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Socially Responsible Investment Policy

Introduction

The University of Warwick is committed to ensuring that it makes investment decisions responsibly and with integrity.

This policy for Socially Responsible Investment (“SRI”) has been developed to allow the University to pursue an ethical approach while minimising any negative impact on its investment returns. Investment decisions informed by socially responsible and ethical considerations will also take into account the Charity Commission position that trustees have a duty to maximise returns on investment for charitable benefit.

The need for a Socially Responsible Investment Policy

Historically, the view of fund managers managing investments on behalf of others has tended to be that investment may properly be made in any public company operating clearly within the law. However, companies are now seen as accountable for the social and environmental outcomes of their activities, not just the financial bottom line.

The University is mindful of the need to reduce and, ideally, eliminate, corporate behaviour leading to:

• environmental degradation
• armament sales to military regimes
• human rights violations
• the institutionalisation of poverty through discriminatory market practices
• racial or sexual discrimination
• tobacco production, cultivation and manufacture
• the exploitation of workers, and
• the giving or receiving of bribes.

Our Investment Approach

The University of Warwick will use all reasonable endeavours to ensure that it operates its investment policy in a way that is consistent with the aims listed above in the context of the trustees’ duty to maximise returns. The University will look to its professional investment managers, in the first instance, to use their resources to assist in this process.

Currently, the University holds its investment assets in the University Investment Fund (“UIF”) and endowment donations in the University Endowment Fund (“UEF”). These Funds are managed by Rathbones, who have a responsible investment policy that aims to integrate a consideration of environmental, social and governance issues into the investment process. Information on Rathbones’ approach to responsible investment is available at:

http://www.rathbones.com/about-us/corporate-responsibility/socially-responsible-investing

Where the University becomes aware that it directly holds an investment in a company that it considers to be in fundamental breach of acceptable standards of ethical and/or environmental practice, the University will divest the investment in that company as soon as reasonably practicable and inform the company of its reasons for doing so.

The University will ensure that its own procedures fulfil the following aims:

• to avoid direct investment in companies that have activities inconsistent with the educational and/or research objectives of the University
• to consider environmental and social issues, as set out above, when making an investment in a company, in the belief that socially sustainable companies are more likely to be successful in the long run
• to actively engage with companies through our investment managers to encourage best practice in environmental, social and ethical standards
• to ensure that the University’s investment managers themselves have a socially responsible investment policy that ensures environmental and social issues are considered
• to regularly monitor the University's investments and the procedures for reviewing investment proposals to ensure that its ethical standards are maintained.

The above aims will be reviewed on a regular basis by the University’s Investment Sub-Committee.

Where investments are made by third party fund managers in pooled funds or similar vehicles, the University’s requirement is that wherever practicable, the funds in question should seek to avoid direct investment in companies that fall within the exclusions in its SRI policy. The University does, however, recognise that where investments are made in index-related securities, it is not practicable at present to a degree that is consistent with the trustees’ duty to maximise returns to pursue an investment strategy where no indirect investment in such companies arises. The Investment Sub-Committee will at least once a year review the University’s investment in index-related securities to see if alternative index-related securities that exclude companies that fall within the University’s SRI policy can be used without being materially to the detriment of expected investment returns.

The funds of the University of Warwick pension scheme do not belong to the University: the investment of these funds is the responsibility of the scheme’s trustees.

JUNE 2015