The Advisory Committee on Investor Responsibility, which recommends University investment policy changes, will deliberate Yale’s stance on investing in electronic nicotine delivery systems and other policies related to private prison investments, according to Jonathan Macey LAW ’82, committee chair.

The committee’s discussions regarding e-cigarette and private prison divestment come just a few months after the University announced its new policy against investing in assault rifle retailers. Under the recommendations from the 1972 manual “The Ethical Investor,” the committee drafts recommendations for Yale’s investment policy based on whether or not the institution in question causes a “grave social injury.” The advisory committee reports to the Corporation Committee on Investor Responsibility, which votes on the final resolution.

“We will continue to engage with the students who engage with us and try to be as responsive as possible while remaining faithful to our guidelines as articulated in ‘The Ethical Investor,’” said Macey.

In June 2018, the Yale Corporation adopted new proxy voting guidelines for investment issues relating to private prisons. The guidelines outline that the Corporation will “support reasonable and well-constructed shareholder resolutions related to improvements in the corporate social responsibility of private prisons.” Some examples of resolutions that the Corporation would support include those seeking disclosure from private prison companies about political contributions and also those requiring prisons to outline their efforts in reducing sexual abuse in prisons. The Corporation would also support resolutions that request private prisons to evaluate their effectiveness in reducing violence and use of force.

Shareholders of publicly-owned companies can propose resolutions about ethical issues to be voted on by all company shareholders. When these resolutions come before shareholders of private prisons in which Yale is invested, the advisory committee will act as the proxy voter for Yale.

For years, student activists have advocated for the University to divest from private prisons. But in a March op-ed in the News, Chief Investment Officer David Swensen argued that the endowment has no current exposure to private prison management companies.

In 2005, the advisory committee issued a public statement defending Yale’s investments in CoreCivic — a company that owns and manages private prisons and detention centers, stating that the company’s actions did not cause any such “grave social injury” that would necessitate divestment.

Macey told the News that the advisory committee has “been in contact with Yale Students for Prison Divestment” — a student group that has long advocated for Yale’s prison divestment — as the committee continues to consider potential shareholder resolutions.

But Daniel Yadin ’21, a member of Yale Students for Prison Divestment, argued that any investment in private prisons constituted a “grave social injury.” But Macey echoed Swensen’s remarks, saying that Yale has no exposure. The advisory committee could still consider whether or not to formalize a policy against investment in private prisons, Macey added.

“In the coming months, we think that more transparency from the administration is absolutely critical, and, if private prisons are seen as an acceptable investment for our University despite rampant human rights violations, we would like the committee to make a public statement explaining its commitment to its decision,” Yadin said.

Three other student divestment activists interviewed by the News expressed similar frustration as Yadin, saying that communication with the advisory committee proved difficult.

Since the Yale Students for Prison Divestment and the advisory committee began meeting three years ago, the process of establishing meetings has been “incredibly slow and bureaucratic,” according to Joseph Gaylin ’19 a member of Yale Students for Prison Divestment. Gaylin added that the advisory committee seems to be a “body used to insulate the Corporation from criticism” as opposed to a body that communicates the concerns of the Yale community.

In response to the criticism from the Yale Students for Prison Divestment, Macey agreed that the process of meeting with many student groups is slow and collaborative in nature. However, he added that the advisory committee is making active efforts to meet the student body and will be meeting members of Yale Students for Prison Divestment on Tuesday.

In spring 2017, the advisory committee elected not to recommend that Yale divest from Exxon Mobil Corp., the world’s largest oil and gas company, after a yearslong Fossil Free Yale campaign against investments in the company.

“In 2016, Jonathan Macey and the rest of the committee recommended strongly that we pursue divestment from Exxon specifically on the grounds that they engage in climate denial,” said Nora Heaphy ’21. “After we spent a year researching and working with the advisory committee on this, they rejected the proposal. We found out later that the advisory committee met with Exxon executives before deciding not to endorse divestment from Exxon.”

Macey said that the advisory committee would have recommended divestments from Exxon Mobil if the company had continued to deny climate change, but Exxon no longer denies its existence.

In response to student activists’ complaints, Macey said he hopes to see more involvement by members of the Yale community and increase participation in the recommendation process. Steven Tian ’20, the new undergraduate representative on the advisory committee agreed, saying that he looks forward to working with student advocates to advance investor responsibility at Yale.

The advisory committee was created in 1972.

Jever Mariwala | jever.mariwala@yale.edu