This week is Sustainability Week at Tufts. Over the next several days, a variety of events and discussions will address issues concerning environmental sustainability, social justice and campus greening. This presents a great opportunity for Tufts students to learn and think critically about environmental issues and to begin taking action towards creating a healthier planet.
Sustainability Week will also provoke discussion about how Tufts University as an institution can move towards greater environmental sustainability. On Thursday at 1:30 p.m. in the Lincoln Filene Center's Rabb room, several speakers will lead a panel on "The University's Role in Corporate Responsibility." Much of this conversation will focus on Tufts' $750 million endowment, most of which is currently placed in the hands of outside money managers, including hedge funds. These money managers invest the endowment in hundreds of corporations, and Tufts profits from the resulting returns.
Tufts' 2003 tax forms, which can be found online at guidestar.org, list all the companies managing the University's investments. However, the financial transparency disappears at the level of the money managers. Where exactly are these companies investing Tufts' endowment? There is good reason to believe that many of these investment decisions are being used to support corporations with questionable social and environmental records.
In 2003, for example, Tufts had over $9 million invested through Farallon Capital Management, L.L.C. Farallon is a hedge fund that has been directly linked to a 1994 venture to pump water from an aquifer in Colorado despite the opposition of local residents. Fears abounded that that this project would dry up hundreds of thousands of acres of croplands and destroy the surrounding ecosystems. Farallon eventually abandoned the water venture, but not before turning a 40 percent profit on its original investment.
Farallon has also been connected to investments in oil companies in Russia and natural gas companies in South America. Tufts has pledged to meet the emissions targets of the Kyoto Protocol on climate change, yet its endowment dollars through Farallon may very well be supporting the fossil fuels that spew tons and tons of carbon dioxide into our atmosphere every day. Such a prospect is disturbing and should be unacceptable to the university.
Tufts' $9 million investment in Farallon represents only a small fraction of its total investments. According to Tufts' 2003 tax forms, the university had over $346 million placed in various companies, including $85 million in EIM and $36 million in Adage. Where is this money going? Who are these companies, anyway? We don't know. Concerned students have helped reveal some of Farallon's shady dealings, but in general the public is left in the dark regarding the practices of faceless hedge funds and other money managers.
According to Tufts' Chief Investment Officer Sally Dungan, the university has made a conscious decision to not concern itself with where its money managers invest its endowment. This, Dungan says, will ensure that Tufts continually maximizes its returns. However, according to a Public Perceptions of University Endowments study by the Goldman Sachs Global Markets Institute, 75 percent of donors surveyed agreed that "University endowments should only invest in funds that disclose which companies they invest in, because endowment donors deserve to know how their donations are being invested."
Given this statistic, it is noteworthy that several of Tufts' peer institutions, including Harvard, Dartmouth, Williams, and Columbia, have advisory committees (with student representation) dedicated to shareholder responsibility, and that Harvard and Dartmouth make their shareholder voting records available to their school community and to the public. None of these universities seem to be suffering for lack of investment returns as a result, and Tufts should follow in their footsteps by disclosing its investments and adopting socially responsible practices.
Tufts' investment decisions have far-reaching impacts beyond Medford and Somerville, so the University has a responsibility to ensure that the companies investing its endowment do not contribute to destructive practices both domestically and abroad. By drafting shareholder resolutions expressing concern about social and environmental issues, voting its conscience on existing shareholder resolutions and questions instead of voting with management by default, and prioritizing socially responsible businesses with future investments, Tufts can and must leverage its financial power to steer money-managers and corporations in more sustainable directions.
Similarly, Tufts must also consider the impacts of its purchasing decisions. Currently all the electricity Tufts uses is generated by burning fossil fuels. We can do better. Tufts' student group Environmental Consciousness Outreach (ECO), of which I am a member, is currently running a campaign to get the University to purchase some of its energy from wind power, which is clean, renewable, and does not contribute to climate change. Over fifty schools nationwide, with the support of environmental non-profits like EnviroCitizen, have run such campaigns, playing an active role in the growing student movement for clean energy.
Will Tufts continue with business as usual, or will it use its financial clout to advocate for social and environmental change? The power of universities to reform corporations should not be understated. In 2002, Swarthmore College in Pennsylvania initiated a shareholder resolution urging the defense contractor Lockheed Martin to bar discrimination based on sexual orientation. Under pressure from Swarthmore, Lockheed Martin adopted the resolution as official company policy.
Tufts could certainly work towards similar goals regarding social and environmental responsibility. Continued investments in practices that contribute to environmental destruction and climate change threaten our health and security and ironically make our financial future even less certain. Our dollars should not be blackened with the soot of fossil fuels. Instead, they must shine green as we move towards greater environmental sustainability.
Aditya Nochur is a sophomore majoring in environmental studies and biology.
