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Selwyn College Cambridge Report

Selwyn College JCRS

A Paper regarding Proposals for a Socially Responsible Investment Policy for Selwyn College.

i Introduction

This paper asks College Council to consider the proposals outlined below, that have been discussed at JCR Open Meetings, and to decide upon Policy that can be taken to the next meeting of the College Investment Committee. Whilst the logistics of changing the investments the College currently has, might be complex, the JCRS holds the view that it is important to at least decide upon principles that the whole College is in agreement about.

ii Background

Selwyn College, along with numerous other academic institutions and charitable organisations, has recently featured in the Press as a result of shares it allegedly holds in companies such as BAe Systems (formerly British Aerospace), GKN and GEC. It is widely felt that to invest in companies that are involved in the supply of military, paramilitary and police equipment to governments with records of sustained human rights abuse, or which are involved in armed conflict is not socially responsible. The concept of ethical investment was created over 50 years ago and has increased in popularity since. To define the term ‘ethical’ is however, a difficult thing to do and every investor must decide individually upon which criteria best reflect what they deem to be ‘socially responsible’.

iii The Legal implications

Organisations are often concerned that it would be illegal to take socially responsible considerations into account when managing investment portfolios. This does not however seem to be the case, with Clare Short, the Secretary of State for International Development writing recently, “ethical investment behaviour is common sense behaviour.” In addition, the Goode Committee on Pension Law Reform concluded that, “trustees… are perfectly entitled to have a policy on ethical investment and pursue that policy.”

iv Possible financial implications

Another common concern that often arises in discussions about socially responsible investment is that it will inevitably mean a diminished return for the investments affected. This could be seen as acceptable considering the gain the investor experiences morally. However, although it is of course, a possibility that limiting the companies one invests in will lead to worse financial performance, it is by no means a certainty. EIRiS, The Ethical Investment Research Service say, “Research shows that investing according to ethical criteria makes little difference to overall financial performance. The average annual growth of ethical unit and investment trusts 1989-1998 was 31%. The average annual percentage growth of all unit and investment trusts during the same period was 15%.”

v The relevance to Selwyn

Many students at Selwyn enjoy the fact that they are able to feel the College is not just an academic institution but also a community of which they are a large part. As such, the JCRS believes that the College’s investment portfolio should reflect the beliefs and aims the community has.

Selwyn College was founded upon the principles of the Church of England and it is therefore important to note that the Church of England announced in April 1999 that it would not maintain shareholdings in British Aerospace (now BAe Systems), purely because of ethical considerations. Being a charity, the College might also compare itself to the children’s charity Dr Barnado’s who agreed a socially responsible investment policy in August 1999 with companies of concern including major arms manufacturers. Another example would be the Universities Superannuation Scheme, which provides pensions for staff at the University of Cambridge amongst others. After receiving letters and petitions from campaigners including Cambridge Fellows and Selwyn students, it announced in February 2000 that it would be researching into ethical investment issues for its own funds. The College of Medicine of the University of Wales in Cardiff and the University of East Anglia have also recently decided to do the same.

vi JCRS Proposals


The JCRS has debated the issue at length and itself has policy to lobby College to accept a code, that includes criteria such as ‘using unsustainable resources or production methods, with special reference to: failure to reduce pollution, using tropical hardwoods, or excessive effluent discharge’. However, it is recognised that any code initially adopted must be as easy to implement as possible. The JCRS therefore recommends that Council approve the suggestion that the College’s longstanding unwritten agreement not to invest in tobacco companies becomes formal policy. A commitment not to invest in any company that produces torture devices would also be desirable. The issue of arms companies is also proposed as one to be discussed. A possible policy to be adopted might be one that excludes any company with a long record of selling weaponry to repressive regimes. Examples of companies that would be affected include, BAe Systems, GKN, GEC, Rolls Royce, Vickers, Racal Electronics, Hunting and Raytheon Systems, although this list is of course not exhaustive.

Any moves towards disinvestment do of course take time. A way of any decision to formulate a code taking effect immediately would be for College to use its power as a shareholder in any companies that breach the code decided upon, to inform those companies of the objections they have in the particular area of the companies’ work.

vii Conclusions

A comprehensive socially responsible investment policy at Selwyn would be an ideal but in reality almost impossible. It is therefore proposed that Council consider the criteria that the JCRS feel to be most important and hopefully formulate a policy that will reflect not only the principles upon which the College was founded, but also the values it promotes today.

Sources

http://www.caatcic.freeserve.co.uk

http://www.eiris.u-net.com

April 2000







Posted on 16/11/04 by tom