Each year, the Brown Investment Office invests hundreds of millions of dollars of donation money, directly into a handful of securities and indirectly through various external managers — hopefully in ways that donors trust align with the values of a free and forward-thinking institution.
Much like our peer institutions, Brown’s Investment Office purports to embrace Environmental, Social and Governance principles as a guiding force for their operations. ESG principles typically call for investors to not invest in companies causing social harm. At Brown, the responsibility to identify these companies is in part assigned to the Advisory Committee on University Resources Management. However, the recent Undergraduate Council of Students town hall with the Investment Office, and the unanswered questions left from it, underscored the challenge of comprehending how Brown translates its professed ethical investment practices into action.
ACURM serves as an external check on ethical standards and potentially harmful investment practices in Brown’s Investment Office. However, I question its internal ability to tackle this challenge. This matters because the Brown community must be able to trust that the University is taking the right measures to invest responsibly.
The vast majority of the endowment is invested across various asset classes by external managers, not by the Investment Office itself. What does that mean for ESG practices? It’s not clear. The specifics of ESG adoption and its regulation — including how the office’s "points-based rubric" compares to international standards for ESG frameworks, or how the University’s asset managers measure up to it — remain elusive. All we know is that approximately 23% of the endowment is managed by ESG-conscious investors. Additionally, an important aspect of Brown's ESG communications is the exclusion of certain sectors that external managers should abide by, included in the University’s “statement of philosophy.” These exclusions include the tobacco industry and companies involved in "genocidal actions and human rights violations in Darfur,” Sudan.
If any student or faculty member has concerns that companies that Brown invests in contribute to social harm, they can submit a request to ACURM. Notably, in 2020, the Advisory Committee on Corporate Responsibility in Investment Policies, which preceded ACURM, published a report recommending divestment from companies “facilitating human rights violations in Palestine.'' The recommendation was denied by President Christina Paxson P’19 P’MD’20, who has claimed that Brown’s endowment is not a “political instrument.” In her letter explaining the decision, Paxson added that “the recommendation did not adequately address the requirements for rigorous analysis and research as laid out in ACCRIP’s charge, nor was there the requisite level of specificity in regard to divestment."
Barring discussion on the political nature of the endowment, I am mainly concerned with the latter argument, which ultimately suggests that ACURM might not be fully suited to draft proposals that can pass. Although ACCRIP prompted official divestment resolutions on companies involved with tobacco and Darfur, these are exclusions that have been widely adopted by institutions and were likely already common practice for managers.
The issue of divestment from companies that facilitate the occupation of Palestinian territory by Israel is far trickier, especially given that Brown does not directly invest in any weapons manufacturers. Aside from weapons manufacturers, the companies identified for divestment in the 2020 proposal are in a wide variety of sectors, operate globally and have many divisions — making it extremely difficult to track down their links with human rights abuses and the impact of divestment. But it is not impossible. Divestors from this sector include KLP, Norway's largest pension fund, which did not wish to be invested in a handful of companies given the “risk that the excluded companies are contributing to the abuse of human rights in situations of war and conflict.” Norges Bank also divested over $21 million in 2021 from two Israeli companies, after its council on ethics ruled that Israeli settlements in the West Bank were built in violation of international law.
A successful divestment proposal must be able to address both its impact on mitigation of social harm and the potential financial risks it could expose Brown to — as well as understand how asset managers would implement any recommendation. Taking apart this complicated matrix involving a variety of stakeholders was likely difficult for ACCRIP and could today be difficult for ACURM, a committee with diverse and talented membership, but without any full-time staff.
Divestment is complicated — and the University might have legitimate reasons not to do it. But a lack of information available to ACURM should not be what prevents it. And Brown’s Investment Office should organize a meeting that also includes members of the Corporation and ACURM, so that no question goes unanswered. While the UCS town hall was elucidating for many of the students present, the Investment Office itself was unable to answer most questions that regard divestment.
I also hope that if Brown continues to deny divestment requests, it is not simply due to procedural concerns surrounding a single report. Brown students, many extremely concerned with the future of the citizens of Gaza, deserve to have a committee that has the capacity to fulfill the requirements needed to request divestment.
Brown has access to a wide network of researchers: alums who work in the United Nations, analysts in investment banks and experts in corporate social responsibility. There are plenty of professionals within Brown's reach who can assist ACURM in addressing the gaps Paxson identified in the 2020 divestment proposal, and Brown should take advantage of their expertise. Additionally, ACURM must strengthen its connections with other organizations that have successfully divested so that the committee can fully grasp what that entails — especially in the context of externally managed endowments — before submitting a divestment proposal.
These concerted efforts will not only empower students to feel heard in their calls for divestment but will also contribute to a greater sense of democracy on campus. Moreover, directing resources to ACURM can advance an overarching mission of the Investment Office to increase the portion of endowment funds managed with a formal ESG policy — a mutually beneficial outcome for the Brown community.
Maria Claudia Gurjão Bonaparte ’26 can be reached at email@example.com. Please send responses to this opinion to firstname.lastname@example.org and other op-eds to email@example.com.