New Socially Responsible Investing Committee Meets This Week

Yosef Abramowitz (CAS’87) hung a divest sign from his Buswell Street residence to protest South African apartheid. Photo courtesy of the Daily Free Press

The Advisory Committee on Socially Responsible Investing (ACSRI), whose formation was approved by the Board of Trustees last April, will meet for the first time this week. Approval of the committee was based on the recommendation of an ad hoc committee formed by the trustees to consider its role.

“This advisory committee will serve as an important channel to the Board of Trustees for members of our community who have concerns and suggestions about the investment of the University’s endowment,” says President Robert A. Brown. “From time to time, we receive requests and petitions for us to disinvest our endowment from either particular companies or market sectors. This advisory committee will give a forum for the Board of Trustees to consider such recommendations in a formal process. I also hope that this advisory committee, with representatives from the student body, the faculty, and the trustees, will develop over time an understanding of the structure of our investment portfolio, and the limits and opportunities we might have for making meaningful socially responsible investment decisions.”

BU joins a long list of colleges with similar committees, including Harvard, Brown, Tufts, Columbia, and the University of Pennsylvania. The committee will formalize a process that in years past was handled in an ad hoc manner.

At least twice previously, the Board of Trustees voted to divest from corporations: first in 1979 in opposition to the apartheid regime in South Africa, and in 2006 to protest the genocide in the Darfur region of Sudan. In the Sudan case, BU divested from multinational companies having direct business ties to the Sudanese government or whose business activities were in direct support of these companies.

The initial proposal for a formal committee to consider socially responsible investing came three years ago, when a group of faculty members lobbied for what they called a Socially Responsible Investment (SRI) committee to “promote environmental sustainability, peaceful technology, and good labor practices, while screening out companies that violate the values of our school.”

In a letter sent to the president in June 2010, the group argued that “SRI policies will enhance BU’s image and encourage donations to the University from alumni and philanthropists alike.”

The Undergraduate Student Government and the Graduate Student Organization later passed resolutions supporting the faculty members’ proposal and more than a dozen student groups signed on. The Faculty Council endorsed their colleagues’ proposal in October 2011.

Early in 2012, the Board of Trustees formed an ad hoc committee, comprising trustees, faculty members, and students, to discuss the formation of a permanent body that would deal with questions of socially responsible investment. Lila Hunnewell, the University’s chief investment officer, says she looks forward to supporting the ACSRI during its deliberations. “From a purely theoretical perspective, there could be an opportunity cost if an investor limits his or her opportunity set,” she says. “Universities, which strive both to have their endowments provide stable support to their operations and to preserve their endowments’ purchasing power in order to support future generations, have in the past divested only a handful of times.”

The advisory committee, which will meet at least once annually, will include three trustees, three faculty members, and one graduate and two undergraduate students. Dean of Students Kenneth Elmore (SED’87) and Brown will sit as ex-officio members. Two administrative liaisons—Hunnewell and Erika Geetter, the University’s general counsel—will also attend. At least five of the committee’s nine members must vote in support of a recommendation for it to be passed along to the Board of Trustees, and that majority must represent a member from each stakeholder group.

The committee is solely advisory; its recommendations are sent to the chair of the Board of Trustees, who then decides whether to forward the matter to the full board or its executive or investment committees. Following approval and with investment committee oversight, Hunnewell and her staff would implement any new divestment policy, reporting back to the investment committee and keeping the ACSRI informed.

Neta Crawford, a College of Arts & Sciences professor of political science, was one of the original signatories of the faculty letter. She is pleased by the trustees’ decision and would like to see the University make meeting minutes and investment practices as transparent as possible.

“Our values are demonstrated not only by what we do, but what we enable and encourage others to do,” Crawford says. “BU is explicitly committed to improving the world; it would be ironic and distressing if we were enabled to achieve our mission by exploiting other humans or harming the environment.”

David Lyons, a CAS professor of philosophy and a School of Law professor of law, also hails the news, saying that a university teaches not just through its degree programs, but also by how it behaves.

“Our values are expressed by our actions, and the same holds for institutions,” Lyons says. “Socially responsible investment generalizes on the idea that investments should reflect positive values beyond increasing wealth, values such as equity and welfare, in order to ensure that the University’s behavior is consistent with its value-laden academic activities.”

Benjamin Thompson (GRS’17), founder of DivestBU, a student group whose goal is to encourage the University to divest the world’s top 200 fossil fuel companies from its endowment, looks forward to discussing divestment from fossil fuels with members of the advisory committee. “We need a strong endowment to fund research and scholarships,” he says, “but these debts can and must be paid in cash, not lives.”