Academic Years 2019-21 Review

Over the course of the past two academic years, the ACIR held a number of meetings, including the annual open forum in December 2019 and in December 2020. The annual open forum provides an opportunity for the members of the Yale community to express concerns or raise questions related to the ethical investment of Yale’s Endowment.

Following the adoption of the Fossil Fuel Investment Principles by the Yale Board of Trustees in April 2021, the ACIR was tasked with implementing the Principles. The Committee submitted recommendations to the CCIR that coal producers and certain oil & gas companies no longer be eligible for investment by the Endowment which the CCIR and the Yale Board of Trustees approved.  See here.  The ACIR investigated incarceration practices of private prison companies and sought information from a faculty member on the health effects of the prison system.

The ACIR continued to monitor Yale’s Sudan divestment list.

The Committee continued to review and vote on the University’s social responsibility proxies in accordance with the University’s ethical investment policies, including the guidelines set forth in John Simon’s The Ethical Investor.

Calendar Years 2019-20 Voting Overview

The ACIR votes social and ethical proxies on behalf of the University in accordance with existing University policies and under the guidance of the CCIR. The ACIR is composed of representatives from the University alumni, staff, faculty, graduate and undergraduate student communities. The CCIR is a standing committee of the Yale Corporation.

Guided by the principles of John Simon et al., The Ethical Investor (1972), and related policies and practices adopted by the University, in particular the “Statement on Proxy Resolutions,” adopted by the Corporation in 1989 and updated in 2013, the ACIR considers proxy resolutions and determines whether it is appropriate for Yale to take a formal position on a social or ethical issue through its role as corporate investor.

Votes affirmatively supporting proxy initiatives must be preceded by a determination that the issue involves one of substantial social injury caused by the company; the issue is susceptible to competent evaluation by the University under criteria reflecting broad moral consensus within the academic community; and the proposed resolution seeks to eliminate or reduce the social injury by means which are found to be reasonable and effective. A proposal will not be supported where the resolution embodying the proposal fails to be well-constructed or appropriately tailored to reduce or eliminate the injurious aspect of the activity (e.g., is over-inclusive or is merely a condemnation).

In addition, proxy initiatives will not be supported where the resolution would impose a serious competitive disadvantage on the company in relation to other companies in the same industry which are engaging in similar social injury; the resolution advances a position on a social or political question unrelated to the conduct of the company’s business or the disposition of its assets; the activity in question neither violates nor frustrates the intent of governing laws and regulations that represent a balance struck in the context of competing political influences in a democratic society; or, if the activity is unlawful, it is already or will imminently be the subject of legitimate legal processes.

In the event that the Corporation or CCIR has provided specific guidance with respect to voting on a particular issue (e.g., tobacco, climate change, private prisons), the ACIR will follow that guidance. In addition to reporting the ACIR’s proxy votes to the CCIR on at least an annual basis, the ACIR brings to the CCIR’s attention any social or ethical matter requiring more specialized voting instructions.

In calendar years 2019 and 2020, the ACIR considered and voted on proxy resolutions consistent with the principles described above in corporate political activity, environmental practices, equal employment, and human rights.  The ACIR does not vote on proxy resolutions addressing corporate governance or other matters not involving social or ethical issues. These proxies remain within the purview of the Investments Office, with oversight by the Investment Committee.