Where do we stand right now?

A summary of what I learnt in a meeting with the Principal to discuss SRI (Feb 17th 04)

The Principal (Andrew Dilnot) was happy to meet me to discuss this issue. He revealed that St Hugh's currently invests with Barclays Global Investors. The endowment money is in a tracker fund, which means the investments are spread over companies in the FTSE 100, and change automatically as companies move up and down.

He was not opposed to SRI in principle, and that he did not doubt that ethical investments could bring just as high a return as normal investments. However, he was opposed to St Hugh's investing its endowment ethically, for 2 main reasons:

1) Ethically managed funds are likely to charge a higher percentage per year than what BGI currently charges the college (0.2 %p.a. As far as I understand it, this is an administration charge, a percentage of the income earned by the investments, which the bank takes as payment for managing the fund).

2) The Principal sees incurring this extra charge as going against the duty of the college as a charitable trust.

He also told me that St Hugh's was considering changing their investments in order to invest with the University Trust Pool, where they would only be charged 0.07% p.a.

So, conclusions...

Here is a quote from the charity commission website, which I think is the basis of the 'we can't switch to a fund that charges higher admin costs' argument:

... trustees can accommodate the views of those who consider it [an investment] to be inappropriate on moral grounds, provided that they are satisfied that this would not involve 'a risk of significant financial detriment'....

I think that the Principal is interpereting the 'risk of significant financial detriment' rather too extremely, but the fact remains that all the SRI managed funds I've found do charge more than 0.2% p.a. Not much more, but still more. We can keep saying that we don't think it's 'significant', but that is kind of subjective... However, there is always the option of negotiation - we can try and persuade college to at least start looking at the options, and talking to the companies which provide socially responsible funds. Maybe since we're a prestigious (well...kind of prestigious...some people might have heard of us...) Oxford college then some ethical funds would be willing to negotiate a special rate.

Posted on 29/10/04 by bridget