By Barley Lewis-McCabe
This semester, student protestors occupied two different buildings on two separate occasions with an identical trio of demands each time. The first was for the Cal Poly Humboldt Foundation to fully divest from companies associated with Israel, or the U.S. military industrial complex. The Foundation is a board of fiduciaries who invest donations they receive on behalf of donors for the sake of funding student services, primarily scholarships.
The Cal Poly Humboldt website details the university’s Socially and Environmentally Responsible Investment Offset Policy (SEROP) and how the Foundation tries to follow it.
“The Cal Poly Humboldt Foundation continues to abstain from any direct investment in Concerning Sectors (including fossil fuels) and to cut indirect mutual fund investments in Concerning Sectors…,” the policy reads. “Furthermore, the Foundation has expanded its definition of socially concerning sectors to include aerospace and defense…”
The Foundation follows an Environmentally and Socially Responsible (ESR) investment policy, meaning it prioritizes investments in companies that follow their ESR guidelines and intends to reach 100% ESR investment. The Foundation is currently invested in 3 mutual funds with ESR policies that also hold stock in companies with defense contracts: Calvert International Equity, Kennedy Capital and Touchstone Non-Us Equity – which also has stock in fossil fuel company Shell Plc.
The Foundation doesn’t invest in stocks directly, but rather in 10 mutual funds, which are bundles of stocks sold as one package. The Foundation receives guidance from the Portland-based investment advice firm RVK. Similar to the Foundation’s ESR metric, RVK also has environmentally-responsible investment criteria, but declined to comment when Lumberjack reporters asked how they define a socially-responsible investment.
“There’s not a standard that companies have to meet to call themselves ESR mutual funds. They have their own philosophy on that piece of it,” said Cal Poly Humboldt Foundation Executive Director Steve Karp.
Karp elaborated on how out of over 6000 mutual funds, roughly 280 have ESR policies.
“It is absolutely impossible, right?” Karp said. “So, if some have Shell in there — I’m not saying that’s not true — then they try their best to keep no oil stocks in there.”
The Cal Poly Humboldt Foundation is unable to buy individual stocks, due to the time commitment and expertise required to manage stocks. Mutual fund managers manage each stock individually and adjust what stocks they own, and how much daily to ensure a high return on investment for their customers. Because mutual funds are so large, no individual investor can tell the fund not to buy a certain stock — the foundation either buys the package or they don’t.
Currently 72% of the Foundation’s investments are accepted by its ESR policy, with a possible maximum of 83%. The remaining 17% are placed in organizations that are not ESR eligible, such as real estate or government bonds.
“We are trying to close that gap. I promise you that, but we also have to return on investment,” Karp said. “And so we’re now down to where we’re doing little increments, but we look at it constantly.”
Some students feel frustrated with the Foundation’s slow pace in divesting.
“They say that they’re going to divest from [defense companies]. It still hasn’t happened yet,” said Humboldt Youth Democratic Socialists of America Vice-President James Menendez. “I want to give them the benefit of the doubt. I want to trust their word because in the end, I don’t hate anyone. We’re all here together… so, if they say they’re going to divest, I believe that they’re going to, but it hasn’t happened yet.”
Barley is the opinionated opinion editor and an untraditional reporter who focuses on social change and stories with a real human impact. If you’d like to reach him for whatever reason email bl258@humboldt.edu.