This May, 62 percent of ExxonMobil shareholders voted in favor of the company reporting the impacts of climate change on its business. In 2016, shareholders of Fluor, a major global engineering firm with over $19 billion in annual revenue, voted to require the company to formally report all of its political contributions. Yet, due to the $5 billion Rice University endowment’s sole focus on investment-picking, had it been an investor in either of these companies, it would have abstained from these votes, a de facto vote against these proxy resolutions for positive social change.
This is a problem. To be clear, the hard-working people who manage Rice’s endowment are not at fault. As the Thresher has previously reported, the endowment provides half the university’s annual operating budget, so ensuring the endowment makes enough money to keep Rice running is — and should be — its only priority. Instead, Rice desperately needs a separate committee of representative individuals who can recommend votes on the important moral and social issues that arise at companies Rice invests in.
I have been working on creating such a committee at Rice since the spring of 2016. There has been significant progress, including a show of support from President David Leebron, contingent on Student Association and Faculty Senate support. While I expect most of the Rice community will have no qualms about this idea, I do understand that the past year has been filled with vigorous debate about whether Rice should play any role in social and political issues. I also understand the potential concern that such a committee could never represent the diversity of social and moral views on this campus, and that it could even further marginalize the conservative voices that do exist at Rice. I hope I can allay these fears and convince you that a Responsible Investment Committee is necessary.
So why ought Rice become involved in the affairs of private corporations in the first place? One of the basic tenants of human morality is that if we see harm occurring (example: a potential robbery) and we have the ability to stop that harm (call the police), then we should take action and attempt to stop the harm. This is what Yale University calls their “Basic Policy”. As a stockholder in a corporation, if Rice has the ability to use its proxy votes to prevent harm caused by that corporation, then it has a moral obligation to cast those votes. Such a policy would be the backbone of the RIC.
What is key about this policy that would address the potential concerns previously mentioned, is it also imposes limitations on the RIC. The policy is narrow by nature — any resolution that goes beyond stemming social harm and into abstract political statements would be in violation. The RIC would not be a political forum; it would instead focus on pushing companies toward taking action that would enable real social change.
Take the Exxon climate resolution, for example. The RIC would analyze available evidence and determine whether actions taken by Exxon (the production of greenhouse gas emitting hydrocarbons) have or have not caused harm. It would then conclude on a proposed solution — Exxon reporting the effects of policies limiting climate change to 2C on its business — that might solve that harm and then vote accordingly. Of course, these are still subjective decisions, but the Basic Policy will provide a strong framework that helps the RIC make more objective and less political decisions.
On Monday, the SA was presented a resolution regarding the creation of the Responsible Investment Committee. While the creation of a committee dealing with financial proxy resolutions may seem boring and bureaucratic, Rice’s endowment is likely the strongest short-term form of influence at this university (money talks, people listen). I hope that you will reach out to your college presidents and senators and show support for this resolution that will help contribute to the bettering of our community and our world.