Investing In Our Future

Ethical considerations are not taken into account in any meaningful way in the investment practices of most Cambridge institutions. Despite years of discussion and posturing, it is inadmissible that there has been almost no substantive progress in ensuring that the money which supports our education lives up to our own values and principles.

People constantly throw the ideal of “ethical investment” around, but what does that actually mean?

Firstly, the investments we need to address are not merely questionable or contentious; they are companies embroiled in grossly unethical conduct, whether that involves flagrantly violating local and international law, colluding with and funding armed repression, conducting corrosive lobbying and political manipulation, violently abusing indigenous rights, or committing wholesale ecological negligence.

Secondly, we need to be honest about our current environmental hypocrisy. If we really are serious about sustainability and reducing the university’s carbon footprint, then we have to extend those very commitments to the ways in which we profit. Most college endowments are highly dependent on the lucrative yields of fossil fuel companies, the largest contributors to climate change. How then can we think about greening the university without greening its portfolios?

If global warming is to be restricted to a 2 degree threshold, the temperature ceiling widely-held to safeguard the planet from extreme environmental catastrophe, we need to guarantee that reserves of carbon-intensive fossil fuels are not extracted. There is simply no other more imperative issue, for climate change compromises every population, every state, and the very fabric of our biosphere. And we will not be alone. In the last twelve months, over three hundred colleges in the United States have campaigned to jettison stocks in companies holding the majority of the world’s known coal, oil and gas reserves.

The melting planet

However, would doing something about the investment portfolios of the colleges to which we belong make any difference?

For starters, Cambridge’s investments build one of largest university endowments in the world. But more importantly, it will send a message. If colleges from a university world-renowned for its intellectual leadership take robust action against select companies, the world will sit up and notice. We have a chance to send an unprecedented message about genuine social accountability, sustainable development and the practical promotion of human rights.

I know this sounds both idealistic and complicated, but it’s entirely achievable. For all its intricacy, “responsible” investment only requires acting on a rather simple principle: we should not engage with or reap benefits from harmful procedures if they are avoidable.

Endowments appear to be these historic, unmovable reserves of money, but the past shows that enough reasoned indignation, whether against companies operating in apartheid South Africa or genocide-riven Sudan, can really bring remarkable successes.

Its not going to be an easy path, and any proposed changes will encounter much opposition. Colleges will claim that they have no say over their portfolios, that they are legally bound to maximise profitability, and that ethical investments will only make for greater risk and lower returns.

These statements are often misguiding. Colleges are charities, and charities  have what is called a “fiduciary duty” which means they have to invest prudently, but that does not solely imply maximizing the return on its resources. A fiduciary duty simply means acting in the best interest of the institution. Should that not also include assessing whether investments conflict with a charity’s goals or the ethics of its members? Additionally, if endowments are about securing the sustainable longevity of our institutions, why are we investing them in companies wrecking the future of our planet?

As for impotence, there is always something colleges can do. One option is to abandon certain funds or sell and wind down stocks in certain areas or companies. Another is to actively invest in initiatives in touch with the concerns of students and staff members. Colleges can also use its shareholder rights to impact company policies in a positive way.  We should not confuse inability with negligence.

When it comes to the profitability of responsible investments, it’s untenable to claim that it is impossible to make similar returns by placing our money in more principled initiatives. Sustainable and responsible investing are rapidly growing trends and asset classes, and there is ample evidence of their financial health.

Here’s the thing though: the burden of proof is not on you. If colleges truly believe that “business as usual” is the only way of securing lucrative returns, then they will have to prove it and show they’ve properly looked into alternative paths.

It’s all gone quiet over there

In the end, there are countless tactics and ways to approach this issue. It will take prolonged and often frustrating action, but the implications will be significant, by upholding the integrity of our colleges and supporting struggles against injustice around the world.

Find out who’s interested in your college, start investigating, and get everyone (from staff to supervisors to bursars) involved. Fuel a conversation, pass a motion through your JCR/MCR, petition the authorities, and show why it matters to change. This is something you personally can make a difference over.

We have in our hands a pressing opportunity to affect where £3.2 billion – that’s the estimated sum total of Cambridge college endowments – is placed. It’s time to use it.

For more information, contact [email protected] or visit http://www.green.cusu.cam.ac.uk/campaigns/ethicalinvestment/