Chamber
Plenary, 26 Feb 2003
26 Feb 2003 · S1 · Plenary
Item of business
Ethical Investment
I am pleased to join those who have welcomed the lodging of the motion and who have congratulated Angus MacKay on securing the debate.
Ethical investment is rising up the agenda and, as members have said, is part of the wider corporate social responsibility agenda. It is moving up the agenda for private business as well as for other institutions, which is to be welcomed.
Clearly, Scotland's universities are autonomous bodies, and it is up to them to take decisions about how to spend and invest their money. Ministers cannot tell universities what to do or how to do it, and we would not seek to have that power. That said, universities make an important contribution to the delivery of the Executive's priorities. They provide key services in education and training, which underpin our skills base. As Angus MacKay rightly said, the universities help us to close the opportunity gap. University research generates new knowledge and is key to our economic strategy of generating wealth on the basis of skills, excellence and the knowledge economy.
In return, the universities receive significant public funds. By 2005-06, higher education in Scotland will receive more than £800 million in public funds, which is around 60 per cent of their income. That represents a huge public investment by any standard, so it is right and proper that there should be public interest in what the universities do with their money—I am talking about public interest as opposed to Government direction.
The Scottish Higher Education Funding Council is required to encourage universities to maintain or develop funding from other sources. Indeed, our universities have a good track record in competing for research funding from both the United Kingdom research councils and the private sector as well as in winning money in the wider marketplace. However, tonight's motion refers to funds that are principally the universities' endowment funds. Those are funds that have been donated by benefactors over many years, and they are of particular importance to all of Scotland's older universities—even the youngest of Scotland's older universities. Like other universities, the University of Edinburgh must maximise the returns on those funds to ensure that the income generated meets the aims of the endowments.
On the face of it, a tension could be seen to exist between maximising those investment returns and circumscribing the areas in which funds can be invested. However, the co-operative movement, for one, has shown over many years that there is no contradiction between the pursuit of a policy of ethical investment and making money to reinvest in local communities or, indeed, in education and research.
The University of Edinburgh is not alone among universities in grappling with the issues and in seeking to address them. My own university, the University of Aberdeen, has followed a policy that it should not invest in any company that is substantially involved in the tobacco industry or in companies whose activities are known to be conducted in an environmentally unsound way.
Like others, I will mention the origins of that policy. They go back to my student days when many of us campaigned against investments in companies that were linked to the apartheid regime in South Africa. There is clear evidence that making one's views known can make a difference not only in the short term, but in the longer term. Like the University of Edinburgh and others, the University of Glasgow has decided on an ethical investment policy that concentrates in particular on avoiding investment in tobacco-related companies.
It is clear that it is up to individual universities to take decisions on such matters, including decisions on whether to put details of their investment portfolios into the public domain. All universities already publish a considerable amount of information. One example is their annual reports, which give details of what they have done over the year and how their income has been distributed. Indeed, in the era of electronic information, it is remarkable just how much information can be gleaned from universities' websites about their governance, their court, committee proceedings and financial policies. The information that we are discussing relates to universities' private income as opposed to the public funding that they receive, and that is a matter for each university court to decide for itself.
As others have done, I welcome the decision by the University of Edinburgh court to pay heed to the concerns of the People & Planet group and of the wider student body. The court has decided to publish details of its investment portfolio in the interests of transparency and of providing a channel of communication for views on investment policy. I know that other institutions will observe with interest, and I will watch with interest to discover how universities respond.
Ethical investment is not an issue for universities alone. I have mentioned the long-standing and outstanding example of the Scottish Co-operative Society and other co-ops. I am delighted to report that such an approach increasingly attracts support from the private sector. Corporate social responsibility has been embraced by many businesses and essentially addresses issues of corporate behaviour and standards. The Department of Trade and Industry has lead responsibility for the matter at Whitehall. It already has a comprehensive framework for corporate social responsibility and the Scottish ministers are happy to work with the DTI in that area.
We have been thinking about what more needs to happen in Scotland, over and above what is going on in Whitehall, Europe and the wider international community. In the Executive, as in the Parliament's European Committee, we have been thinking about the characteristics of a socially responsible business or public body. Ethical investment is part of that, but it is only one strand. Responsiveness to a range of stakeholders, to staff, to investors and to the general public is another strand, as is being good to work for—encouraging and not exploiting the work force—and working in partnership with trade unions instead of opposing trade unionism. Those are features of a responsible corporate approach.
Ethical investment is rising up the agenda and, as members have said, is part of the wider corporate social responsibility agenda. It is moving up the agenda for private business as well as for other institutions, which is to be welcomed.
Clearly, Scotland's universities are autonomous bodies, and it is up to them to take decisions about how to spend and invest their money. Ministers cannot tell universities what to do or how to do it, and we would not seek to have that power. That said, universities make an important contribution to the delivery of the Executive's priorities. They provide key services in education and training, which underpin our skills base. As Angus MacKay rightly said, the universities help us to close the opportunity gap. University research generates new knowledge and is key to our economic strategy of generating wealth on the basis of skills, excellence and the knowledge economy.
In return, the universities receive significant public funds. By 2005-06, higher education in Scotland will receive more than £800 million in public funds, which is around 60 per cent of their income. That represents a huge public investment by any standard, so it is right and proper that there should be public interest in what the universities do with their money—I am talking about public interest as opposed to Government direction.
The Scottish Higher Education Funding Council is required to encourage universities to maintain or develop funding from other sources. Indeed, our universities have a good track record in competing for research funding from both the United Kingdom research councils and the private sector as well as in winning money in the wider marketplace. However, tonight's motion refers to funds that are principally the universities' endowment funds. Those are funds that have been donated by benefactors over many years, and they are of particular importance to all of Scotland's older universities—even the youngest of Scotland's older universities. Like other universities, the University of Edinburgh must maximise the returns on those funds to ensure that the income generated meets the aims of the endowments.
On the face of it, a tension could be seen to exist between maximising those investment returns and circumscribing the areas in which funds can be invested. However, the co-operative movement, for one, has shown over many years that there is no contradiction between the pursuit of a policy of ethical investment and making money to reinvest in local communities or, indeed, in education and research.
The University of Edinburgh is not alone among universities in grappling with the issues and in seeking to address them. My own university, the University of Aberdeen, has followed a policy that it should not invest in any company that is substantially involved in the tobacco industry or in companies whose activities are known to be conducted in an environmentally unsound way.
Like others, I will mention the origins of that policy. They go back to my student days when many of us campaigned against investments in companies that were linked to the apartheid regime in South Africa. There is clear evidence that making one's views known can make a difference not only in the short term, but in the longer term. Like the University of Edinburgh and others, the University of Glasgow has decided on an ethical investment policy that concentrates in particular on avoiding investment in tobacco-related companies.
It is clear that it is up to individual universities to take decisions on such matters, including decisions on whether to put details of their investment portfolios into the public domain. All universities already publish a considerable amount of information. One example is their annual reports, which give details of what they have done over the year and how their income has been distributed. Indeed, in the era of electronic information, it is remarkable just how much information can be gleaned from universities' websites about their governance, their court, committee proceedings and financial policies. The information that we are discussing relates to universities' private income as opposed to the public funding that they receive, and that is a matter for each university court to decide for itself.
As others have done, I welcome the decision by the University of Edinburgh court to pay heed to the concerns of the People & Planet group and of the wider student body. The court has decided to publish details of its investment portfolio in the interests of transparency and of providing a channel of communication for views on investment policy. I know that other institutions will observe with interest, and I will watch with interest to discover how universities respond.
Ethical investment is not an issue for universities alone. I have mentioned the long-standing and outstanding example of the Scottish Co-operative Society and other co-ops. I am delighted to report that such an approach increasingly attracts support from the private sector. Corporate social responsibility has been embraced by many businesses and essentially addresses issues of corporate behaviour and standards. The Department of Trade and Industry has lead responsibility for the matter at Whitehall. It already has a comprehensive framework for corporate social responsibility and the Scottish ministers are happy to work with the DTI in that area.
We have been thinking about what more needs to happen in Scotland, over and above what is going on in Whitehall, Europe and the wider international community. In the Executive, as in the Parliament's European Committee, we have been thinking about the characteristics of a socially responsible business or public body. Ethical investment is part of that, but it is only one strand. Responsiveness to a range of stakeholders, to staff, to investors and to the general public is another strand, as is being good to work for—encouraging and not exploiting the work force—and working in partnership with trade unions instead of opposing trade unionism. Those are features of a responsible corporate approach.
In the same item of business
The Deputy Presiding Officer (Mr George Reid):
SNP
We come to our members' business debate, on motion S1M-3723, in the name of Angus MacKay, on ethical investment.
Motion debated,
That the Parliament notes the work of Edinburgh University People and Planet group and the decision of the Edinburgh University Students' Association to endo...
Angus MacKay (Edinburgh South) (Lab):
Lab
I am delighted to have the opportunity to raise the issue of ethical investment in the chamber today. The fact that I am able to do so is testimony to the ha...
The Deputy Presiding Officer:
SNP
Six members have indicated that they would like to take part in the debate. That will allow speeches of about four minutes.
Robin Harper (Lothians) (Green):
Green
I must declare two interests. First, I am rector of the University of Edinburgh and will be for another 10 days. Secondly, my entire investment portfolio, su...
The Deputy Presiding Officer:
SNP
You have one minute.
Robin Harper:
Green
I will not need even one minute, Presiding Officer. I congratulate Angus MacKay on his motion, I congratulate the People & Planet group and I congratulate th...
Sarah Boyack (Edinburgh Central) (Lab):
Lab
I congratulate Angus MacKay on his success in securing the debate. At this stage of the parliamentary session, it is increasingly difficult to get a motion o...
Fiona Hyslop (Lothians) (SNP):
SNP
I also congratulate Angus MacKay on securing tonight's debate. In addition, we should extend our congratulations to People & Planet on its campaign and we sh...
Mr David Davidson (North-East Scotland) (Con):
Con
The normal custom is to congratulate the member who has secured the debate, but tonight I would rather congratulate People & Planet, which obviously has trem...
Brian Fitzpatrick (Strathkelvin and Bearsden) (Lab):
Lab
Will the member take an intervention?
Mr Davidson:
Con
One moment, please.I came to the chamber with a blank sheet of paper just to listen, because I am puzzled about what the minister will say when he sums up. T...
Brian Fitzpatrick:
Lab
The member seems to subscribe to the old paradigm that an ethical investment policy is contradictory and that the only ambition of the university should be t...
Mr Davidson:
Con
Both can be done together quite successfully. However, the international reputation of the University of Edinburgh—or the decision of a student who is desper...
Susan Deacon (Edinburgh East and Musselburgh) (Lab):
Lab
I will return to the convention of congratulating the member who has secured the debate, not least because constituency members are lobbied about issues and ...
Donald Gorrie (Central Scotland) (LD):
LD
Those who have pricked our conscience with the motion are to be congratulated. We could all examine our own activities. I have modest, ethical individual sav...
Brian Fitzpatrick (Strathkelvin and Bearsden) (Lab):
Lab
I, too, congratulate Angus MacKay on lodging the motion, which I am happy to support. I suppose that I should get the niceties out of the way and refer to my...
The Deputy Presiding Officer:
SNP
Indeed he can. To respond to the debate, I call Lewis Macdonald.
The Deputy Minister for Enterprise, Transport and Lifelong Learning (Lewis Macdonald):
Lab
I am pleased to join those who have welcomed the lodging of the motion and who have congratulated Angus MacKay on securing the debate.Ethical investment is r...
Brian Fitzpatrick:
Lab
Does the minister accept that he and his ministerial colleagues have their hands on a number of key policy drivers? They can support some of the largest empl...
Lewis Macdonald:
Lab
Absolutely. I want to emphasise that, in developing our approach to corporate social responsibility and continuing to promote it, we already have a number of...
Meeting closed at 17:39.