Recent Developments


Students first became aware of the University of York’s investment in the arms industry when the UK-based organisation ‘Campaign against the Arms Trade’ (CAAT) released a detailed study on the financial connections between UK universities and arms companies in October 2005.[1] CAAT had obtained its figures through requests made directly to universities under the Freedom of Information Act. Students reacted immediately by passing a motion confirming the Students’ Union’s support for an Ethical Investment Policy in December 2005.[2] In May 2006, following protest actions by students, the Vice-Chancellor’s Advisory Group established a working group aimed at drafting a proposal for an ethical investment policy in collaboration with students.[3] Yet until now (i.e. February 2009), the University Council has ignored the efforts of the working group, which last met in June 2007. In fact, recent figures released by CAAT show that the University has even increased its shareholdings in BAE systems from £644,371 to £713,803 in the past year.[4] As a result, in December 2008, the Students’ Union passed a second motion calling upon the University to resume its collaboration with students to draw up an ethical investment policy.[5]


Details on Arms shares


The £713,803 worth of shares the University currently has in BAE systems are held in the Pension Scheme, which provides for the pensions of all full- and part-time employees in Grades 1 – 5[6]. Taken together with the £283,539 worth of shares held in Rolls Royce, the University invests a total of at least £997,342 in the arms industry.[7] This makes York the fourth biggest university investor in the arms trade after Liverpool, Cambridge and Oxford.[8] However, according to the data obtained by CAAT, arms shares amount only to 0.3% of the University’s total assets of £320 million. Therefore, these shares can in no way be referred to as crucial to the financial success of the Pension Fund.


The only ethical guideline the University currently instructs its trustees to follow in is that of avoiding investment in tobacco companies, on the grounds that this would conflict with its scientific and medical research. Other than that, ethical considerations are not taken into account.


Legal Background


Concerns have been voiced that trustees are obliged by law to seek the maximisation of profits for the funds entrusted to them. However, this explicitly does not apply to charities. In fact, Charity Commission regulations (2001) state, ”trustees of a charity should decline to invest in a particular company if it carries out activities which are directly contrary to the charity’s purposes.”  Amongst other precedents from law and government recommendations, the Goode Committee on Pension Law Reform concluded “Trustees…are perfectly entitled to have a policy on ethical investment and pursue that policy.”[9]


As part of their adoption of an ethical investment policy in 2006, the University of St. Andrews’s Director of Finance has published a report investigating whether ethical guidelines for university  investment are constrained by Trustee Law. The report came to the conclusion that “that there is no legal limitation that would prevent [the university] from adopting a Sustainable Investment Strategy as long as it retained a prudent view of the ongoing and proper purpose of the Funds.”[10]


[1] (Campaign against the Arms Trade, accessed  6 February 2009).

[2] (York University Stundents’ Union, accessed 9 February 2009).

[3] (People and Planet York University, accesed 6 February 2009).

[4] (Campaign against the Arms Trade, accessed 6 February 2009).

[5] (York University Students’ Union, accessed 9 February 2009).

[6] (University of York, accessed 6 February 2009).

[7] (Campaign against the Arms Trade, accessed 6 February 2009). The University has confirmed that, outside of its Pension Scheme, it invests in M&G Charifund Units, which have holdings in GKN Group. However, no further details were provided to CAAT.

[8] (Nouse Student Newspaper, accessed 9 February 2009).

[9] (Campaign against the Arms Trade, accessed 6 February 2009).

[10] (University of St. Andrews, accessed 6 February 2009).


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