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Ric regents & trustees
1. Taking Leadership on Responsible
Investment: Opportunities for
Colleges and Universities
Presented by Montgomery Norton and Tahiya Sultan
April 4, 2009
2. What is REC?
• A diverse coalition
of over 75 colleges
and universities
nationwide
• We support
students,
administrators,
trustees and alumni
to leverage $ 400
billion in economic
power!
3. • Why does it matter?
• History of RI
• Responsible investment practices
• What you can do
• Ways REC can support
• Case study: University of California
Topics Covered
4. Responsible Investing:
Why does it matter?
• The fastest way off of the picket line and
into the board room
• Leads to unbelievable victories in
corporate reform and community
development
• Brings some humanity back to capitalism
• Character, Trust, & Integrity
• Managing inclusion
5. Fiduciary
Responsibility
• "We have always known that heedless
self-interest was bad morals; we know
now that it is [also] bad economics.”
- FDR
• AIG CEO, Edward Liddy, testified
before the Congressional investigative
committee March 18, 2009 (Fiduciary
Responsibility to the Tax Payers)
6. Development of RI
• Vietnam War: funds screened for investment
• 1977-1985: 55 universities divest from Apartheid
South Africa
• 2000: Tobacco industry divestment
• March 16, 2006: UC divests from Sudan
• April 27, 2006: UN Principles for RI
• Jan 29, 2009: Social Investment Forum’s letter to
Obama (Office for Innovation in CSR)
7. Question
• President Bush signed legislation
allowing state and local governments to
cut investment ties with companies
doing business in Sudan.
– A. True
– B. False
8. Answer
• True. On December 28, 2007 Bush
signed the Sudan Accountability and
Divestment Act of 2007
9. Major Victories
• Fall of apartheid South Africa
• Home Depot stops selling old
growth timber
• Nike allows factory inspections
• McDonalds agrees to pesticide reduction
program
• Billions more dollars devoted to low-income
housing and microenterprise
10. Colleges and Universities:
The Next Frontier
• Mission-driven institutions
• Values most commonly cited
include:
–Ethical citizenship
–Support for the local
community
–Strength in diversity
WHERE IS YOUR SCHOOL INVESTED?
11. Examples of colleges
and universities
• Bard College uses a resolution to get
pesticide reduction program at
McDonalds
• Swarthmore College got Lockheed
Martin and FedEx to start giving
domestic partner benefits
• Duke University put millions in a
community investment fund
12. …its not just hippie
colleges
• 16 out of the top 20 US news and world
report ranked schools have committees
on investor responsibility, including
Harvard, Yale, Columbia, Amherst, etc.
• Public schools are typically behind
• Great way to secure school’s finances,
social reputation and improve alumni
donations!
13. Question
• Student Regents and Trustees can’t or
shouldn’t get involved in activist or
student organizing campaigns such as
Responsible Investment.
– A. Agree
– B. Disagree
14. UC Case Study
• Humble beginnings
• Collaborative resources
• UC Sustainability as a model
• Challenges of the UC 10 campus
system
15. What is responsible
investment?
• Passive Strategies
– Initiating corporate dialogue
– Filing and voting on shareholder resolutions
(proxy voting)
Active Strategies
Screened Funds
Proactive Investment
Divestment
16. How do we start?
• Educate students, alumni, administrators and
trustees about responsible investment
• Work for more transparency of endowment and
investment strategies
• Work to establish a Committee on Investor
Responsibility
• Link up with other colleges and universities
• As individuals—look at your own accounts!
17. How REC can help
• Researching the endowment
• Sample policies at other universities
• Connections to other universities and
social/environmental justice groups
• Alumni Network
• Student organizer programs
• Come to a conference—Oct 2-4, Wharton school
of business at UPenn
• Our website: www.endowmentethics.org
• Webinars: www.voicethread.com (endowments)
• Student and trustee handbooks
Tyler and Degoey (1994) measured employees’ willingness to accept managerial decisions voluntarily as a function of their supervisor’s (a) competence and (b) integrity. Competence refers to an ability basis of trust, whereas integrity refers to an intent basis. Both factors were significantly related... However integrity was a much stronger predictor than was competence (cited in Brockner & Siegel, 1996, p 407-408).
Tyler and Degoey (1996) found in “an empirical evaluation of three distinct aspects of trust suggests that trust is, at least to a considerable extent, a social resource... (and) that trust - if defined in terms of positive intent rather than calculated risk - is especially important during times of crisis and conflict” (pp. 345).
UN Principles for RI: Environment, Social and Corporate Governance (ESG) issues - tenets of Sustainable Development
Ethical citizenship: being trained to save the world. Local community: major employer, major polluter. Diversity: There’s a reason why all the admission brochures just happen to show people of all backgrounds happily sitting together in the cafeteria.
Bard and swat both done by REC.
Passive=school does not have to change its investments. thinking about it this way helps administrators see they don’t necessarily have to move 1 cent of the endowment to be able to promote the school’s values. Just give a basic overview of what each thing is; with more time usually we do a slide on each.
Talk about importance of committee as creating long-term commmitment after students graduate.
I direct everyone to chey as she gives out an intro email; gets folks on our mailing list etc.
