On October 27th, the Sustainable Endowment Institute published its “College Sustainability Report Card” awarding Brown University straight A’s, tying it for first in the nation. Among the categories graded were endowment transparency, investment priorities, and shareholder engagement. The letter attached below explains why we feel these grades are very misleading and problematic.
Dear Sustainable Endowment Institute,
As members of Brown University’s Open the Books Coalition for a Responsible Endowment, we are writing to you about the “A” grades Brown University received in endowment transparency, investment priorities and shareholder engagement. We believe that the Sustainable Endowment Institute is pivotal in keeping our university accountable for its investment policies. Therefore, it is of utmost importance that the Green Report Card accurately reflect Brown University’s investment practices. For a number of reasons, the Green Report Card fails do so.
In the first place, Brown’s committee in charge of making proxy votes hasn’t made a proxy vote in two years, since the University liquidated its direct stock holdings. It is clear that proxy votes are no longer a useful measure of Brown’s shareholder engagement or even of Brown’s investment priorities and endowment transparency. Furthermore, while proxy voting is an essential role for the socially responsible investor, the emphasis that the Sustainable Endowment Initiative gives it (one third of the survey relates to proxy voting) is unwarranted. As a whole, academia’s investment strategy has shifted almost entirely to putting endowments in the hands of external money managers.
Beyond the flaws of the emphasis of the questionnaire, there are a number of ways in which the university’s investment policies are misrepresented. Another section of the questionnaire asks universities to self-report if they have any investment policy provisions or use any investment managers that consider environmental/sustainability factors. Aside from the fact that this self-reporting is completely unverifiable for universities like Brown, whose actual holdings are entirely opaque, these investments are often little more than token funds. At Brown, for example, the Social Choice Fund, which meets these requirements, currently stands at $1.54 million dollars. This may sound like a lot of money, but it represents only 0.07% of Brown’s $2.2 billion endowment. Considering that it took two years of serious organizing to create this tiny fund, receiving an ‘A’ from the Sustainable Endowment Initiative for investment priorities seems like a joke.
Finally, SEI’s grading mechanism for endowment transparency seems entirely baffling when examining the actual descriptions of disclosure. Take, for example, a comparison between one of the lowest and one of the highest ranked schools on the Green Report Card. According to SEI, Wichita State University, just like Brown University, makes a list of all holdings available to trustees and some senior administrators while only asset allocation is made available to the general public. In fact, the only difference in the two schools is that Wichita State University does not make its shareholder voting record public, while Brown University makes these records available only to the school community. Considering that Brown no longer makes any proxy votes, we believe that the difference in grade between the two schools (an ‘A’ for Brown and an ‘F’ for Wichita State) is absolutely preposterous. Even Columbia, which actually discloses more information than Brown (making a list of equity holdings available to all school community members), bizarrely received a ‘B’ in the face of our ‘A’ grade. Moving away from comparisons, though, we question how a university like Brown could get an ‘A’ for endowment transparency in the first place. Brown University has such opaque investments that in many cases not even the Chief Investment Officer knows which companies we are invested in, thanks to the nondisclosure policies of many of our external money managers. As students, we have no idea what our university is invested in, which is incredibly frustrating, and has long been a point of contention.Overall, we think that the Sustainable Endowment Initiative uses questionable grading policies that do not accurately measure transparency if a university like Brown can receive an ‘A’ grade.
As students committed to promoting responsible investment policy, we would like to initiate a discussion about your grading policy. We think this dialogue is essential, not only because we believe our own university was misgraded, but also because we recognize the importance of the Green Report Card as a tool for holding our universities accountable for being truly responsible investors. We thank you in advance for beginning this conversation with us, and look forward to your response.
Sincerely,
Open the Books: Coalition for a Responsible Endowment
Brown Students for a Democratic Society
Brown Student Labor Alliance
Brown Students for Justice in Palestine
Brown Immigrants Rights Coalition
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Brown Students for Justice in Palestine begins Israeli Apartheid Week with an installation on the Main Green this week, in preparation for their official launch on Wednesday, “Education without Occupation.” Check out the rest of the week’s events here. 
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Brown President Ruth Simmons served on the board of Goldman Sachs for ten years until just recently, a position that earned her over $300,000 a year and illustrated the increasing corporatization of the University. Simon Liebling B2012, who is a member of the Open the Books Coalition spotlighted this conflict of interest in December in a column for the Brown Daily Herald, demanding that Simmons no longer associate Brown with the “single starkest symbol of corporate greed to emerge from the recession.”
Simmons resigned from the board a mere two months after Liebling’s column, and today is subject of a New York Times article, Goldman Sachs is described as a lurking bogeyman on Brown’s campus.
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On Saturday morning, the Brown Corporation convened for a closed general body meeting, where far from the prying eyes of the Brown community and without the input of any students, they managed to hike Brown tuition 4.5%, among other decisions. However, they did it to the raucous horns, speeches, and marching of a rally outside, capping off a weekend of education and protest organized by the Open the Books Coalition to fight for democratization of University governance and ethical, open investing.
“When you’re on a plane, you let the pilot fly and you sit in the back,” a Corporation member told Coalition member Will Lambek on Saturday, as way of explanation for the silencing of student voices on the Corporation. Earlier that morning, Lambek and several other Coalition had assembled to give letters and attempt to converse with the Corporation members as they entered the meetings.
In response, Lambek said to those assembled:
“We have to reject the notion that other people know better than we do what sort of values this University has and how those should be represented by our endowment and investment.
“The school belongs to those who live here, those who work here, those who study here — that means students, faculty and staff.”
Read more about the rally in the Brown Daily Herald.
Coalition members Julian Francis Park B2012 and Maryam Alkhawaja GS speak to a Corporation member after the meeting, and agree on the need for further open dialogue.
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The Corporation is Coming!
The Open the Books! Coalition was formed by concerned students and student groups to demand that Brown University create an open endowment that encourages open and ethical investment practices.
The few companies that we know Brown has been invested in—which we had to find out second-hand—are abusive and irresponsible in the extreme. We can only imagine what this says about the rest of Brown’s confidential portfolio.
As students and members of the Brown community, we are complicit in all forms of abuse and exploitation funded by our tuition and the endowment.
We must have an OPEN and JUST endowment that allows students and other members of the community to hold the Brown Corporation accountable for its investments.
This weekend the Brown Corporation has its private, bi-annual meeting and the decisions they make—over which students have no sway and the minutes of which are only made available 50 years after the fact—have a profound impact on whether Brown lives up to the socially responsible image it espouses.
Come learn more about Brown investments at the PANEL DISCUSSION Friday and then come make your voice heard at the RALLY on Saturday!
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Brown University’s investment portfolio is kept completely secret from the Brown community, which means that we have no power to ensure that our investments are just and ethical. The existing bureaucracy that advises the University on responsible investment practices operates without access, information, enforcement power or transparency. The few companies that we know Brown has been invested in—which we had to find out second-hand—are abusive and irresponsible in the extreme.
By luck and word of mouth, we know that Brown is invested in a HEI Hotels and Resorts, a company whose daily operation depends on the appalling mistreatment of workers. What’s more, workers’ attempts to organize a union to protect themselves from HEI’s systematic abuse have been blocked by harassment, intimidation, and illegal anti-union tactics from the company’s management. The Student Labor Alliance has been organizing concerned students for the past two years to demand that the University divest from HEI to relieve Brown’s complicity in the exploitation of hotel workers and take a stand in support of HEI workers’ union-organizing efforts.
Meanwhile, Brown Students for Justice in Palestine is dedicated to ending Brown University’s investments in companies that profit from the Israeli occupation of the Palestinian Territories and facilitate or undertake acts of violence against Palestinian and Israeli civilians. As part of a global solidarity movement taking up the Palestinian call for Boycott, Divestment, and Sanctions (BDS), Brown Students for Justice in Palestine calls on our University to stop funding violations of human rights and international law in the Occupied Palestinian Territories.
As it stands, we have no way of identifying the other companies whose exploitative labor practices are funded by Brown’s endowment. Nor can we identify those companies whose profits depend upon international violations of human rights.
Without an open and transparent endowment with democratic procedures for voicing the ethical concerns of an informed community, we have no way of preventing our tuition and Brown’s endowment from funding companies that contribute to grave injustice on a local and/or global level.
Please join us in demanding an open and just investment!
Open the Books: Coalition for a Responsible Endowment
Students for a Democratic Society
Student Labor Alliance
Students for Justice in Palestine
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