I applaud Associate Vice President of Plant Operations Dave Irvin’s commitment to enhancing our role as a sustainable institution, particularly within the confines of available budgets and staff. With that in mind, I’d like to offer a cost-free, pragmatic suggestion to further our efforts in becoming a sustainability leader.
There are plenty of solutions the University of Houston can pursue to successfully address the dire call of sustainability without spending a dime. One such solution is shareholder engagement – the practice of using financial influence to alter a company’s behavior.
The UH System boasts a sizeable $522 million endowment, which is invested in stocks, mutual funds and other such financial assets. As a large institutional investor, the university owns millions of stocks in thousands of companies.
United States law guarantees shareholders certain rights with companies in which they hold shares. One such right allows for shareholders to direct the behavior of a company through a democratic voting process. For instance, if a General Motors shareholder introduces a bill that demands the company increase its fuel efficiency standards and a majority of shareholders agree, GM would be legally obligated to comply. Though it’s not apparent, environmentally and fiscally responsible investors regularly present bills to be voted on at shareholder meetings and, quite often, they receive enough votes to be seriously considered.
It’s not an experimental concept. A 2006 study at the University of Sydney validated the effectiveness of shareholder engagement in enhancing a company’s environmental performance. Even prestigious universities including Harvard, Yale, Columbia, Dartmouth, Stanford, Vassar, and Brown – all of whose endowments are far more substantial than our own – have already adopted socially responsible voting policies.
UH does not utilize its shareholder voting power. It outsources its endowment-management to third-party investment firms, which often neglect voting duties unless directed otherwise.
If the University is seriously committed to sustainability, then we ought to promote it through all available means. That includes utilizing our investment power by supporting shareholder resolutions, calling for greater environmental awareness, condemning firms engaging in reckless behavior and rewarding companies that consider sustainability a priority. We need not immediately divest or take other such drastic action – we ought to simply act as leaders and informed investors.
Aside from the obvious environmental benefits, such a policy would establish UH as a leader in the state of Texas as neither the University of Texas nor Texas A’M have such a voting system in place.
Additionally, by incorporating students into such a system, we’d expose them to issues of corporate governance, investment ethics, and fiscal obligations, adding to their degree’s worth.
UH has a great deal to accomplish before it can claim itself a true sustainability leader. Socially responsible and environmentally aware shareholder voting policies will help us reach that goal.
We urge members of the UH community to visit http://criuh.org to learn more about shareholder engagement, specifics on how we could implement such a policy, and to explore more than 700 pages of UH’s investment records.
Siddiqi, a biology junior, can be reached via [email protected].
