June 5, 2024

Racial Justice Investing (RJI) is a group of investors, asset owners, and business leaders committed to taking action towards racial justice within our own organizations, as well as in our engagements with publicly traded portfolio companies and across asset classes. RJI strives to create a sustainable, anti-racist, and anti-oppressive economy by advancing investment policies, practices, products and systems that equally value civil and human rights impacts alongside financial risks, ensuring all people have the resources to thrive. RJI’s participants utilize investment approaches that seek to ensure long-term financial returns for their clients while mitigating risk and impacts of corporate behaviors through robust research and shareholder advocacy.

We have witnessed protests across university and college campuses both within the United States and abroad, where student activists are calling for their institutions to disclose and divest investments linked to Israel and its war on Gaza, the military occupation of Palestine, and the apartheid and genocide of Palestinians. Many universities and colleges are also being asked to disclose investments and divest from weapons manufacturers generally. As financial industry professionals committed to applying a racial justice framework to our investments across asset classes, we are galvanized by the opportunity colleges and universities face to align their investments and financial activities with their mission, values and stated commitments.

As stewards of significant assets, universities have a profound moral, ethical and financial responsibility to ensure investments and financial activities uphold human rights, mitigate climate risk, and support gender and racial equity – common good themes that have been taught at colleges and university classrooms for generations past, present and future. This is a crucial piece to address the wider range of how colleges and universities’ financial and investment practices may be misaligned with their stated mission and values, prioritizing the financialization of the institution while failing to address critical issues such as tuition affordability and adequate mental health and academic support for faculty, students, and staff.

In line with the principles of sustainable investing, we call upon you to take the following four concrete steps in alignment with what your students, faculty, staff and alumni are calling for.

1. Ensure your institution’s Investment Committee is composed of a diverse cross-section of students and faculty with specific expertise in social, economic, and environmental justice, and socially responsible and impact investing. The committee’s makeup should ensure a broad range of perspectives and expertise to promote more inclusive and effective decision-making. Committee members should ensure alignment of financial strategies with the institution’s mission, values and stated commitments.

Resources:

1. California Institute of the Arts established an Ethical Investment Workgroup to support the institution’s Investment Committee


2. University of California Riverside agreed to form a task force that includes students appointed by ASUCR's Diversity Council and faculty appointed by the Academic Senate to support the UCR Foundation Board of Trustees


2. Adopt or revise an Investment Policy Statement (IPS) to include the institution’s mission and values statesment, with a commitment to: 1) Advance human rights and social justice; 2) Exclude investments in, and if necessary develop a strategy to divest from, companies and governments that consistently, knowingly, and directly facilitate and enable human rights violations and violations of international law including prolonged military occupations, apartheid, and genocide. Provide forums for beneficiaries and students to ask questions and shape the policy and position.

   We encourage this process to be an opportunity to take a comprehensive review and apply the IPS to all investments, including direct investments, mutual funds, and employee retirement fund options.

   Resources:

   1. Example Investment Policies:
      1. San Francisco State University’s IPS (which is currently revising its statement to add a human rights-based investment strategy, including divesting from direct investments in weapons manufacturers and limiting other such indirect investments)
      2. American Friends Service Committee’s (AFSC) IPS
      
      
   2. The Intentional Endowments Network (IEN) offers guidance on establishing an Investment Policy, sustainable employee retirement funds and more
   
   
   3. AFSC has developed specific guidance on divesting from Israeli human rights violations, war crimes, and crimes against humanity
   
   
   4. The Investor Alliance for Human Rights has compiled a resource list on conducting business and investing in conflict-affected areas
   
   
   5. Al-Haq and the Global Legal Action Network developed Business and Human Rights in Occupied Territory: Guidance for Upholding Human Rights
   
   
3. Assess the ability of the firms and intermediaries that invest the endowment’s assets to carry out the mandate of the institution and invest in alignment with the priorities outlined in the Investment Policy Statement. We suggest working with an asset management firm that earnestly and robustly constructs an investment portfolio that aligns with and upholds social justice and international human rights frameworks. These expectations can be met while delivering competitive risk adjusted financial returns.

Resources:

1. Due Diligence 2.0 Questionnaire, which was created by seasoned allocators and reviewed by BIPOC asset managers, can be used to remove embedded bias and create a more inclusive, yet equally rigorous, means of evaluating asset management firms, investment products, and strategies


2. IEN developed Hiring an Investment Consultant: Making Your ESG Intention Actionable, a guide that also offers sample questions for investment consultant RFPs or dialogues, sample RFI questions


3. The Principles for Responsible Investment has a series of technical guides for assets owners, including an Investment Manager Selection Guide


4. Engage actively on an ongoing basis with companies in the investment portfolios to influence corporate behavior through tools like proxy voting and shareholder resolutions. As a shareholder, you have a seat at the table with companies you are invested in. Establish a commitment to stewardship and engagement, either directly or through asset managers, to engage with companies on issues that are important to your institution’s mission, values and commitments.

Resources:

1. The Interfaith Center on Corporate Responsibility is a leader in the shareholder advocacy space


2. IEN has a series of learning modules on shareholder engagement

We call on you to take up these next steps in good faith and in service to a sustainable, just future we are all working towards. Contact RJI with any questions or if you would like additional guidance.