Members of Students for a Democratic Society at the University of Florida are on a hunger strike, but this is not your parents' SDS (or yours, depending on your generational perspective). For those not steeped in the lore of 1960s' leftist activism, SDS was the linchpin of the 1960s student movement, whose political vision was emblematic of the New Left's commitment to participatory democracy. SDS members sat-in against the war in Vietnam, engaged in large scale non-violent disobedience, and advocated for civil rights.
The SDS members at the University of Florida are clearly a bit more savvy than their parents were about global capital markets. They are on a hunger strike to demand that the University implement a socially responsible investing policy to govern its 1.2 billion dollar endowment.
Their initial demand is simple, and, it would seem, non-controversial: they have asked the University to implement a policy of investment transparency so that students, faculty, alumni, and other members of the University community can educate themselves about the university's investment holdings. According to SDS hunger strikers, the university has stonewalled their requests for almost a year. University officials claim that transparency would jeopardize financial returns, but substantial experience with disclosure in the financial markets demonstrates that this is simply untrue.
At the core of the students' demand is the notion that investors are ultimately responsible for the practices of the companies in which they are invested. If profits are being made by violating human rights or international environmental norms, then investors are morally obligated to do something about it, since the investors are the ultimate beneficiaries.
Socially Responsible Investing, also known as Ethical, Social, and Governance (ESG) investing, can take a number of forms. The practice of selecting stocks based on ESG criteria -- called social screening -- is already well-established. More than $1.7 trillion dollars are currently managed under some sort of social screen. This is an obvious and effective way of avoiding investments that inflict social and environmental harms.
However, ESG investing does not require that an investor pick and choose investments based on social criteria. For large institutional investors like the University of Florida, a policy of shareholder advocacy is likely to be far more effective in actually changing the practices of the companies in which the university is invested. Shareholder advocacy requires that shareholders pay attention to reports of a company's wrongdoing, and then file a shareholder resolution, or vote in favor of a resolution filed by another shareholder, calling upon the company to change its business practices.
Over 80% of student voters in a recent University of Florida student government referendum supported the adoption of a socially responsible investing policy. Until the University of Florida heeds this morally unambiguous clarion call, 11 SDSers will be hunger striking.
Contact information for University of Florida President Bernie Machen:
Phone: (352) 392-1311
Fax: (352) 392-9506
Email: president@ufl.edu