Socially Responsible Investment
Socially responsible investment (SRI) is a broad term that covers a range of investment strategies, from divestment to proxy voting to screening stock options. Generally, investors who practice SRI favor companies that promote human rights, environmental stewardship, and consumer protection and avoid those with questionable ethical or moral practices and the industries involved with military spending, abortion, alcohol, and gambling.
President William G. Durden called for the creation of a Socially Responsible Investment Discussion Group in his Fall 2007 convocation speech:
“…I have asked that a special study group be formed to familiarize its members—students, faculty, staff, alumni and trustees—and eventually, the entire campus community with the College’s investment policy and portfolio. I will ask this group to build consensus on what 'socially responsible' investing truly means to our community in the context of an extremely complex world where one person’s social justice or sustainability can be another’s condemnation."
"I will ask this study group to create an appreciation on campus for the elements and implications of various national and international working models that are in the process of being developed and tested. These models address the delicate balance that must be struck between sustainability and socially sensitive investment and the demand upon non-profit educational institutions to produce robust returns on endowment investment for the purpose of completing their own worthy and socially just missions…”
After much discussion and debate, Dickinson College has committed to pursuing the Triple Bottom Line model of fiscal planning. This method attempts to maximize economic, environmental, and social gains in order to establish and maintain a sustainable financial portfolio.
SRI Committee Background
The Socially Responsible Investment (SRI) Discussion Committee was convened by President William Durden in August 2007. Inspiration for the group’s establishment came from a proposal submitted the previous winter by students regarding the issue of divestment from companies in Darfur, Sudan. The purpose of this group was to familiarize the Dickinson community with the College’s investment policy and portfolio and to figure out how SRI principles mesh with Dickinson’s work as an educational institution. Vice President and Treasurer Annette Parker ‘73 and Associate VP and Associate Treasurer David Walker facilitated the meetings. The group was comprised of administrators, faculty, students, and alumni who represented a variety of disciplines and viewpoints.
The group began to fulfill its task by determining what SRI means in the context of Dickinson College’s investment practices. Throughout 2007-2008, the group learned about the College’s investment policy and investment portfolio. They examined the College’s mission statement in an effort to determine the goals and strategies of the College as a non-profit institution.
After establishing this framework, the group discussed various methods of practicing SRI and corporate social responsibility. Using the Sustainable Endowment Institute’s “College Responsibility Report Card,” the group examined Dickinson’s own policies and compared them to peer institutions.
Towards the end of 2008, the group began taking action by communicating directly with investment managers and companies in its investment portfolios. Finally, the group discussed several ways to make Dickinson’s policies more socially responsible, including analyzing the possibility of investment screens, providing financial support for local program development, and redistributing funds within the endowment.
The turning point for the SRI Discussion Committee occurred midyear, when the individual members of the group began to search for a common ground on which to proceed. The group settled on the premise of a “Triple Bottom Line” model, looking to achieve high levels of financial, environmental, and social success. The group also concluded that improving endowment transparency and financial strategy to better educate the Dickinson community and prospective students is of utmost importance. Two internship positions were created to handle this project. The interns created a web site during the summer of 2008.
Beginning in fall 2008, the Discussion Committee worked with the College’s investment managers to engage in proxy voting and other forms of shareholder action. In September, the group hosted a Common Hour discussion, which was an open forum for campus education and feedback. In February, several students attended a national conference sponsored by the Responsible Endowments Coalition, where they were able to network and learn more about social responsible practices in higher education.
During the spring 2009 semester, students and staff tackled the proxy ballot for one of the directly-held companies and made recommendations to the Board based on their findings. This marked a step forward for the group in terms of becoming active shareholders.
The SRI Committee recognized the complexity of socially responsible investment. The result of their work is evidence of this. Corporate social responsibility requires a delicate balance between social consciousness and financial returns, as well as an awareness of the changing nature of the principles of sustainability. The future of SRI at Dickinson will encompass publicizing existing strategies and weighing these complex strategies against alternative approaches to decide how to best suit the needs of the Dickinson College community.
The SRI Discussion Committee has discussed at length the many diverse approaches to socially responsible investment. Rather than selling off stock in an offending company, which is known as divestment, the College has decided that practicing shareholder engagement is a more viable, realistic, and productive approach to SRI. Engaged shareholders have many options available to them. They can communicate with management and executives at the companies in question, file shareholder resolutions, participate in the proxy voting process, and attend annual meetings.
For information regarding our recently submitted response to the Sustainable Endowments Institute survey, please click here.
For a White Paper report on SRI at Dickinson College, please click here (Please note: this document is a PDF file and requires Acrobat Reader to view.).
For SRI’s approach to proxy voting, please click here.