February marked the first anniversary of the Corporation’s vote to divest from companies linked to the Sudanese government. Brown was one of the first universities in the nation to divest from Sudan in light of the ongoing humanitarian crisis in the Darfur region, where government-supported militia groups are perpetrating genocide against certain ethnic groups.
Today, over 35 U.S. colleges and universities have divested, according to Scott Warren ’09 of the Darfur Action Network. “A lot of colleges became interested in divestment” following Brown’s example, Warren said, “and since then a lot of those colleges have taken action.”
“Although Brown might not have had a ton of money invested in these companies, the momentum it has provided for other campaigns is at this point unquantifiable,” he said.
Fourteen companies have since been added to the University’s investment blacklist, according to Professor of Economics Louis Putterman, who served on the Advisory Committee on Corporate Responsibility in Investing Policies for several years and chaired the committee at the time of the Corporation vote.
Putterman said the University’s “do not invest” list comprises mostly energy companies based overseas, as it is currently illegal for U.S. citizens to do business in Sudan. The ACCRI has worked to identify “those companies that were most actively engaged in … generating profits that were taxed by the Sudanese government without direct benefit to the ordinary population in the country,” he said.
In its review process of corporations, the ACCRI – which comprises Brown faculty, students and alumni representatives – is aided by the independent research firms Institutional Shareholder Services and the Investor Responsibility Research Center as well as other universities involved in divestment, Putterman said.
After being reviewed by the ACCRI, information regarding companies linked to the Sudanese government is passed on to the Corporation. If the Corporation deems a company’s business practices unethical, it votes to withdraw existing investments or avoid future ones.
However, the process of divestment is complicated by the fact that the University stock portfolio is in constant flux. “If we were to meet in November about a certain company and found out that Brown did own shares, by the time we made a decision – let’s say in December – Brown might already have traded it,” Putterman said.
The University may still have indirect investments in blacklisted companies through commingled funds, such as mutual or hedge funds, which are invested by professional managers. So, according to Putterman, the University cannot prevent the purchase of stock in Sudan-affiliated companies “without pulling out from the portfolios entirely.”
“The committee agreed with the investment office people that it could be extremely costly to the University to have to switch its portfolios,” Putterman said. The compromise was to “send letters to the investment managers of those commingled funds explaining to them the University’s policy with regard to investing in companies active in Sudan and our desire they not hold those companies,” he added.
Harold Ward, professor emeritus of environmental studies, is currently chair of the ACCRI. Ward, a veteran member of the committee, said “shareholder responsibility has become a bigger issue” since he first joined the ACCRI in 1998.
The work of the committee – which also recommended the University’s divestment from the tobacco industry in 2003 – is based on “reviewing proxy proposals that have raised social issues and making recommendations to the University on how it should vote its proxies,” Ward said. Issues considered include toxicity, workers’ rights, healthcare, employee benefits, working conditions, charitable contributions and lobbying expenses.
Though many schools – including all eight in the Ivy League – have restricted or abolished investment in companies linked to Sudan, Ward said communication among the universities was limited, at least on an administrative level. “Students are a lot better at collaborating than faculty, it turns out,” Ward said in reference to the cooperation among the Brown Darfur Action Network and similar groups at peer institutions. “One of the things I hope to do this spring semester is to make some links a little stronger,” he added.
Despite the successes of the University’s divestment campaign, Putterman noted that grim realities persist in Sudan. “Unfortunately the situation hasn’t improved at all. … We’re still sitting here and it’s still unfolding over there, so I have to feel pretty disappointed and not satisfied that we’ve done enough by any means,” Putterman said.
Nevertheless, he added, “None of us as individuals or as members of the institution can be neutral” about the conflict in Sudan, and a policy of divestment is at least “one minimal step we could all take.”