About a week ago, the New York Times published an article U.C. Proxy Voting Skirts Guidelines, Documents Show explaining how the University of California investment office has been voting against social and environmental resolutions. The article explains how the university “prides itself as a leader on social and environmental issues,” yet acts in a highly contradictory way. It’s exciting and highly encouraging news that even the Times recognizes the importance of proxy voting and the U.C. system’s paradoxical behavior, but unfortunate that an environmental leader in so many ways is such a laggard in this crucial aspect.
REC has been supporting the University of California Responsible Investment Coalition (UCRIC) to change the university’s proxy voting and investment policies for four years. According the UC system policy, the university should be reviewing each vote case-by-case, which they aren’t doing. They need to be, rather than paying a proxy voting service.
Of equivalent significance in the article, though, was the university investment office response to the criticism. According to the Times “Melvin Stanton, the university’s associate chief investment officer, said in an e-mail that U.C. focused primarily on growing its investments,” and quoted him saying that their was no evidence of improved value to companies, implying that there is no reason to be proxy voting.
While Stanton and the U.C. investment office believe they are doing the best for shareholder value, pension funds and other institutional investors are leaving them behind on proxy voting and their positions on environmental and social issues in general.
Long-term investors who aren't environmental leaders in other areas, like pension funds and managers CalPERS and NYCERS in the US, and Norges Bank and ABP in Europe, have started taking environmental, social and governance factors into their investment decisions, including proxy voting, realizing the long-term potential benefits to their entire portfolios and beneficiaries, as well as society at large.
At the same time, Associate C.I.O. Melvin Stanton would rather not engage on these issues, even in the forum of proxy voting. It is a shame for the University of California to be such a leader on one front, to be such an outspoken laggard on another.
Our message to Mr. Stanton; you can hope that your 5,000 company holdings do well once they destroy the resources that they collectively depend on, or you can become a leader on these issues, and really teach the rest of the world that you can make money while being concerned about your impacts!
If you’re reading this, please feel free to reach out to us at the Responsible Endowments Coalition for some help.
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