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Ethical advisory committee ensures responsible investing

December 13, 2018
An image of the Eastman Quad with the letters Meliora spelled out.(University photo / J. Adam Fenster)

In response to a Students’ Association resolution, the University now has in place an Ethical Investment Advisory Committee (EIAC) comprised of student, faculty and staff representatives who help ensure that the University’s endowment excludes investments in companies that represent business, labor, social or environmental practices that are inconsistent with the University’s values.

In collaboration with the Students’ Association, the Faculty Senate Executive Committee last year proposed creation of the EIAC, and the Investment Committee of the Board of Trustees accepted its proposal.

The EIAC is already working with senior leaders in the Office of Institutional Resources on its mission to research funds in the endowment portfolio and provide input on the potential ethical and social conflicts that can arise. The University’s endowment provides perpetual annual support for student financial aid and faculty salaries, as well as support for certain facilities and academic programs.

EIAC membership includes three full-time faculty members selected by the Faculty Senate, and three non-faculty members of the University community: an undergraduate, a graduate student or post-doctoral fellow, and a non-academic staff member.  A staff member of the University’s Investment Team provides administrative support and serves as an ex-officio committee member. Chaired by Randy Stone, professor of political science, the EIAC meets about once a month and offers recommendations to the Faculty Senate and to the Board’s Investment Committee as needed.

“One of the EIAC’s major roles is to act as a conduit for the University community and make certain that the Investment Committee and fund managers are attuned to the community’s sense of worrisome ethical matters pertaining to investments,” said Randall Curren, chair of the Department of Philosophy and EIAC faculty representative. “Any concern raised with regard to an investment holding needs to meet a certain level of ethical clarity and EIAC consensus such that we would recommend divestment from the company or fund.”

“As a student group, we thought that divestment in fossil fuels is something the University should consider in the face of global climate change, but we also wanted to make a stronger and broader connection between undergraduate students and some of the important administrative decisions being made,” said Henry Scharfe, a senior environmental studies major who helped write the original Students’ Association bill. “The EIAC provides one such link, and any students are welcome to attend the meetings to contribute to the work being done.”

Douglas Phillips, senior vice president for Institutional Resources, notes that ethical investing practices have been in place for many years at the University, and as part of this the institution’s external fund managers are asked to avoid investments in companies widely identified as violating human rights or failing to respect environmental or social issues. Each year, Institutional Resources writes letters to its team of external managers to inform them of the University’s continued focus on sustainable and principled investment outlined in the corporate shareholder responsibility (CSR) policy.

According to Phillips, the University also pursues investments in companies that are developing promising new technologies related to hydro, solar and wind energy, and biofuels. “We often fund these kinds of economically feasible projects as part of our investment strategy, and as a University we have been recognized for this commitment to sustainability.”

The establishment of the EIAC builds on social investment policy that the Board’s Investment Committee adopted in 2006, which specifically prohibits University investments in companies identified as supporting the Sudanese government’s genocidal activities in Darfur.

Members of the University community are invited to contact the EIAC here.

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Category: University News

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