Harvard war stocks elicit concerns



Faculty at Harvard have recently raised ethical concerns about the university’s holdings in war-related stocks. But because Yale has a different disclosure policy, it is impossible to determine Yale’s financial ties to the war.

Harvard faculty members recently found that the university invests approximately 0.5 percent of its endowment — about $87 million — in top defense contractors, and stands to profit considerably from the war. None of Yale’s roughly $305 million in investments listed in the University’s name is held in military stocks. But because most of Yale’s $10.5 billion endowment is managed by outside firms, the exact content of the University’s portfolio is unknown.

Yale’s Advisory Committee for Investor Responsibility chairman William Goetzmann, a School of Management professor, said Yale has no policy regarding investment in the defense industry.

“There’s no policy that Yale has either for or against military stocks,” Goetzmann said.

The ACIR addresses concerns about the University’s investment policy in concert with a Corporation committee on investor responsibility.

David Corson-Knowles ’03, a former ACIR member, said members of the University administration generally say if Yale does not have a policy against a particular investment, it is likely in the portfolio.

“Officials have said — if we don’t have a policy against it, the endowment is so large you can pretty much assume that we’re in it,” Corson-Knowles said.

Corson-Knowles said Yale’s policy makes the University’s ethical investment protocol difficult to implement.

“The lack of disclosure hampers the application of the ethical investment policy,” Corson-Knowles said.

But Yale President Richard Levin said Yale’s policy of outsourcing investments has been beneficial for the endowment.

“Our strategy … has served us very well, so on the whole I think the way we run our investments through many external managers who in turn buy stocks has proven effective,” Levin said.

The ACIR uses the 1969 “Ethical Investor” — a book written by Yale professors John Simon, James Tobin, William Brainard and Charles Lindbloom — which established criteria for the University to respond to concerns from the community about the institution’s investments.

Goetzmann said the subject of war investments as an ethical issue has never come up during his time at the head of the ACIR. The ACIR has not discussed Iraq with regard to investments decisions, Goetzmann said.

“I guess we haven’t focused on the issue as it pertains to the portfolio,” Goetzmann said.

Goetzmann said if members of the community have concerns about specific stocks that might be in the portfolio — or about certain ethical issues — they should present their concerns to the ACIR.

“We certainly want to be open and responsive,” Goetzmann said.

The ACIR will hold a public meeting on April 29 where students will present to committee members on topics concerning the environment, human rights and other issues. Thus far, the issue of military investment has not been raised, Goetzmann said.

At Harvard, 20 faculty members signed a petition questioning the moral nature of military investments. They did not recommend divestment but are planning to approach the Harvard Advisory Committee on Shareholder Responsibility about the issue.

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