Taking Leadership on Responsible Investment: Opportunities for

Colleges and Universities

Presented by Montgomery Norton and Tahiya SultanApril 4, 2009

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!

• 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

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

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)

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)

Question• President Bush signed legislation

allowing state and local governments to cut investment ties with companies doing business in Sudan.

– A. True– B. False

Answer

• True. On December 28, 2007 Bush signed the Sudan Accountability and Divestment Act of 2007

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

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?

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

…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!

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

UC Case Study

• Humble beginnings• Collaborative resources• UC Sustainability as a model• Challenges of the UC 10 campus

system

What is responsible investment?

• Passive Strategies– Initiating corporate dialogue– Filing and voting on shareholder resolutions

(proxy voting)

Active Strategies Screened Funds Proactive Investment Divestment

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!

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

Responsible Endowments Coalition

Contact: – Cheyenna Weber, Organizing Director– Phone: 917.930.0123– Email: organize@endowmentethics.org– www.endowmentethics.org