Universities hold many of the same characteristics as individuals – they manage an income, they make choices about their financial systems, and they spend money. Many NGOs have spent the recent years challenging the spending habits of individuals, institutions and corporations through schemes such as FairTrade. This has become so popular partly because it is blindingly obvious to people what’s going on: you buy a shirt produced in a sweatshop and you’re supporting that system, buy a chocolate bar from Nestle and you’re handing profits to the baby milk demons. The same principal applies to the purchasing habits of universities, and of course, other institutions too.
Campaigns such as Ditch Dirty Development challenge consumers, in this case student account holders, to think about the effect their banking choices have. This, in a way, is the exact same principal behind Ethical Investment – instead of looking at the individual or institution’s buying power (as with FairTrade) it challenges their saving power.
Corporations respond to user demand – this is, if you’re asking Adam Smith, the great strength of capitalism – so called “consumer sovereignty”. Companies are required to maximise profit to survive and therefore if you increase the sales of the most ethical options they will be supplied more (this is of course the theory, not necessarily the practice, but go with me on this). As such ethical consumerism is very much a in situ solution, it accepts the economic system as it is. We may pay FairTrade farmers more but the capitalist will say the demand for FairTrade products is driven by consumers who value freedom from guilt as a much as they do taste.
The Big Goal
Therefore Ethical Investment, just like ethical consumerism, does not challenge the economic system. It works within it. Its goal must therefore be to effect change in the companies it targets.
If an institution, individual or corporation changes its buying or saving habits, this will effect the company doing the evil by altering its demand. This has been worked in the past as a means of effecting change, but rarely without additional action. Just as my lack of buying a Yorkie has little effect on Nestle’s sales, if one university divests from BAE Systems it may go completely unnoticed (particularly true in relatively poor new universities). Thus, for the campaign to be successful and change the company it targets (or perhaps even bankrupt it) publicity and national coordination are crucial.
There is a great danger with an ethical investment campaign that highly dedicated campaigners could spend hours, weeks, even years slaving over the production of a policy which ends up being used by the University as an ethical Scout badge and has little impact on the true goal of changing corporate practice. Unsung heroes have no place in this campaign. I do not believe that Ethical Investment is an ends in itself – it should be used as a tool to embarrass corporations and put them to shame.
The other use of Ethical Investment is in connecting students with atrocity. We are often told we come from “apathetic” universities, but Ethical Investment sprouted popularity with uses of phrases along the lines of “it is awful that my money is being used in this way”. Just like other consumer-based campaigns, people feel that albeit indirectly, they are being made part of an unacceptable state of affairs. This “awakening” can have the potential to make all of the issues People & Planet campaigns on become front page, coffee break, conversation pieces. The media loves a story they can blame on specific, local people, because it makes it more accessible for Joe Nopolitics to comprehend. Tell a punter on the street that there’s a company called Exxon-Mobil that denies climate science and is destroying the rainforest, and they’ll probably say “I’m not surprised, but what can I do” – tell them money they pay is being funnelled into that company and they’re much more likely to get a little angry.
So, Ethical Investment campaigning can influence the companies it leaves behind, and educate students along the way. But beware: as an end in itself, it can have a very limited impact. This only deepens the challenge set before groups of a campaign which can last years, and require extensive negotiation and attention to detail.