FAQ – Social Responsibility at Edinburgh Uni

What is this about, and what are we focusing on?

The campaign for responsible investment is one plank in a broader campaign for social and environmental responsibility at the university.

Other than the direct impact of the way in which the university goes about its core activities, teaching and research, the way in which the university manages its finances has an impact on the wider world, and brings up a number of ethical questions. There are several aspects to this:

      • Procurement: how the universities buys (procures) goods and services from external organisations. With a university the size of Edinburgh, the procurement budget is huge, and what the university buys and who it supports has significance. People and Planet has already had some important successes while campaigning in this area: in 2004 the university became a Fairtrade university, a huge step at the time, and in 2012 the procurement department agreed to sign up to the Worker’s Rights Consortium (WRC) , which monitors garment supply chains for human rights abuses. Procurement also seems keen to support the setting up of an e-WRC for electronics goods.
      • Funding of research: research funding comes from a variety of sources, much of it from the state. However, increasing amounts of research funding are coming from private businesses. This is problematic as it gives private businesses more power over what research is conducted, and how. It may also mean the results of research are used for private benefit, rather than for the public good. We don’t currently know how significant the role of private funding is in influencing research.
      • Donations to the university: the university has recently set up a committee, with student representation, to screen donations to the university. There was a scandal at LSE in 2011 over donations that were accepted from organisations with links to the Gaddafi regime; the university is keen to avoid similar scandals in Edinburgh.
      • Pensions: being the fourth largest employer in Edinburgh, the university’s pension fund has a large amount of cash – and how this is invested makes a difference. It looks like the ethical policy of the University of Edinburgh’s pension fund could do with improving – however when the ethical investment campaign first kicked off in 2002, People and Planet recognised that it is up to the members of the pension scheme to decide how their fund should invest.
      • Endowments: the university also directly manages over £250 million of investments – this is money which the university is investing for future use. It’s the university’s huge saving account. Much of this money has been given to the university, often for a specific purpose, such as for providing bursaries – this is the university’s endowment. The university invests this money in stocks and shares until it needs it – however many of the companies invested in have a dodgy social or environmental track record. See this for more info.

Who decides what the university invests in?

Ultimate decision-making power in the university lies with the University Court, the university’s governing body. This is chaired by the rector (currently Peter McColl), who is directly elected by staff and students. The ‘head’ of the university is the principal (currently Tim O’Shea) who also sits on court. There are a number of other members of court, including two EUSA sabbatical officers (elected by students). These however are in the minority.

Management of investments is done by an investment committee, who also follow court guidance on ethical restrictions on investments. We do not know much about what is discussed at the investment committee – in fact, when the rector asked to see minutes of meetings, he was told they were commercially sensitive!

Fund management is done by an external fund manager, following the investment committee instructions. Until recently 100% of the university’s investments have been with the fund manager Bailie Gifford. However recently 50% of the investments have been moved elsewhere – 25% to fund improvements in the university’s estates and for building new student accommodation, and 25% to invest with a different fund manager – as yet undecided. As part of the Responsible Investment campaign we will be pushing for at least this 25% to be invested with a fund manager who uses ethical criteria.

What about EUSA’s investments?

As far as we know, EUSA (the Edinburgh University Students’ Association) does not have any significant investments – in fact their finances are very stretched.

However, EUSA and the university are very closely linked, and as the representative body for students, motions and referendum questions about the university’s investments go through EUSA – often in the form “EUSA should lobby the university to…”.

Some referendum questions in the past have also been about how EUSA procures its services. It runs all campus bars and many other venues therefore its procurement has a significant influence (even if its investments are not significant) – past motions relating to this have included a boycott of Nestle, which is still being implemented today.

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