Group says Yale invests irresponsibly

Organizers of the Responsible Endowment Project on Monday accused Yale of placing endowment dollars in ethically questionable investments and called on the University to curtail the practice.

At a panel discussion that drew an audience of about 150, REP leaders argued that some of Yale’s investments support environmentally unsustainable practices and worker mistreatment. To humanize the issue, speakers at the event included California hotel worker Jose Landino — who says he and his coworkers have been exploited by the Yale-supported company HEI Hotels and Resorts — along with Dartmouth professor Sydney Lea ’64 GRD ’72 and environmental activist Steve Keith, who have expressed concerns about unsustainable logging in Maine and other environmental infractions.

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Karan Arkotaram
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The group invited attendees to sign a petition urging the University to support ethical and sustainable investment.

“The only thing we ever hear about the endowment is the rate of return, and we have cases in the past and evidence of investments where Yale profited off of worker exploitation and environmental destruction,” said REP co-founder Hans Schoenburg ’11.

A Yale spokesman could not be reached for comment to respond to the allegations Monday night.

During his presentation, Landino said he and other hotel workers face serious mistreatment by HEI, decrying the wage cuts, excessive workloads and barriers to forming unions he and his coworkers face under HEI’s management.

“The employees of the Long Beach Hilton are suffering a persecution,” Landino said. “I come here and ask you for help so that I can go back and tell my workmates that there will be help.”

By extension, REP leaders argued, HEI’s dangerous and unethical policies boost profit not only for the company but also for the Yale endowment — something that should concern students.

The Yale endowment also logged 350,000 acres of Maine forest purely for short-term gain, REP leaders said. Now, due to overaggressive logging, sustainable harvesting must wait 40 years while the forest recovers, they said.

Lea said he wrote to Yale Investment chief David Swensen GRD ’80 about the dangers of irresponsible logging but did not receive the response he was looking for.

The Investments Office has repeatedly refused to entertain REP’s concerns, Schoenburg said. After attempting unsuccessfully to meet with an investment officer, REP’s case was referred to the Advisory Committee on Investor Responsibility, which addresses questions concerning sustainability and ethics in the Yale endowment.

Schoenburg criticized the committee, saying it does not have sufficient oversight over investments and did not address REP’s complaint.

The Yale endowment’s lack of transparency is another REP concern. Only 3 percent of Yale’s endowment holdings are accessible to the public, while the rest is either entirely undisclosed or is invested through intractable hedge funds or private equity, panelists said.

In the Sustainable Endowment Institute’s endowment transparency report card, Harvard University received a C and Columbia University a B, while Yale received an F.

Yale’s endowment, at $22.9 billion, is second only to Harvard’s, which now stands at $36.9 billion.

Comments

  • Concerned

    Great big wonderful Yale--squeezing bucks out of American labor at the lowest socioeconomic levels in order to support the highest, tax free. And bragging about it (the "return") too. Why can't ethical investing be smart investing? What is the point of creating a green campus that drives the chopping down of New England forests?

  • Moe Skeeto

    The enviro-religious nitwits are at it again. If they really want to improve the environment around New Haven, they would stay in Durham, New Hampshire.

  • Anonymous

    Socially responsible investing is VERY arbitrary. Why not allow Yale to make money and then encourage Yale to use that money for good in the New Haven community? I understand that perhaps this one company has some aggressive business practices -- but if you looked into almost any of the highest-performing companies in America you could find a reason that you shouldn't invest in them.

  • investing

    you are so far from the truth anonymous, you should really do some research. Yale investing currently works on a model developed in the 1970s, but industry has moved quite a bit since then. Ethical/Responsible/Sustainable/Green investing are all quite popular right now and there are numerous possible codes that could be chosen. Plus there is a glaringly obvious code that could be followed, YALES OWN STANDARDS. If yale has stated environmental and labor standards (which even though it may not always follow them, it does, see the office of sustainability and the most recent union contract), why shouldnt it apply those to its investments. It doesnt really make sense for a university to provide social good off of social ill and although defining what qualifies as an "ill" may not be EASY its CERTAINLY not impossible. I dont see why the discussion this group is trying to inspire university wide isn't perfectly appropriate.

  • Mac Herring

    Just because every high-performing company in America does it doesn't mean that it's right. Yale students are smart enough to recognize that, and the Yale Investment Office should be able to, too.

  • Come On

    If someone from the UOC can explain how Yale can maintain its return through their so-called "ethical" investments I would love to hear it. But, until they can come up with a legitimate and workable alternative to Yale's current practices I suggest they start thinking about what Yale initiatives they suggest should be downsized to accommodate their ethics. It bothers me that one year those who sit in complain about a lack of financial aid and the next year they complains about where the money for the financial aid comes from. You can't have both. If the UOC wants to come up with either an equally successful investment plan or a list of expenditures they would be willing to cut I don't want to hear it. Instead of just criticizing the University they should be trying to come up with substantive alternatives. These publicity stunts don't help anyone except those who do the sitting in to assuage their own guilt about accepting Yale's "slightly overworked non-unionized hotel worker money". It is just not a constructive thing to do.

  • Appalled '11 student

    Until I read this I hadn't realized what a Facist institution I was attending. No way can I continue study at a university supported by the exploitation of my fellow human beings. Their sweat and their blood stains all of our hands. I see now that every class I attend only condones the immoral actions of the evil cabal that runs this place. People - while some may tell you to stay and try to change the future when you graduate, the means to that end ultimately corrupts us all. Any person of conscience has no choice but to leave Yale. For where, I'm not sure, but I'm out of here before I am sucked into the abyss. Who's with me? Anyone? Anyone?? Anyone???

  • Exasperated '10

    Then, um, leave. The rest of us, with our own blue-collar labor class parents, are too busy with silly pragmatic things like… keeping a job and getting the education they couldn't afford at my age. But please feel free to pay your premiums for organic free trade soy mush and start a commune by yourself - why wait for others' approval?