Divesting from ethics

In March 2008, one year after students successfully convinced the University to divest from PetroChina and China Petroleum, companies complicit in the ongoing genocide in Darfur, the administration told the Journal it would bring a draft statement on ethical investing to the May 2008 Board of Trustees meeting. May came and went, however, without the appearance of any such draft.

At the time I was a bit miffed at the delay, but accepted that it takes time to craft an ethical investing policy. Perhaps everyone in the operations and finance office was huddled in then-Vice-Principal Andrew Simpson’s office, arguing whether Anscombe’s consequentialism could be reconciled with Kant’s categorical imperative when it came to investing.

I hoped that when they did get around to releasing the draft, it would consist of a framework of socially responsible policies outlining our duty to society rather than simply reiterate our unshakable fiduciary responsibility to our stakeholders. Perhaps it would even include a plan for the systematic screening of investments and the creation of a permanent Board of Trustees committee with the responsibility of monitoring and reviewing our investments to ensure they continue to meet our ethical standards.

Needless to say, when the draft was finally released four months late, it was a bit of a letdown. Instead of ethics, it appeared everyone in the operations and finance office had been debating how to release an ethical investing statement without actually committing to anything. What they gave us was a glorified complaints procedure with the word “ethical” replaced by the more ambiguous term “responsible.” There was no mention of our duty to consider environmental, societal and governance issues in relation to our investments.

After the draft’s release, the administration extended a perfunctory request for feedback and said the final statement would be voted on in December. Not surprisingly, December came and went without any statement. The final draft is now scheduled to be voted on in March, almost a year after the first draft was supposed to be presented.

So how could a university that had just divested from companies doing business with the Sudanese government turn its back on ethical investing practices only a year later? The answer is that the Darfur divestment had nothing to do with ethics and everything to do with placating students. As Vice-Principal Simpson told the Journal last March, “We had conversations with the fund managers on how they felt. They were not relying on those investments.” The message is loud and clear: As long as you ask us to divest from companies that don’t make us lots of money, we’re happy to support ethical investment.

Now that Simpson has left, however, there may be reason for hope. It could be that Principal Williams was disillusioned with the statement and wants to make amends. I guess we’ll find out when the final draft is released sometime in 2010.

All final editorial decisions are made by the Editor(s)-in-Chief and/or the Managing Editor. Authors should not be contacted, targeted, or harassed under any circumstances. If you have any grievances with this article, please direct your comments to journal_editors@ams.queensu.ca.

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