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ETHICAL INVESTING

“Brown University Investment Committee Recommends Divestment from Coal.” Nation. April 10, 2013. Earlier this week, in another victory for the growing movement pushing colleges and universities to divest from companies profitting from fossil fuels, a Brown University oversight committee voted to recommend that the university divest from the country’s 15 largest coal companies. The divestment campaign began last October, when a student group, called the Brown Divest Coal Campaign, implored the university to stop investing in coal. The committee, ACCRIP (Advisory Committee on Corporate Responsibility in Investment Policies), is charged with ensuring that the university’s investments match the institution’s ethical principles, and it has recommended divestment only three times in its entire history – from companies operating in Darfur during the genocide, from tobacco corporations, and from HEI Hotels. In each case, the board of trustees complied with the committee’s recommendations. Emboldened by the announcement, student activists are now demanding that Brown’s board of trustees divest from fossil-fuel companies at its upcoming meeting in May. Brown’s president has confirmed that divestment will be on the agenda at that meeting.

“Students Rally for Harvard To Divest.” By Indrani G. Das. Harvard Crimson. April 12, 2013. Thursday afternoon students assemble outside Massachusetts Hall to call for Harvard to divest from investments in Fossil Fuels. More than 100 members of the Harvard community rallied outside Massachusetts Hall on Thursday to deliver a petition calling for Harvard to divest from fossil fuels. Divest Harvard, the group that organized the event, has collected over 1,300 signatures from students, faculty, and alumni since the movement began in September. “The goal of today is to show President Faust and the Harvard Corporation that there is strong student support for divestment, and that the administration needs to take that support seriously,” said S. Krishnan Dasaratha ’13, one of the organizers of the event. “We hope that she or a member of the Corporation will accept our signatures and indicate willingness to have a conversation about divestment in good faith.” Since February, Divest Harvard has met with the Corporation Committee on Shareholder Responsibility, a committee consisting of four members of the Harvard Corporation that helps to determine the University’s stance on matters related to social responsibility. The Corporation has previously voted on issues regarding investment, including the decision to divest from tobacco manufacturing companies in 1989, as well as from companies involved in oil production in Sudan in 2005 and 2006. However, the Corporation has maintained that it does not want to use divestment as a political tool.

ETHICAL INVESTING

“Re-examining Divestment.” By Isaac Lederman. Nation/Daily Princetonian. March 5, 2013. Change is tough. Sociologist Max Weber famously remarked that “politics is the strong and slow boring of hard boards.” Progress, in other words, does not come easily: One must fight tooth and nail. Sometimes, however, change does come. Consider what happened in the 1980s, when 55 colleges and universities either fully or partially divested from South Africa, which suffered under a cruel apartheid regime. Of this campaign, Archbishop Desmond Tutu, a renowned opponent of apartheid, said the following in a New York Times op-ed: “There is no greater testament to the basic dignity of ordinary people everywhere than the divestment movement of the 1980s.” In other words, divestment in no small way contributed to the downfall of the horrific apartheid regime. Though much has changed since then, we unfortunately find ourselves once again embroiled in a fight against a terrible regime. We did not choose this fight: the times demanded it. We saw what havoc Hurricane Sandy wreaked on the Northeast and what hell the wildfires and drought that raged across the nation raised this summer. This does not include the destruction that climate change is causing all over the world. It should come as no surprise then, by the reckoning of economist Sir David Stern, inaction on climate change will cost us 5 percent of global GDP each year, “now and forever.” The situation becomes undoubtedly more troubling in light of the fact that fossil-fuel companies—which, according to one writer, hold “five times as much oil and coal and gas on the books as climate scientists think is safe to burn”—continue to lobby against action on climate change. This is why these firms, with their iron grip on Washington D.C. and capitals around the world, deserve to be a called a regime—and a frightening one at that. According to the Center for Responsive Politics, ExxonMobil, which journalist Steve Coll rightly calls “a private empire,” spent close to $3 million on political activities in 2012 alone. That is to say, there’s a reason why action on climate change has been blocked time and time again. At this point, you might be wondering how you, as a Princeton student, alum, faculty member, staff or parent, are connected to the terrifying beast that is the fossil-fuel industry. The answer is simple: through the endowment.

“Activist Group Condemns Endowment’s Link to Gunmakers.” By Nikita Kansra and Samuel Y. Weinstock. Harvard Crimson. March 8, 2013. A student and alumni activist group criticized Harvard this week for its investment in an index fund that is a major shareholder of firearm manufacturer Smith & Wesson.
The Responsible Investment at Harvard Coalition pointed out the connection in an emailed press release on Tuesday. Although not included in the press release, a second major firearm manufacturer—Sturm, Ruger, & Co., Inc.—is also linked to Harvard through the same index fund. Harvard’s connection to these gunmakers is distant. The Harvard Management Company’s most recent filings with the U.S. Securities and Exchange Commission indicate no direct holdings in arms manufacturers, but rather an investment in a massive portfolio of companies that represent countless industries in the American economy, including gun manufacturing. HMC manages the University’s $30 billion endowment. In these filings, HMC reported that it has nearly $3 million invested in the iShares Russell 2000 Index Fund—a portfolio of 2,000 American companies. According to financial magazine Barron’s, the Russell 2000 Index Fund is considered to be representative of changes in the broader American economy. Harvard’s investment in the index fund drew attention from Responsible Investment at Harvard because the Russell 2000 is a major shareholder in Smith & Wesson and Sturm, Ruger, & Co., Inc., which are two of the country’s top gun manufacturers. “I think the key takeaway here is that Harvard’s money…is going to support the manufacture and production of assault weapons,” said Nicole E. Granath ’15, co-director of Responsible Investment at Harvard. She added that even though the investment is indirect, any amount of money going to gunmakers is symbolic of support for the industry.

ETHICAL INVESTING

“For fossil fuel divesting, an uncertain future.” By Sophie Gould.” Yale Daily News. February 8, 2013. Leaning against the walls and sitting in aisles, more than 80 students crammed into a classroom on the second floor of Linsly-Chittenden last Saturday afternoon. A handful wore seemingly normal white “Y” T-shirts, but with a noticeable change: The bottom half of the shirts had been dipped in black dye, intended to make them look ominous, like they were caught in a rising tide of oil. Saturday marked the kickoff meeting of a campaign to get the University to phase out its endowment investments in the fossil fuel industry for ethical and environmental reasons. The campaign, called Fossil Free Yale, is part of a national movement started by environmental activist Bill McKibben that has spread to 252 college campuses, including most of the Ivy League. McKibben has said that the effort aims to push universities — whose endowments total about $400 billion — to agree to immediately freeze all new investments in the 200 fossil fuel companies with the largest oil, gas and coal reserves and phase out existing investments in those companies over the next five years. A “green” portfolio, McKibben said, should be as important to universities as an energy-efficient campus. Though experts are split on whether divestment is the best strategy to slow climate change and only three colleges have agreed to divest so far, Fossil Free campaigns are cropping up at new colleges every day.

ETHICAL INVESTING

“Students, Corporation To Discuss Social Choice Fund.” By Nikita Kansra and Samuel Y. Weinstock. Harvard Crimson. January 28, 2013. Five students will meet with the Harvard Corporation Committee on Shareholder Responsibility this Friday to discuss the details of a social choice fund, the creation of which the University announced in December. Three representatives from the Responsible Investment at Harvard Coalition—Michael E. Danto ’13, Nicole E. Granath ’15, and Samuel F. Wohns ’14—and the president and vice president of the Undergraduate Council—Tara Raghuveer ’14 and Jen Q. Zhu ’14—will attend the 45-minute meeting with two members of the Harvard Corporation, the University’s highest governing body, who sit on the CCSR. Wohns, the alumni coordinator of Responsible Investment at Harvard Coalition, said that the meeting would help his group decide whether or not to give the approximately $11,000 in the Fair Harvard Fund to the Harvard-managed social choice fund. The Responsible Investment at Harvard Coalition originally created the Fair Harvard Fund to show support for socially responsible investing, hoping that the University’s endowment managers at Harvard Management Company would take it over eventually. We’ll need to hear a credible commitment to the sustainability of the social choice fund,” Wohns said. Transparency, a promise to advertise the fund to potential donors, and oversight by students, alumni, and faculty would be important factors in the dicussion, according to Wohns.“We’re very optimistic that Friday’s meeting will lead to an agreement,” he said. Harvard’s social choice fund, which the University announced after months of pressure from students and alumni, will be established in July and invested in one or more mutual funds that the CCSR deems socially responsible. Income from those investments will contribute to student financial aid.

ETHICAL INVESTING

“Why Divestment is Changing the Climate Movement.” By Chloe Maxmin. Nation. January 24, 2013. A new movement to convince colleges and universities to divest from fossil fuel companies that own the majority of global carbon reserves has taken off across the nation. The inspiration for this wave of activism originated in a Rolling Stone article by Bill McKibben last summer. Coordinated by 350.org, divestment is spreading like wildfire. With cities, religious groups, individuals, and 210 campuses already involved, divestment has brought climate change to the forefront of local and national dialogues. I became an environmental activist at the age of twelve, and my commitment has never wavered. Still, I have been frustrated by fragmentation and insularity within the environmental movement. Now as a student leader of Divest Harvard, I have seen how divestment is engaging more students than any similar campaign in the past twenty years. Why is it so successful? Today, people live in a cloud of mistrust. Only 6 percent of Americans claim much confidence in Congress, 7 percent in Wall Street, 13 percent in big companies, and 19 percent in the White House. Individuals withdraw into personal social networks and communities to shield themselves from institutions of which they’ve grown skeptical. Past environmental campaigns focused mostly on changes that target those very institutions in which people have lost faith. They were exhorted to pressure politicians to “vote climate” or to use their consumer power to curb large corporations like Exxon. Such campaigns required persuading people to set aside their mistrust. It was always an uphill road. Divestment has opened up the climate movement to many new participants because it has found a way to bypass mistrust and hopelessness while forging a more inviting road to optimism and concrete action.

ETHICAL INVESTING

“Harvard To Establish Social Choice Fund.” By Samuel Y. Weinstock. Harvard Crimson. December 13, 2012. Following months of pressure from students and alumni and similar decisions at other schools, Harvard announced on Thursday that it will create a social choice fund. When the new fiscal year starts in July, contributions will be invested into one or more mutual funds that “take special account of social responsibility considerations,” according to a University press release. The Corporation Committee on Shareholder Responsibility—a part of the Harvard Corporation, the University’s highest governing body—will be responsible for selecting those mutual funds. The press release also stated that every year, 20 percent of the fund’s initial market value would be allocated to support student financial aid. The fund will support this allocation with investment returns and donations, according to University spokesperson Kevin Galvin. University President Drew G. Faust said in a statement that potential donors had approached her about a socially responsible investment option. “I have heard from many students and alumni who have asked for additional avenues to support both the University and broader social interests,” Faust said. In establishing the fund, Harvard follows the lead of several other colleges, including Hampshire, Williams, Vassar, Mount Holyoke, as well as Brown University, which in 2007 became the first Ivy League institution to start a social choice fund. Responsible Investment at Harvard, an organization of students, alumni, faculty, and other community members, has been lobbying the University to establish such a fund for nearly a year. To this end, members of the organization created their own Fair Harvard Fund, which they hoped would be taken over by the Harvard Management Company, which invests the University’s $30.7 billion endowment.

ETHICAL INVESTING

“As Other Colleges Discuss Divestment, Harvard Stays Mum.” By Melody Y. Guan. Harvard Crimson. November 27, 2012. While a number of colleges have expressed enthusiasm at the overwhelming Harvard student support for the divestment of the University’s endowment from the fossil fuel industry, many student leaders also voiced concern at the Harvard administration’s silence on the issue. More than 70 percent of Harvard undergraduates voted in favor of a referendum calling for divestment of Harvard’s $30.7 billion endowment from the fossil fuel industry during the Undergraduate Council presidential election, adding Harvard’s name to a slew of similar campaigns at other colleges. “We are so excited that Harvard and so many other schools have joined the movement. In particular, we were thrilled to hear that 72% of the Harvard student body supported the referendum,” Sachie Hopkins-Hayakawa, an organizer of the fossil fuel divestment campaign at Swarthmore College, wrote in an email. But despite such immense student support, the Harvard administration said last week that it is “not considering” divestment, and student attempts to meet University President Drew G. Faust to discuss the issue have been unsuccessful thus far.

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“Endowed With a Choice.” By Chloe S. Maxmin and Alli J. Welton. Harvard Crimson. October 02, 2012. Last week The Crimson staff published an opinion piece stating that divesting university endowments from fossil fuel companies is a tactic too extreme to be used in the fight against global warming. According to The Crimson, Harvard has “divested only a few times in the past, and has done so predominantly in instances of human rights abuses being linked to their investments.” That is to say, The Crimson believes that climate change isn’t a human rights issue. The Crimson must learn the basics of the climate crisis and its impact on our world before publishing such an article. The world’s foremost experts on human rights have long acknowledged that these issues are at the very core of the climate crisis: The United Nations Human Rights Council passed a resolution in 2008 stating that “climate change poses an immediate and far-reaching threat to people and communities around the world and has implications for the full enjoyment of human rights.” Divesting our endowment from fossil fuel corporations is not merely a logical response to the threat of global warming. It is the only moral response to a global human rights crisis and the only way to uphold the values of our Harvard community.

ETHICAL INVESTING

“Harvard’s Money Matters.” By Evelyn D. Chow, Alli Welton, and Samuel F. Wohns. Harvard Crimson. December 14, 2011. A Harvard education purports to teach its students the skills they need to make the world a better one. We are encouraged to think critically about social problems, to create our own innovative solutions to them, and, as a result of this education, to demonstrate the individual responsibility we each have to society. But there is a dangerous disconnect between the principles that guide the University’s socially beneficial education and research, and those that inform the investment strategies of the Harvard Management Company, which manages Harvard’s current $32 billion endowment. We are writing on behalf of a coalition of groups and individuals in the Harvard community known collectively as Responsible Investment at Harvard, or “RI@Harvard,” that seeks to end that disconnect. We believe that a responsible University endowment is one that aligns with Harvard’s mission, “to encourage students…to assume responsibility for the consequences of personal actions [and] to advance knowledge, to promote understanding, and to serve society,” and not one that is governed by short-term profit-seeking and disregard for its social and environmental impacts. Moreover, we believe that the University endowment should adhere to principles of social responsibility, transparency, and accountability in addition to upholding its fiduciary responsibility.

ETHICAL INVESTING

“Investing with Principles: Socially responsible ETFs are multiplying, with a variety of approaches.” By Jonathan Burton. Wall Street Journal. April 4, 2011. Socially responsible mutual funds, whose managers avoid stocks that don’t meet certain ethical and environmental standards, have long given interested investors a place for their money and their morals. Now indexed exchange-traded funds also let people put their cash where their conscience is. An increasing number of ETFs track U.S. and international indexes of companies that show commitment to environmental, social and corporate-governance criteria. Others focus on alternative energy and so-called clean-tech industries, or on religious principles.
As a group, socially responsible funds still suffer from a perception among investors that they are too restrictive about the types of companies they invest in, and so are less profitable than funds without such limitations. The roughly $100 billion invested in socially responsible investing, or SRI, funds is still tiny compared with the $7 trillion invested in all stock mutual funds and ETFs as of the end of February, according to fund researcher Strategic Insight. “People hear ‘socially responsible’ and they think they’re investing in organic-food manufacturers and Christian book stores,” says Michael Johnston, senior analyst at ETF Database, an online guide to ETF investing. But “if you look under the hood, it’s companies that for various reasons have been deemed to be responsible from a social, environmental and governance perspective.” Surprises Inside In fact, a lot of socially responsible ETFs include names that might surprise you.