Ethical investing and Princeton: Students weigh in on the issues

At a time of increased concern about social responsibility in University investments, a March 7 forum sponsored by Princeton’s Resources Committee gave students a chance to raise questions and air their views.

Lily Adler ’15, president of the Princeton Coalition for Endowment Responsibility (PCER), and Laura Blumenthal, a second-year master’s-degree student in public policy, suggested giving less attention to divesting from ­certain investments — such as companies that manufacture guns or produce fossil fuels — and more to supporting companies with positive social impacts.

But the calculus for defining a socially responsible investment is complex and the Princeton community encompasses a wide range of views, said politics doctoral candidate Benjamin Johnson. While some activists find investing in oil companies objectionable, he said, other students want to work for such companies.

Adler advocated more transparency in Princeton’s investing and said a structure for effectively communicating community concerns about investments is crucial. While the Resources Committee is guided by “core university values” in making recommendations regarding investments to the trustees, she said, the actual substance of those values is unclear and should be defined democratically by all members of the University community.

The event drew only about 30 people to Dodds Auditorium, but Adler said she has seen an increase in endowment activism on campus. “These questions and demands exist, and we need to find a way to deal with them in a systematic and clear way where students don’t feel like they’re getting brushed aside,” she said.

The Resources Committee organized the forum as part of an ongoing discussion of ethical investing and social responsibility, according to Professor Deborah ­Prentice, the group’s chairwoman. The committee is considering a faculty petition for Princeton to divest its holdings in firearms companies and PCER’s proposal for structural reform of the procedures for raising concerns about University investments.

Jonathan Macey, chairman of Yale’s Advisory Committee on Investor Responsibility, was invited to the forum to present another model for addressing investment issues. Macey highlighted the importance of investment decisions to a university’s reputation, and said many institutions are re-examining their policies. If Harvard, Yale, and Princeton were to decide to coordinate their strategies for ethical investments, he said, it would be “incredibly powerful.”

A dissenting view on investment activism was offered by Aaron Hauptman ’15. “If students are so morally opposed to the investments,” he said, “they should leave the University and forgo the gifts” Princeton offers, such as financial aid.

That view is not uncommon, said Joshua Shulman ’13, another PCER member. But he said after the forum: “We’re criticizing the system we’re benefiting from because we’re grateful, not because we’re ungrateful. It’s because we care.”