Socially Responsible Investment Policy Philip Boyle, Ph.D. Vice President, Mission & Ethics www.CHE.ORG/ETHICS

1. Socially Responsible Investment Policy Philip Boyle, Ph.D. Vice President, Mission & Ethics www.CHE.ORG/ETHICS

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3. Goals for today’s conversation • Examine the moral logic of avoidance or proactive investment • What are the possible justifications for investments? • How far does a company’s involvement go before investments are restricted? • In avoidance of investments, what is the justification of 10/20% guidelines?

4. Case Comparison • Companies • ______________________ A B C D__E___F__G___H___I___J__ • Proactive Approach x x • Seeks • Animal Rights • Corporate Citizenship x • Employee Relations x • Environmental Protection x • Human Rights x • Avoids • Abortion X x • Alcohol Products x • Biological/Chemical Weapons x • Child Labor Exploiters x • Discriminatory Policies x • For-Profit Healthcare Providers x x • Gambling Companies • Manufacture of Contraceptives x • Military Weapons x x x • Nuclear Weapons-Related x x x • Oppose Moral Teachings x • Pornography x • Produce/Sell Pharmaceuticals x • Tobacco-Related Companies x x • Community Grants Program X

5. 1. Tobacco - companies with 20% or more of their revenues from the sale of tobacco related • products, the end use of which is human consumption. • 2. Biological/Chemical, Military & Nuclear Weapons - companies with 20% or more of revenues from the operation, manufacture, distribution, or sale of biological/chemical, military & nuclear weapons. • 3. Alcohol - companies with 20% or more of revenues derived from the production, distribution, or sale of alcohol. • 4. Gambling - companies with 20% or more of revenues from the operation, manufacture, distribution, or sale of gambling equipment. • 5. Pornographic Material - companies with 20% or more of revenues from business activities involve publishing or selling pornographic material. For purposes of this policy, pornography is understood as sexual depictions that demean or humiliate women, children, or men; undermine human dignity or promote hatred or violence; and appear in a work that lacks redeeming features which counteract or repudiate the values represented in the demeaning material.

6. What are the moral questions? • What kind of moral cooperation is acceptable? • Do certain investments enable unacceptable practices?

7. Primary & Secondary Interests • Health care needs of community • Sponsors • Persons who may be harmed • CEOs, CFOs, Boards

8. Values that should inform • Capital enables mission • Commitment to communities served • Integrity

9. Options • Blind-eye • Limitation • Selective • Absolute • Active engagement

10. Option Assumptions • Blind-eye • Focus on core mission • Are organizations moral agents • Cooperation is too compliacted

11. Options Limitation • Organizations are moral agents • Some investments are immediate material cooperation • Selective • Based on some local commitments • Absolute • Clear prohibitions

12. Options • Active engagement • No other way to change business behavior • Proactive strategy will be effective • Great benefit and little harm

13. Questions • Is the investment “evil enough” e.g. gambling • Stink test? • Expressive quality sends wrong message? • Consistency with other activity--alcohol

14. Conclusions • Cooperation • Scandal • Justifications • Core business • Heritage and Mission • Whether institution can afford • Whether institution and accomplish gaols