November 7, 1997

Conscious Consumers call for a committee to advise the Board on socially responsible investing

The student group attempted to form the committee after it discovered several unethical firms in which the endowment was invested. This included $12 in the tobacco industry and $3.2 in Disney, which contracts international sweatshops.

The fact that Conscious Consumers could find out where the endowment was invested and how much money went to each sector is significant. Swarthmore will no longer disclose the amount of money invested in particular industries.

Also significant was the group’s discovery of the ban on ethical divestment and the explanation Swarthmore offered for the ban at the time. A Phoenix article from the time reports:

Conscious Consumers is also questioning one of the mandatory guidelines included in the Endowment Presentation to the Board of Managers. Section VII of the book states, “As a matter of policy, the Investment Committee manages the endowment to yield the best long term financial results, rather than pursue long-term objectives.” But Suzanne Welsh asserts that although the guideline exists, it does not preclude social objectives from being pursued in addition to financial objectives. However, the evaluation of these objectives would have to be a decision made by the entire community, not by the Investment Committee alone. “The guideline was created because it is not the Investment Committee’s job to make the decision of which social objectives to pursue. This is simply a process statement,” said Welsh.

First, I want to note that the only publicly available copy of Swarthmore’s full investment policy is the document referenced by Conscious Consumers, which was written in 1997. And I only knew to search the archives for Endowment Presentation to the Board of Managers because it was referenced in this article. This should underline the difficulty members of the Swarthmore community face in trying to learn even the most basic information about the ban.

Second, Welsh’s comment completely undermines the way that the Board uses the ban today. According to her, the “ban” simply serves as a “process statement” by clarifying the responsibilities of the Investment Committee. When the policy says, “the Investment Committee manages the endowment to yield the best long term financial results, rather than to pursue other social objectives,” it only refers to the investment committee. The policy does not mean that the Investment Committee or the Board gets to overrule the rest of the Swarthmore community when the community wants divestment, as it so clearly does.