By

Maggie ThompsonContributing Writer

Two weeks ago The Mac Weekly published an article by Jakob Wartman that addressed the current state of Macalester’s endowment (“An Exegesis of the Endowment,” Nov. 11, front page). The article mentioned the issue of socially responsible investing, but did not fully cover it.

According to the Social Investment Forum, socially responsible investing (SRI) is “an investment process that considers the social and environmental consequences of investments, both positive and negative, within the context of rigorous financial analysis.” More simply, at Macalester it would mean ensuring that the college’s investments are consistent with its values. It would also contribute to the long-term financial stability of the college. Socially responsible investment would diversify our endowment portfolio and help ensure its sustainability, which, as Wartman’s article pointed out, is a major concern for the college.

The assumption that socially responsible investments generate a lower rate of return than traditional investments is as untrue as it is shortsighted. Several socially responsible stock indexes have matched or out-performed their traditional counterparts. The Domini Fund gave a higher rate of return than the S&P 500 (the main index in which Macalester’s endowment is invested) even during the market boom of the 1990s.

Considering the philosophy behind socially responsible business practices, it makes sense that companies that operate this way are successful in the long-term. Companies that treat their workers fairly avoid costly lawsuits, and firms that reduce their use of fossil fuels save money. A business with good practices builds relationships with its workers, community, and customers that contribute to its success.

SRI can have a significant impact on the way business is conducted, on the environment, and the well being of people around the globe. Numerous initiatives have demonstrated that changing investors’ habits can influence business practices.

Wartman’s article notes that Harvard and Stanford (among others) have divested from PetroChina, a company that has been funneling money to the regime committing genocide in Darfur. In the article Professor Daniel Kaplan estimates that only $10 to $20 of Macalester’s endowment supports PetroChina. It is only an estimate because information on what stocks the endowment holds is not readily accessible to members of the community at large. It seems unlikely that Macalester would own only a fraction of one share in PetroChina. We would like to hear from the administration how many shares in PetroChina Macalester holds, and invite further discussion. Refusing to contribute to companies involved in atrocities such as genocide is consistent with the

values of our college.

In addition to screening investments, we can influence the management of companies through shareholder advocacy, in which shareholders vote on proxies that address specific concerns of the company. For example, Amnesty International is running a campaign with Dow Chemical shareholders to require the company to take responsibility for a gas leak in India that resulted in the deaths of more than 22,000 people.

Shareholders need only pay attention and vote according to their values. Macalester is ahead of the game in that it pays an outside firm to research these issues and recommend how to vote on proxies, but the larger college community is not a part of this process.

Evaluating our institutional accountability presents a valuable educational opportunity for students. Moral concerns are almost never clear-cut, and although it is sometimes difficult to come to consensus around certain issues, the debate itself is key. Social responsibility not only entails pulling money away from what we don’t believe in, but also investing in ventures that we support. This concept is not limited to our endowment.

We have the opportunity to use our operating funds (essentially the college’s checking account) to invest in our city by moving these funds into a bank that works for community development. The majority of Macalester’s operating funds, approximately $65 million, are now deposited in US Bank. These funds would better serve the area if they were held in a local community bank, like Western or University, which lends to low-income communities and minorities. With a significant institutional effort, we can use our money to promote community-based economic development.

Through socially responsible management of our money, Macalester can be a leader among colleges across the country by innovating new ways of supporting our community, and putting our money where our mouth is.

Contact Sandy Robson ’08 at [email protected], and Maggie Thompson ’07 at [email protected].