Socially Responsible Investment is here to stay

Author: JESSICA EARLY '09

At a rapidly increasing number of colleges across the country, students are organizing in a growing movement to question the practices behind the investment of their schools' multi-million-dollar endowments. Guided by social, ethical and environmental concerns, they see to monitor their colleges' investment portfolios in an effort to ensure that those practices abide by greater standards of corporate responsibility, while positively contributing to the local, national and global economy.

These students are rallying behind the call for Socially Responsible Investment (SRI), a process by which investors (including colleges) generate positive social capital by selectively investing in or divesting from, companies and funds. Based on guidelines determined by members of an investment community - from students all the way to administrators - and the shareholders of the companies in question.

This type of investment gained special prominence during the 1980s when many institutions of higher education moved to divest from corporations with business interests profiting from the apartheid regime of South Africa. Middlebury College was invested in South Africa, and was one school to engage in divestment of such holdings after students and faculty protested together to demand change.

SRI has proven instrumental not only as a force in positive social change, but has also been tremendously effective economically, sparking increased economic interest in investor and investee, and brought equal or greater returns for the investment community. Engaging in a policy of SRI does not mean incurring an economic loss-no money is being given away and the goal is still to maintain high returns on the invested capital. The difference between SRI and traditional investing is that the increase in our endowment does not come at the cost of social injustice and environmental harm; instead-it flourishes through ties to creative, hardworking, socially responsible entrepreneurs who benefit mutually from our investment in them.

Today, many more schools, including Amherst, Stanford, Dartmouth, Columbia, Barnard, Yale and Brown, have all established officially-recognized committees on SRI. These committees are designed to ensure that their institutions' endowments remain as fully transparent as possible to all members of the community, so that instances of questionable investment policy and specific investment issues may be adequately addressed in an official, democratic format.

In recent weeks, through the work of their respective committees, Amherst, Yale and Brown have announced that they will be divesting from companies engaged in business in the Sudanese region of Darfur, where acts of genocide are currently being perpetrated upon civilians by government-backed militia forces. The line between the violent atrocities and the role of corporations invested in the region remains tenuous and disconcerting - and the world community has come woefully late to Darfur's aid.

This instance is only one of the more powerful reasons why college investment policy is critical. Middlebury College currently lacks a committee through which students and faculty can view our endowment portfolio and voice their concerns on its investment. There is currently no transparency with respect to our endowment - and hence we have no knowledge of where our school's money is going.

But once again, we are ready for change. In conjunction with the Sunday Night Group, the Student Campaign for Socially Responsible Investment has taken the initiative and composed the first charter for the creation of Middlebury's own Advisory Committee on Socially Responsible Investment (ACSRI). As outlined in the charter, the Committee will be comprised of student, faculty, administrative, alumni and trustee members. It will deliberate and issue recommendations on the direction of the endowment's investment. Although SRI members have already had one meeting with the Board of Trustees and are continuing a dialogue with President Liebowitz, the establishment of the ACSRI has yet to be fully approved.

Since the investment of our endowment is one of the greatest impacts our college has on the community at large, it is crucial that this official forum for dialogue be created now. To quote from the Middlebury mission statement, "Middlebury endeavors to maintain a lifelong bond with its alumni and expects its graduates to be thoughtful, ethical leaders able to meet the challenges of informed citizenship. They should be independent thinkers, committed to service, with the courage to follow their convictions and prepared to accept responsibility for their actions." In light of such a clearly articulated mission, a lack of full transparency and student participation in investment policy is inconsistent with the core values of Middlebury College. It is about time that the first Advisory Committee on SRI becomes a reality. It is about time for us to fulfill our greater duty as informed citizens and members of this community. And it is time to make sure, openly, that Middlebury is putting its money where its mouth is.