What is the ACIR and what is its purpose?
The Advisory Committee on Investor Responsibility (ACIR) exists to support and advise the Corporation Committee on Investor Responsibility (CCIR), a standing committee of the Board of Trustees (formally known as the Yale Corporation).
The CCIR makes recommendations to the Board of Trustees on matters relating to Yale’s policies on ethical investing. The CCIR also provides policy guidance to the ACIR and to Yale Investments on the voting of proxies on shareholder resolutions on matters relating to ethical issues.
The ACIR is composed of two students (one undergraduate and one graduate), two alumni, two faculty, and two staff members. The committee meets regularly to consider ethical investing issues brought to it by members of the Yale community. It also evaluates shareholder resolutions on ethical and social issues and makes proxy voting recommendations in accordance with the CCIR’s guidelines.
Where can I go to learn more about the proxy voting guidelines that are in place?
The university has in place general proxy voting guidelines, which you can find here, as well as more specific guidelines for certain topics.
How can members of the Yale community raise issues related to ethical investing with the ACIR?
The ACIR engages directly with the Yale community through its annual open meeting. The open meeting allows stakeholders to give presentations and to hear from each other. It also allows the ACIR to educate the community about Yale’s longstanding approach to ethical investing.
Members of the Yale community are also welcome to contact the ACIR via e-mail (ACIR_Inquiry@yale.edu). Regardless of how requests are received, the ACIR considers all issues that are brought to the committee from the Yale community.
How are divestment policies adopted?
From time to time, members of the Yale community bring to the ACIR concerns about a set of companies or a particular type of investment that they believe should not be eligible for investment by the Endowment. The ACIR is required to consider all such requests through the lens of The Ethical Investor. By applying this longstanding framework, the ACIR plays an important role in enabling the university to follow a consistent approach to investor responsibility that recognizes precedent and principles that have been in place for decades.
After initial review, the ACIR may hire research support and engage external experts. It may also provide interim updates to the CCIR. Depending on the nature of the topic, this process may take several months or more to complete. If, after careful study, the ACIR believes an investment should not be eligible for the Endowment based on the guidelines set forth in The Ethical Investor, it will make a recommendation to the CCIR. The CCIR will review the proposal and make its own determination as to whether to recommend it further to the full Board of Trustees. If it is adopted by the Board, such investments will no longer be eligible for investment by the Endowment and if it is in the portfolio already, such investments will be divested (subject to legal restrictions). Divestment policies must be adopted by the full Board to become effective.
Does the adoption of a divestment policy mean the Endowment actually held the investment?
Not necessarily. Rather, when the university adopts a divestment policy, it means that such investments are no longer eligible for investment by Yale. Thus, if it is in the Endowment portfolio, it will be divested (subject to legal restrictions); if it is not in the Endowment, it will be prohibited from being added in the future.
How does the ACIR decide when to recommend a divestment policy?
The Ethical Investor sets a very high bar when it comes to adopting a divestment policy. Accordingly, divestment is a last resort reserved for exceptional circumstances, when a company’s direct activities cause “social injury” (defined below) of grave character and all other attempts to stop the injurious activity have failed. Even then, The Ethical Investor and CCIR precedent indicate circumstances in which a policy would not be adopted. The issue should reflect broad consensus within the academic community, and action should not be taken if it could impair the capacity of the university to carry out its educational mission such as by causing deep divisions within the community. The Ethical Investor further clarifies that divestment should not be used for general social reform, political advocacy, or if government action is more effective to address the problem.
How is “social injury” defined?
According to The Ethical Investor, “social injury” is defined as:
“the injurious impact which the activities of a company are found to have on consumers, employees, or other persons, particularly including activities which violate, or frustrate the enforcement of, rules of domestic or international law intended to protect individuals against deprivation of health, safety, or basic freedoms; for purposes of these Guidelines, social injury shall not consist of doing business with other companies which are themselves engaged in socially injurious activities.”
Divestment can only be considered if such social injury is grave in character and if other conditions are met. See the policies and past actions tab for a complete list of instances when a policy of divestment was adopted.
Why are ACIR deliberations confidential?
The ACIR’s deliberations are confidential because the ACIR exists to support the work of the CCIR. In cases where the ACIR’s discussions lead to a formal recommendation to the CCIR and policy adoption by the Board of Trustees, the community will be informed. The communication may come from the Board of Trustees, the CCIR, or the ACIR. In cases where the ACIR does not recommend any action, it will inform the petitioner who made the original request.
How are members of the ACIR selected?
The ACIR is composed of faculty, students, alumni, and staff. Members are selected by the Office of the President. Student members typically serve two year terms while other members may serve longer; however, all serve at the discretion of the Office of the President and the CCIR.