Yale updates divestment policy on assault weapons retailers

This week, Yale’s Advisory Committee on Investor Responsibility (ACIR), which works to support the ethical management of Yale’s endowment, announced that the Yale Board of Trustees has updated the university’s assault weapon divestment policy. In a note to students who advocated for an expansion of the policy, the ACIR confirmed the policy will be expanded to cover assault weapons manufacturers that engage in retail activities to the general public. Separately, the ACIR has informed students who presented proposals on military weapons manufacturing that it does not believe that such activity meets the criteria for divestment.

For more than 50 years, the university has been well served by principles to address the ethical investment of the endowment, set forth in “The Ethical Investor.” This book established criteria and procedures by which a university could respond to requests from members of its community to consider factors in addition to economic return when making investment decisions and exercising rights as shareholder. This framework subsequently served as a blueprint for the ethical policies of a number of universities. 

In the development of divestment policies, the Yale Corporation Committee on Investor Responsibility (CCIR) is advised and supported by the ACIR. The ACIR is composed of two students (one undergraduate and one graduate), two alumni, two faculty, and two staff members. The ACIR is charged with listening to concerns raised by the community and considering them by applying the principles of “The Ethical Investor.” The ACIR holds regular meetings throughout the academic year, including an annual meeting open to all members of the Yale community. Members of the Yale community can also reach out to the committee directly to propose topics for consideration. 

The ACIR considers community input and makes recommendations to the CCIR. Divestment policies are then adopted by the Board of Trustees (formally known as the Yale Corporation), upon recommendation from the CCIR. If adopted, the divestment policy is implemented through the Yale Investments Office, which engages with Yale’s external investment managers. New divestment policies are not indicative of existing holdings within the endowment’s portfolio; the policies simply identify which investments are not eligible for investment by Yale, regardless of whether the endowment has ever held such investments.

In 2018, Yale adopted a policy prohibiting investment in assault weapon retailers. In issuing its statement, the CCIR noted that mass shootings cause incontrovertible societal harm and that retailers supplying assault weapons to the general public cause grave social injury. The CCIR gave special consideration to various factors raised by the ACIR, including: (1) the distinction between manufacturers and retail distributors of assault weapons, since assault weapons may be used for sanctioned purposes by the military and law enforcement, and (2) the large number of shootings that occur at educational institutions, which is of particular relevance to Yale as an institution of higher education.  

Last spring, a student group — Yale Students Demand Action — brought a proposal to the ACIR to expand the policy to cover all gun manufacturers. In examining the 2018 policy, the ACIR concluded that the underlying considerations remained valid, but the policy should be updated to include assault weapon manufacturers that facilitate retail sales to the general public, such as through mass advertising.

The ACIR separately took up the issue of divestment from military weapons manufacturing after hearing student presentations at its annual open meeting late last fall. In its deliberations, the ACIR considered weapons manufacturing for use by military and law enforcement for authorized purposes. Given these uses, the ACIR concluded that military weapons manufacturing for authorized sales did not meet the threshold of grave social injury, a prerequisite for divestment, because this manufacturing supports socially necessary uses, such as law enforcement and national security.

One of the key tenets of the ACIR is to provide a forum where the community can share input on issues of investor responsibility. The ACIR invites engagement with the community through open meetings and its website. This engagement from the community helps sustain Yale’s longstanding commitment to ethical investing.

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