Key facts
- University of Birmingham replaced a policy to "minimise" investments in arms, tobacco, and alcohol companies.
- New policy focuses on considering "financially material" ESG factors.
- Previous policy excluded companies with over 10% revenue from weapons systems.
- JP Morgan appointed as outsourced chief investment officer (OCIO).
- University states no changes to investment portfolio or lowered expectations.
- Student union president criticizes the policy as weakening ethical standards.
The University of Birmingham is facing accusations of significantly weakening its investment restrictions concerning arms companies. Previously, the university's responsible investment policy, adopted in 2022, committed to minimizing investments in arms, tobacco, and alcohol. This policy included exclusion criteria for companies where revenues exceeded 10% from activities connected to weapons systems, as well as those manufacturing whole weapon systems, cluster munitions, and anti-personnel landmines. Tobacco, oil, and mining companies were also excluded.
However, the university's updated investment policy, adopted in June, replaces these specific exclusions with a focus on considering "financially material" environmental, social, and governance (ESG) factors in manager selection, monitoring, and stewardship. JP Morgan has been appointed as the university's outsourced chief investment officer (OCIO) to manage these investments.
The new policy mandates compliance with UK legal prohibitions relating to anti-personnel mines, cluster munitions, and chemical and biological weapons. Beyond these baseline requirements, the university expects the OCIO to explain investment rationales and risk management controls for investments with material exposure to elevated-risk activities.
Antonia Listrat, president of the Guild of Students, criticized the policy change, stating it sends a "devastating message" and makes it easier to profit from companies connected to armed conflict. A university spokesperson, however, stated that no changes have been made to the investment portfolio and responsible investment expectations have not been lowered. The spokesperson explained that the updated policy strengthens oversight and evidence of their approach, moving towards principles-based expectations covering legal compliance, ESG integration, stewardship, voting, climate, human rights, and governance, aligning with their UNPRI signatory status.