Student-Led Divestment Initiatives Drive Change on College Campuses
Recent examples of campus activism have shown us what students can accomplish. On Feb. 6, 2020, Georgetown University Board of Directors announced that the university would divest from public securities and private investments “of any company whose primary business is the exploration or extraction of fossil fuels, including all forms of coal, oil, and natural gas” amid pressure from student activists and other organizers. A year earlier, in 2019 Fossil Free Cal students influenced the University of California system to announce a plan to end fossil fuel investments.
As part of the anti-apartheid struggle in the mid-80s, students at the University of Texas at Austin (UT Austin) advocated for divestment from companies with holdings in South Africa. Divestment was not pursued by The Board of Regents, as former president of UT Austin William Cunningham argued that it would have cost the university about $30 million. However, President Cunningham acknowledged students’ impact reflecting, “over time… the corporations that we had invested in had largely begun to pull out… and I think it’s a result of what happened at UT Austin and all the other schools around the country.”
In 2008, a student group called the White Rose Society pressured the University of Texas/Texas A&M Investment Management Company (UTIMCO) to divest from Sudan, but the company opposed the action. UTIMCO manages the largest public endowment fund in the nation for the University of Texas and A&M Systems. The university system, however, is not subject to Texas’ Sudan Divestment Act of 2008, which keeps a running tally of “worst of the worst companies” that fuel genocide and prop up repressive regimes in Sudan.
As Bruce Zimmerman, former CEO of UTIMCO, commented in 2011, “We don’t take social or political concerns into account… That’s not our mission. Our mission is to provide resources for the UT system to promote learning and teaching.”
According to the 2019 Deloitte audit of the Permanent University Fund, UTIMCO, held approximately $37 million worth of debt and equity securities of 16 different weapons manufacturing companies. To make matters worse, last year’s audit revealed that UTIMCO added Raytheon – an additional weapons manufacturer – to its investment portfolio.
As of Aug. 2020, UTIMCO holds approximately $52.5 million worth of weapons and weapon systems manufacturer’s debt and equity securities. These investments go against the UT System’s mission to “improve the human condition in Texas, our nation and our world.” Furthermore, they go against UTIMCO’s stated commitment to “eradicate poverty” and “advance society.”
UT Austin received a 0.75 out of 7.00 on its reporting for ‘Investments & Finance’ from the Association for the Advancement of Sustainability in Higher Education, the company in charge of managing The Sustainability Tracking, Assessment & Rating System (STARS)–a self-reporting framework for colleges and universities to measure their sustainability performance and improve transparency.
Many of the companies which UTIMCO invests in, such as Boeing and Raytheon, profit from the destructive war in Yemen through lucrative Saudi weapons deals. The conflict in Yemen has killed more than 8,350 civilians, injured another 9,500 civilians, displaced 3.3 million people, and conjured a humanitarian disaster that threatens millions.
Even Raytheon executives have acknowledged the profit making potential of such conflicts. “Look… peace is not going to break out in the Middle East anytime soon,” said Raytheon CEO Greg Hayes in Jan. 2021, “I think it remains an area where we’ll continue to see solid growth.”
As of 2016, Human Rights Watch has documented “58 apparently unlawful [Saudi-led] coalition airstrikes, and 16 attacks [on Yemen] involving internationally banned cluster munitions.” US-manufactured weapons were used by the Saudi-led coalition in 21 of these attacks, including two of the deadlier strikes: the March 15 attack on Mastaba market, killing at least 97 civilians, and the October 8 attack on the funeral service in Sanaa, killing at least 100 people and wounding more than 500.
“When the first strike came, the world was full of blood,” Mohammed Yehia Muzayid recalls of the missile attack on the Yemeni village of Mastaba.
A Human Rights Watch munitions expert determined the bombs dropped by the Saudi-led coalition on the Yemeni village of Mastaba were manufactured by General Dynamics. Moreover, “one of the bombs used a satellite guidance kit from Chicago-based Boeing, the world’s second-most profitable weapons company. The other bomb had a Paveway guidance system, made by either Raytheon of Waltham, Mass., the third-largest arms company in the world, or Lockheed Martin of Bethesda, Md., the world’s top weapons contractor.” UTIMCO is invested in the four of those listed companies: Lockheed Martin Corp, Boeing, Raytheon Technologies Corp, and General Dynamics Corp.
Despite this concerning portfolio, there are small signs to be hopeful. In October 2018, UTIMCO expanded its current sanctions compliance procedures. Jeffery Hildebrand, chairman of the UTIMCO Board of Directors and vice chairman of the UT System Board of Regents explained, “UTIMCO’s prudent investment decisions demonstrate not only legal compliance with U.S. law, but high ethical and fiduciary standards as it proactively considers divesting from companies that are closely connected with sanctioned companies.” This signals a growing willingness to adhere to ethical considerations regarding investments. With this shift in tone, student initiatives, which have successfully held universities accountable in the past, must continue to advocate for meaningful action while rejecting posturing.
The $52.5 million worth of weapons and weapon systems manufacturer’s debt and equity securities currently held by UTIMCO is less than 0.1 percent of the total funds managed, so there is little excuse to not prohibit investments in weapon manufacturers as a matter of compliance. UTIMCO and the University of Texas System Board of Regents should make a public pledge in writing to permanently exclude weapons and weapon systems manufacturing companies from all UTIMCO investments, and amend UTIMCO investment policy to reflect this pledge.
If the world is to be a safe place for all, our university representatives must take bold action to champion policies that prioritize divestment from conflict and a shift toward sustainable investing.