Scottish universities have been branded “hypocritical” for investing tens of millions in the arms trade, fossil fuels, minimum wage employers and tax avoiders – despite pledging to only make “socially responsible” investments.

Glasgow, Strathclyde, Edinburgh, Dundee, Abertay, St Andrews, Napier, Robert Gordon and Queen Margaret universities all hold investments in companies that have been criticised for their ethical behaviour, an investigation by the Ferret has found.

Among the companies involved are a weapons manufacturer implicated in Saudi Arabia’s bombing campaign in Yemen, a military robotics specialist, disgraced high street retailer Sports Direct and a Russian bank linked to the Kremlin.

Campaigners have accused universities of supporting “destructive industries” and attempting to fob off students by flouting their own investment promises.

Figures uncovered through Freedom of Information show that Glasgow University has almost a million and a half pounds invested in companies linked to the arms trade, including £551,288 worth of shares in BAE Systems.

BAE Systems, a defence and security firm with extensive premises in Glasgow, has been selling aircraft and engineering support to the Saudi Royal Air Force. Saudi Arabia has been accused of committing war crimes during its on-going bombing raids in Yemen.

Investments are an important source of income for universities but experts say that it is not difficult to invest ethically while still making a decent return.

Glasgow University is “committed to socially responsible investment”, according to official statements, but the university’s £163m endowment fund includes £316,403 invested in Qinetiq, one of the UK’s largest arms companies.

Qinetiq was privatised from the Ministry of Defence in 2001 and claims to be a world leader in military robotics. Among its international clients is the Saudi ministry of interior.

Glasgow also has £589,064 invested in Cobham, a company which describes itself as “a leading supplier of weapons carriage and release systems” for the UK airforce, navy and foreign governments.

Cobham sells location monitoring and phone surveillance technology to over 140 different agencies globally. Company literature shows its products can allow an agent to lock onto a target’s mobile phone and activate a ‘silent’ call to keep the device ‘under their control’, or continually in their sights.

Strathclyde University also has investments BAE Systems and Cobham, worth £136,985 and £122,584, respectively.

“It is entirely hypocritical for Universities to continue investing in the arms trade, particularly those that hide behind their ethical policy,” said Jess Poyner, universities coordinator at Campaign Against Arms Trade.

“If Universities think students can be fobbed off by weak policies they are mistaken.”

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In 2014, Glasgow University made headlines when it announced that it would be the first university in Europe to divest from fossil fuels.  The university said it intends to sell over £18m of investments over a ten year period.

But the university still has major holdings in oil and gas companies linked to wrong doing elsewhere in the world, including an £1,012,914 investment in BP.

BP has close links with the brutal dictatorship in Azerbaijan regime. BP sponsored the 2015 European Games during which dissidents, lawyers and journalists were arrested on trumped up charges in the autocratic Black Sea state, according to Amnesty. 

Glasgow also owns £312,530 worth of shares in Royal Dutch Shell. The oil giant has been severely criticised for allegedly funding armed gangs that carried out human rights abuses in Nigeria.

Dundee University has investments in Royal Dutch Shell and BP worth £703398 and £541,938, respectively. Dundee also has more than half a million invested in controversial mining giant Rio Tinto, which has been accused of environmental and human rights abuses in Mongolia and elsewhere. 

Glasgow university also has £101,641 invested in BHP Billiton, a mining and oil conglomerate that last year paid £19m ($25m) to settle corruption charges linked to the 2008 Beijing Olympics.

Arms and fossil fuels are not the only questionable investments held by our universities.

Robert Gordon University owns shares with a book value of almost £15,000 in Sports Direct. This week the retail giant apologised for effectively paying staff less than the minimum wage. Conditions in the company’s Shirebrook warehouse have been compared to a Victorian era workhouse.

Edinburgh University’s £363m endowment fund is, by some distance, the largest in Scotland.

In 2003, Edinburgh University pledged to follow a “socially responsible” investment policy that includes not investing in companies involved in “issues of social, environmental and humanitarian concern”. In 2013 the university adopted the United Nations Principles of Responsible Investment.

But among the Edinburgh’s investments are over £15m in a range of companies that have been accused of ethical malpractice. The university holds almost £2m worth of shares in controversial biotech firm, Monsanto. 

Edinburgh has invested £792,209 in Russian savings bank Sberbank. Russia’s largest financial institution has been described as “the Kremlin’s bank” and was named in the Panama Papers. Edinburgh University was criticised earlier this summer for accepting £221,000 from Russkiy Mir, a foundation close to president Vladimir Putin.

Edinburgh university also owns almost £6m worth of shares in Amazon. The online retailer has been heavily criticised for its working conditions in its Scottish distribution hubs as well as its complex tax arrangements.

Edinburgh has invested more than £2m in Facebook. The highly profitable social networking site paid just £4,327 in corporation tax in the UK in 2014 despite making global profits of almost £2bn.

Earlier this year, students at Edinburgh protested against the universities investment in fossil fuels. In 2013, the university sold a £1.2m investment in defence company Ultra Electronics following student pressure.

In 2014, St Andrews pledged to protect “the global environment, its climate and its biodiversity” but until May of this year the university had investments in Oil Search Limited, the largest oil and gas exploration company in Papua New Guinea.

Ric Lander from Friends of the Earth Scotland called on Scottish universities “to act with urgency” in shifting investments away from fossil fuels.

“Student campaigners have been pressing hard for their universities to put their money where their mouth is when it comes to ethical investing. They have won high-profile victories – but Scotland’s institutions must do more to lead,” Lander said.

A number of Scottish universities, including Queen Margaret, Robert Gordon, and Napier, hold shares in managed funds that invest heavily in fossil fuels and tobacco.

Abertay has had an ethical investment policy dating back to 2001 but holds over £100,000 in two funds, Vanguard and Dunedin Income Growth, that have significant holdings in British American Tobacco.

Richard Murphy, founder of the Tax Justice Network and a professor at City University London, said that universities “have no excuse” for investing in unethical companies.

“If you have a big endowment fund, as many of these universities have, you can set whatever criteria you want on your investments. You don’t need to be investing in Amazon if you don’t want to.”

Dave Watson, Scottish organiser at Unison, said: “Public money should be used for the public good, not to support destructive industries. Unethical firms are also risky investments for long term investors like pension funds, as their business practices eventually catch up with them.”

Andrew Taylor from environmental campaign group People and Planet said: “It’s vital that universities stand up for truth and environmental justice. With fossil fuel companies continuing to spread misinformation about climate change and its impacts, while planning to exploit five times more carbon than is safe to burn, is hard to see how university mangers can justify their continued profiteering at societies expense.”

A spokesperson for the University of Glasgow said the university “has a very clear socially responsible policy on investment and we regularly review all of our investments.”

A spokesperson for Edinburgh University said: “We are committed to using our finances to make a significant, sustainable and socially responsible contribution to Scotland, the UK and the world. The content of our investment portfolio is under constant review.”

Napier University said that the “University operates an ethical investment policy and this is kept under constant review.”

Abertay University said that it had instructed fund managers to withdraw from direct investment in fossil fuels within three years.

“All our investments are kept under constant review in accordance with principles of ethical investment and the prudent management of public funds,” an Abertay spokesperson said.

St Andrews said: “We maintain a regular and helpful dialogue with students about our investments.”

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Additional research for this article was undertaken by Ross Hunter and  Jamie Mann. This story was published in tandem with the Sunday Mail. 

Comments

  1. More detail on Scottish University investments is available in this spreadsheet.

    There are undoubtedly more "interesting" investments among this information, particularly those that make up some of the managed funds that the universities have invested in. If you have more information on the holdings within these funds, please do share in this thread.

    Note that this information was derived from multiple freedom of information requests and some publicly available documents. As universities may buy and sell shares at any time, it should be viewed as a snap shot based on the best available information at a particular time. The colour coding and notes were added by @jamierobertmann , @rossh148 and @pkgeoghegan, to aid in their research and should not be taken to indicate anything further than this.

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