Invest responsibly

As commencement draws near, the graduating class prepares itself to become the next generation of Duke alumni. Swarmed with advertisements and pressures to donate, students begin to think about how they will continue to give back to this institution that has given them so much. Some even consider sending their own children to Duke to become part of the legacy. Yet, few students know how their money may be spent or invested.

Over the years, Duke University’s endowment has grown through generous donations from alumni and other sponsors. These funds typically allow the University to provide scholarships, attract faculty and improve research programs. Since 2012, this endowment has consisted of over 4,000 funds with a total worth over $5.6 billion. In order to maximize long-term returns, the University’s endowment is also invested in a variety of assets including stocks, hedge funds, real estate and private equity. Among this large endowment portfolio, an estimated 38 percent ($2.1 billion) is invested in stocks.

Demanding more investment transparency beyond the broad breakdown of the University’s endowment has been difficult because Duke is not required to disclose how it appropriates its funds. Because the endowment is the basis of our University’s expansion and growth, however, advocating for Duke’s investment responsibility is important and has the means of catalyzing corporate social responsibility and promoting systemic change.

One method of ensuring that Duke’s investments are not supporting unethical corporate policies and practices is to engage in socially responsible investing (SRI). According to the Forum for Sustainable and Responsible Investment, SRI requires considering “both the investor’s financial needs and an investment’s impact on society.” Investment responsibility recognizes that high investment returns are not enough to justify a corporate investment if the corporation is practicing ethically questionable acts.

In the past decade, student groups at several universities, including Duke, have begun pushing for more ethical investment practices through various tactics, including divestment. Divestment involves withdrawing funds from corporations supporting or participating in harmful policies. A prominent example is the 2007 Sudan Oil Divestment Campaign, in which Duke divested funds from corporations supporting a Sudanese government committing crimes against humanity.

Universities can also file either a shareholder resolution, which requires corporations to take action if 50 percent of the shareholders vote in favor of the resolution, or a “proxy-vote” resolution, which commits the university to voting a particular way if a shareholder resolution is eventually filed. In 2012, the Coalition for a Conflict-Free Duke was successful in committing Duke to voting in support of conflict-free electronics supply.

These examples show that the Duke student body and administration has taken an active stance on key social issues through the use of selective investment. Unfortunately, the lack of both investment transparency and student knowledge of responsible investing may make it difficult to know whether our vast endowment funds are supporting ethical practices.

Coming together as a student body in collaboration with Duke faculty and alumni can help to spread the word about responsible investments and put pressure on the administration to engage in SRI. Duke’s role as a leader in the international community presents the perfect opportunity to advocate for change. Leveraging Duke’s reputation could set a precedent for other universities to take interest in the impact of their investments. If we as shareholders agree to hold Duke accountable, then maybe the institution will have a reason to desire change.