse perspectives in the decision-making processes that happen inside California-based public company boardrooms. Simply put, diversity is a key ESG issue, and MENA groups have been left out of this analysis.

  In the United States, MENA populations consist of individuals who have ancestral roots to countries in what is now known as the modern Middle East and North Africa. [1] Americans who consider themselves MENA populations are from a list of nineteen countries, including Egypt, Iran, Iraq, Palestine, Afghanistan, Syria, and Libya, among others. [2] Nationally, the State of California has the largest number of MENA Americans of any state, with Los Angeles, San Diego, and the San Francisco-Bay Area constituting the largest clusters. [3]

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Corporations’ Use of Prison Labor

Author: Jareli Reynoso Gutierrez | UC Berkeley School of Law | J.D.  Candidate 2021 | Posted: November 24, 2020

 

Throughout the historic summer of 2020, during the COVID-19 pandemic and the public mournings of the senseless murder of Black folks, many corporations made public promises in support of social justice. Some corporations were “bolder” through statements in support of Black Lives Matter and defunding police. Months passed, but what are the changes corporations implemented that align with those statements? Donations to the NAACP and Black Lives Matter, halt in the development and implementation of discriminatory tools, networking with Black organizations, revisions to discriminatory policies, and a promise to recruit diverse applicants. While all these promises are great, there is another critical area corporations need to consider.

Corporations receive substantial benefits through actively participating in the subjugation of Black people, corporations you know and love. Whole Foods where you purchase fancy cheese, McDonald’s where you rush to buy breakfast, Starbucks where you feed your caffeine addiction, Verizon and AT&T who you switched over to for their excellent cell service, Fidelity Investments who you trust to assist you with your taxes every year, American Airlines where you fly for vacation, and many more. Prison labor has impacted you, and even you benefit from it.

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This Ain’t It, CEO

Lululemon’s “Woke” Class: when ESG efforts go terribly wrong

Author:  Samantha Murray | UC Berkeley School of Law | J.D.  Candidate 2021 | Posted: November 23, 2020

 

For those unfamiliar with internet meme lexicon, Dictionary.com defines the phrase “this ain’t it, chief” as “a humorous social media phrase used to signal that someone thinks someone else’s statement is utterly wrong or idiotic.” [1] Urban Dictionary is less forgiving, offering this alternative definition: “something an individual would deem widely accepted or cool to show off, but in reality it just makes them look like a f***ing idiot.”[2] Regardless of the definition you prefer, the phrase can be aptly applied to Lululemon’s recent gaff: hosting an online “Decolonizing Gender” workshop that promises to help attendees “unveil historical erasure and resist capitalism.” [3] The irony of a company valued at $45 billion imploring its customers to resist capitalism while continuing to sell $150 leggings was not lost on the people of Twitter. [4] But was the massive backlash a foregone conclusion?

 

It’s not as if other companies haven’t tried to do the same thing. The most famous example is Patagonia’s 2011 “Don’t Buy This Jacket” Black Friday ad campaign, but the trend lives on in marketing strategies like Uber’s recent “If you tolerate racism, delete Uber” directive. [5] Of these three ESG strategies, Patagonia’s was widely heralded as a success, Uber’s has accrued a tepid response at best, and Lululemon’s has devolved into an absolute disaster. What accounts for this disparity in responses?

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Pay Your Fair Share:

Toward a Responsible Corporate Tax Strategy

Author: Clara Knapp | UC Berkeley School of Law | J.D.  Candidate 2021 | Posted: November 23, 2020

 

The myopic focus of corporate entities on tax bill reduction is a global phenomenon. However, U.S. big business, in particular, has long enjoyed wildly successful schemes of tax avoidance. Applying traditional tax strategies that are preoccupied with financial considerations, these corporations offer meager tax contributions to society despite their profitability.

But as public and regulatory scrutiny of corporate tax avoidance continue to grow—exacerbated by the compounding impacts of COVID-19, widespread natural disasters, and global economic recession (to name a few)—corporate tax strategy may be the target of an ESG makeover.

The recent surge in collective outrage over prolific corporate tax avoidance is not unfounded. The Tax Cuts and Jobs Act of 2017 (TCJA) illustrates how corporations can legally circumvent tax liability on a massive scale.

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