Divesting from the Arms Trade: a suggested ethical investment policy framework

Upon a university selling its arms company shares it is necessary for an ethical investment policy to be instituted so that the university cannot purchase arms company shares in the future.

The policy criteria outlined below are a suggested framework for inclusion in a university's overall investment policy. The policy criteria should be used as a guide to prevent the university investing in companies that export military equipment to regimes considered oppressive, undemocratic or militaristic.

Arms trade investment policy criteria

A good place to start is the top 100 military companies worldwide. These corporations supply military equipment to regions of conflict, or to undemocratic and oppressive regimes. By doing this, they bolster the power of the regime, increase conflict and tension, and divert resources away from development. Companies are responsible for those to whom they sell military equipment, and should take precautions that they are not used to support such regimes.

The following list is a selection of companies from the top 100 list, and the university will therefore not invest/buy shares in the following companies¹:

• BAE Systems
• Boeing
• Cobham
• EADS
• Finmeccanica/AugustaWestland
• General Dynamics
• General Electric
• GKN
• Halliburton
• L3 Communications
• Lockheed Martin
• Northrup Grumman
• Qinetiq
• Raytheon
• Rolls-Royce
• Smiths Group
• Thales
• VT Group

Furthermore, the university will not invest in any business that derives any of its profits from the manufacture, sale, licensed production, or brokerage of military equipment.

Further recommendations:

There are further steps that the university could take in the area of ethical investments, to ensure a democratic, transparent and accountable investment process.

For example, the university could institute an Ethics Committee, consisting of students and staff, to allow relevant stakeholders to influence the Ethical Policy and its implementation and provide for their significant representation on the body responsible for investment policy. The key relevant stakeholders are the students and employees. They will be represented through the unions present at the University, particularly the SU and AUT.

The Ethics Committee will have the specific mandate of:

1. developing a set of ethical investment principles for discussion and eventual agreement.
2. developing a list of possible actions as active investors for similar discussion and agreement.
3. considering whether, for economic and ethical reasons, the university could diversify (some of) its investments into ethical funds.
4. ensuring transparency and oversight by making the following information publicly available:
   • all the investments held by the university
   • the investment policy
   • the name of the company managing the investments
   • votes cast at annual general meetings
   • any other information that can reasonably be put in the public domain
5. reviewing the investment policy at least every three years and considering submissions for amending the ethical policy from all interested parties. There will be a mechanism for complaints and topical events to be brought to the body responsible for investment policy

¹This should be considered as a provisional list and thus subject to review by the investment/ethics committee.