The Board chose the companies based on the review of research completed by various external institutions. For example, College staff explored company lists created by non-governmental organizations who support divestment, such as other divesting universities, in conjunction with reports produced by Institutional Shareholder Services (ISS).
Amherst is one of many institutional clients that enlist ISS to investigate the activities of companies in which they have investments. In recent months, several clients of the ISS have requested information relating to the genocide in Darfur. Consequently, the ISS now maintains reports on various international corporations that are conducting business in the Sudan.
The College will now periodically review analyses of corporations that are active in the Sudan. No funds have been actually divested because the College does not possess direct investments in any of the 19 companies that were identified as having business ties either directly to the Sudanese government or companies whose business activities are directly related to the Sudanese government.
The companies that were identified by the Board are largely oil, gas and telecommunications industries. ABB Ltd., Alcatel SA, PetroChina, Sinopec, Royal Dutch Shell and Siemens AG will likely be most impacted by the College’s decision. In fact, little of the College endowment is directly invested. Rather, managers who coordinate large pools of funds invest the greater part of the endowment without consulting the Trustees. Because the endowment comprises a small part of this large pool of funds, the investment preferences of the College cannot regulate the actual investment of the pool. The College will, however, communicate its decision to its external investment managers in the hopes that they will take the College’s decision into consideration in investment through Director of Investments Mauricia Geissler.
Chairman of the Board of Trustees Jide Zeitlin ’85 said that the communication may affect investment decisions of those outside of the College as well. “[The decision] may cause third-party managers to think more broadly before making investment decisions and, as other investors also divest, fund mangers may begin to proactively screen the types of companies in which they invest,” he said. The College’s third-party fund managers have invested in a limited number of the banned companies, although it is difficult for the administration to determine exact amounts. Thus the College endowment is “indirectly exposed” to a subset of the banned companies, a relation that the Board would like to end through “disinvestment.”
In addition to divestment, the Board supports other forms of activism by the College community. Zeitlin points out that the Board took note of the recent petition of approximately 40 members of the College faculty to TIAA-CREF, the largest retirement fund for university faculty members in the United States, which may have investments in some of the 19 banned companies. Although it is nearly impossible to obtain a current record of TIAA-CREF investments, it is well known that in the past the retirement fund had invested large quantities of money in ethically questionable companies.
Amos Irwin ’07, leader of the student-run Sudan Divestment Project, explained that about five years ago TIAA-CREF divested from Talisman Energy, a Canadian oil company that was linked to the war in Sudan. “Some other investors divested as well, the share price dropped 35 percent, and Talisman sold their interests in the Sudan,” he said. Concerning the 40 letters mailed by individual faculty members in December, TIAA-CREF has stated that its Board of Directors is currently considering the issue.
The Amherst College Trustees believe that students can and should play an active role in the College’s response to the situation in the Sudan. “We’ve encouraged students to work with peers at other institutions to develop collaborative responses,” said Zeitlin. “It’s best to have additional actions bubble up from the student level. If students across a number of colleges and universities come together and garner the support of these other institutions, the Board is prepared to work with them on further actions.”
Much of the divestment process involved the support of a student initiative. Zeitlin said that students initially brought the issue to the Trustees. “We sat down with the students and were with the students, if not out in front of them, very quickly; very quickly thinking of ways to move this forward, as a Board that believes that what is going on in the Sudan is extraordinary in a negative sense, and that it is not consistent with Amherst College’s values,” he said. “This is a statement about our College’s values and an educational opportunity for the students.”
Currently, only a few universities have officially divested from companies that support the Sudanese government. Those institutions include Stanford and Harvard Universities, Dartmouth College and now Amherst.
Eric Reeves, Smith College professor and expert on the Sudan and divestment action, commended the College’s action last week. “Amherst is remarkable,” he said. Reeves referenced the broad and powerful divestment statement that the Board of Trustees has made, in comparison to the various technicalities that appear in other resolutions.
Four other universities in particular are swiftly nearing official divestment, including the University of California, Brown, Yale and Brandeis Universities. Approximately a dozen more universities have student groups working towards divestment, and Reeves believes that both Smith and Mt. Holyoke College ought to be easily incited to divest now that Amherst has done so.
President Tony Marx discussed Amherst’s involvement compared to other institutions’ involvement. “We tried to be more public and rigorous in the criteria we were applying, and we acknowledge that there is more work to be done, that this should not simply be a symbolic end to our engagement on this issue,” he said.