LONDON’S GLOBAL UNIVERSITY
ETHICAL INVESTMENT REVIEW COMMITTEE
Monday 14 April 2014
MINUTES
PRESENT:
Lord Clement-Jones (Chair)
Professor Mark Lancaster
Professor Jane Rendell 1
Professor Nick Tyler
Mr Tom Youngman
In attendance: Mr Jason Clarke (Secretary)
Key to abbreviations
EIRC
Ethical Investment Review Committee
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WELCOME BY THE CHAIR
1.1
The Chair welcomed members to the meeting, noting that he, Professor Rendell and Mr
Youngman had all joined the Committee since its last meeting.
1.2
The Chair paid tribute to his predecessor, Mr Mark Knight, whose period of office as a lay
member of UCL Council (and therefore as a member of the Committee) had come to an end
at the end of the previous academic session.
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DECLARATION OF INTERESTS
Noted:
2.1
The Chair invited members to declare any interests they may have in the business to be
considered at the meeting.
2.2
Mr Youngman noted his position as UCL Union’s Environment and Ethics Officer. The UCL
Union had endorsed the ‘Fossil Free UCL’ Campaign and its policies as official UCL Union
policy. Mr Youngman noted, therefore, that in addition to personally supporting the 'Fossil
Free UCL' Campaign and its aims and objectives, he had a responsibility as a UCL Union
Officer to uphold the UCL Union's policy on this matter; his comments in relation to the
submission from the Campaign should therefore be seen in that context.
1
Professor Rendell joined the meeting via telephone link
Ethical Investment Review Committee – Minutes – 14 April 2014
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TERMS OF REFERENCE, CONSTITUTION AND 2013-14 MEMBERSHIP
Noted:
3.1
The terms of reference, constitution and 2013-14 membership of the Committee
at EIRC 1-1 (13-14).
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MINUTES OF THE MEETING HELD ON 29 APRIL 2013 [EIRC Min. 1-6, 29.04.13]
Approved:
4.1
The Minutes of the last meeting of EIRC which was held on 29 April 2013.
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MATTERS ARISING FROM THE MINUTES
5A
Ethical implications of investing in general funds as opposed to particular stocks
[EIRC Min.6, 29.04.13]
Noted:
5A.1
Following the last meeting, the (then) Chair of EIRC wrote to the Treasurer to set out
the Committee’s views on this issue. It was understood that, in light of the Committee’s
advice, it had been agreed that the possibility of UCL investing in a general fund rather than
a segregated fund would not be explored further.
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BRIEFING NOTE ON THE ESTABLISHMENT OF EIRC AND ITS ROLE
Received:
6.1
A briefing note by the EIRC Secretary at EIRC 1-2 (13-14), summarising the background to
the establishment of the Committee and its role, presented by the Secretary.
Noted:
6.2
Members noted the following points in relation to the creation and role of the Committee:
•
The decision to establish the EIRC and to approve the current UCL Investment
Policy had been taken by Council at its meeting in November 2008.
•
Under its terms of reference, EIRC’s essential role was to receive and consider
representations from members of UCL (ie staff, students, or alumni) that an
investment by UCL in a particular stock be reviewed on ethical grounds.
•
In establishing the EIRC and in agreeing the statement of ethical considerations
which forms part of the UCL Investment Policy, Council explicitly decided to adopt a
negative screening, responsive approach rather than actively seek out ethical
investments through positive screening or through investment in an ethical fund. The
Committee was obliged to operate according to the terms of reference and within the
policy framework set by Council.
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Ethical Investment Review Committee – Minutes – 14 April 2014
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•
The EIRC was not empowered to alter UCL’s current investment policy, which was
ultimately a matter for Council, or to become involved in investment decisions or
decisions on whether to invest in particular stocks, which was the responsibility of
the Investments Committee. Nor was the Committee empowered itself to request
reviews of particular stocks on ethical grounds or to request that investments in
general sectors or areas of business be reviewed.
•
The last time that the Committee had met to consider a divestment request had been
in 2009, when EIRC had considered representations which had been received from
within the UCL community regarding ethical concerns about UCL’s (then) investment
in Cobham plc. Since 2009, no further divestment requests have been received, so
there had been no need for the Committee to meet to discuss divestment issues.
However, a meeting had been held in April 2013 to discuss a specific issue relating
to the nature of the fund by which UCL invests its funds [the Minutes of the April
2013 meeting refer].
DIVESTMENT REQUESTS TO BE CONSIDERED BY EIRC
Noted:
7.1
The meeting had been called in order for EIRC to (i) receive two requests that it review
current UCL investments on ethical grounds and (ii) discuss the steps that it would wish to
take in order to undertake those reviews.
Received:
7.2
A request from the ‘Fossil Free UCL’ Campaign at EIRC 1-3 (13-14) relating to a number of
investments in companies involved in the fossil fuel industry.
7.3
A request at EIRC 1-4 (13-14) relating to the United Technologies Corporation (UTC).
7.4
A briefing note by the EIRC Secretary at EIRC 1-5 (13-14).
Discussion:
7.6
EIRC discussed each of the submissions in turn and then considered the steps that it would
need to take to review them.
7.7
The submission relating to United Technologies Corporation stated that the EIRC set a
precedent in 2009 in recommending that UCL disinvest from Cobham plc. EIRC noted that
it had judged the issue of UCL’s investment in Cobham plc in accordance with the
statement of ethical considerations in the Investment Policy and had not made any
statement about UCL investing in the arms trade/defence sector (which in any case would
have been outwith its remit), and nor did it set any binding precedent which would have to
be followed by EIRC in any future cases.
7.8
The submission from the ‘Fossil Free UCL’ Campaign asked EIRC to review UCL’s
investments in 17 companies that have direct links with the fossil fuel industry. While
members agreed that they had a duty to consider divestment requests fully and thoroughly
in order to ensure that such requests are given proper consideration in accordance with
UCL’s statement of ethical considerations which forms part of UCL’s Investment Policy,
they also noted that undertaking an independent evaluation of all 17 investments (which
had been presented as a single divestment request) would be a significant undertaking and
that it was likely that they would not be in a position to reach a conclusion on that request or
to report back for a considerable period of time. Following a lengthy discussion of the
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Ethical Investment Review Committee – Minutes – 14 April 2014
options open to the Committee in terms of the detailed process for assessing the
divestment request, it was agreed that the Committee should invite the Campaign to
consider submitting a revised or prioritised list of companies which would enable it to form a
preliminary view more quickly eg if the Campaign was to group the 17 companies into
different categories according to the precise nature of their activities or operations, then it
could ask the Committee to initially assess one investment in each category. If the
Campaign declined to submit a revised divestment request, then the Committee would be
obliged to review all 17 investments before reaching any form of conclusion or being in a
position to report back.
7.10
The submission also asked EIRC to review UCL’s investments in a further 9 companies,
primarily banks, which were not directly involved in the fossil fuel industry but which were,
according to the Campaign, indirectly involved in that industry through their own
investments. The Committee noted that the statement of ethical considerations which forms
part of UCL’s Investment Policy refers to investment in a “particular business”. EIRC had
previously taken the view that this means that it should review direct investments in
companies and not indirect investments. For example, if a request were to be received that
UCL should review its investment in a company X because it invests in company Y which is
seen as ethically unacceptable, the Committee would not review such a request as the
‘particular business’ in which UCL is investing in this situation is Company X and not
Company Y. Consequently, the Committee agreed that to review UCL’s investments in
these further 9 companies would be outwith its remit as currently framed by the statement
of ethical considerations in the UCL Investment Policy.
7.11
The Campaign’s submission also covered a range of issues other than UCL’s investments
in fossil fuel companies, such as research funding and advertising. While EIRC noted
these other issues as contextual information, members agreed that these fell outwith the
Committee’s remit as set out in its terms of reference. However, the Committee also noted
that an informal liaison group comprising UCL managers and representatives of the
Campaign had been meeting to discuss these broader issues, including UCL’s current
approach to ethical investment and possible alternative models and approaches.
7.12
In terms of the process to be followed by EIRC in considering the two submissions, EIRC
noted that UCL is a registered charity and is therefore subject to UK charity law. The
members of Council, as charitable trustees, are required by the Charity Commission to
maximise financial returns and not to use investment decisions as a proxy for making moral
or social statements at the expense of the charity concerned. However, while the guiding
principle of UCL’s investment policy is to generate funds, there were three instances,
established in English case law, where criteria other than financial criteria were appropriate
and in accordance with which UCL would not invest in a particular business in the following
circumstances:
7.12
(i)
where such investment might conflict, or be inconsistent, with the
aims, objects or activities of UCL;
(ii)
where such investment might hamper the work of UCL either by
alienating financial supporters or potential financial supporters; or
by having a material impact on applications from potential
students;
(iii)
where such investment, while not excluded by virtue of (i) or (ii)
above, is considered by UCL to be unethical (subject to Paragraph
4 of the investment policy).
EIRC agreed that, in light of the above, in order to review the two submissions, it would
need to (a) seek independent assessment or verification for the claims which had
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Ethical Investment Review Committee – Minutes – 14 April 2014
been made in the two submissions and (b) seek the views of relevant UCL staff in order to
make an assessment against the criteria set out at (i) – (iii) at Minute 7.11 above.
7.13
EIRC agreed that it should invite UCL’s current investment advisers to advise on the two
submissions and seek to obtain data analyses of those current investments against ethical
criteria from specialist agencies. EIRC also agreed that a number of UCL officers should
be invited to advise the Committee in relation to their area of responsibility/operations,
including, but not necessarily limited to, the following:
•
•
•
•
•
•
•
•
•
•
•
•
Vice-Provost (Research);
Director of Research Planning;
Director of Research Services;
Vice-Provost (Education);
Director of Education Planning;
Vice-Provost (International);
Director of the Office for International Affairs;
Vice-Provost (Enterprise);
Director of UCL Enterprise Operations and UCL Advances;
Director of Communications and Marketing;
Director of Development and Alumni Relations;
Head of Access and Admissions.
RESOLVED:
7.14
That in relation to the divestment request received relating to the investment in the United
Technologies Corporation, the Committee proceed to assess the request as set out above.
[ACTION: Jason Clarke]
7.15
That in relation to the divestment request received from the Fossil Fuel Free UCL
Campaign, that the Committee (a) advises the Campaign that its remit extends to reviewing
direct investments only; (b) invites the Campaign to submit a revised or prioritised list of
investments that it wishes the Committee to review; and (c) in light of the Campaign’s
response to (b), proceeds to assess the request as set out above.
[ACTION: Jason Clarke]
8
DATES OF FUTURE MEETINGS
Discussed:
8.1
The Committee agreed that it should re-convene once the next steps outlined above had
been completed in order to review any further information which had been obtained.
JASON CLARKE
Secretary to the Ethical Investment Review Committee
[telephone 020 7679 8594, UCL extension 28594, email: jason.clarke@ucl.ac.uk]
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