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LSE’s Ethics Policy Committee, have radically changed the Ethics Code under a policy of ‘streamlining’. Removed paragraphs include: S2.6 on its commitment to human rights, S2.2 on anti-bribery, S2.3 on restricting parental and student donations, and changing its dedication to sustainability after they were found to be “problematic”.
We all know fully well the Gaddafi scandal that brought LSE’s ethical reputation into serious question. The Libyan dictator pledged a substantial donation of £1.5 million in exchange for granting his son Saif Gaddafi, a fake PhD. Following this scandal, and given the immense reputation damage LSE suffered as a result, the school’s management should be reaffirming LSE’s commitment to ethics and transparency, and expanding those commitments across the school. Instead, the school seems to be attempting to weave its way out of having to meet what would be considered fairly minimal demands in terms of ethical standards.
The Ethics Manager at LSE attempted to assure us that the removed principles have been placed into a separate guidance document which supposedly states LSE’s acknowledgment of human rights, anti-bribery and sustainability. Effectively, LSE can still pursue unethical investment decisions as it is purely a set of advisory principles that are not legally binding, and yet to be released.
The Finance Committee’s ability to avoid any binding ethics code is also unacceptable. When considering investment decisions, members should refer to the ‘Socially Responsible Investment Policy’. The Chief Financial Officer claimed that the policy is legally binding, as it refers to an old Ethics Code. However, as stated previously, the old Ethics Code has been diluted. In practice, LSE’s ethics policy is like playing with Russian dolls, by having what appears to be a legally binding investment policy that actually depends on a non-binding set of ethics.
Furthermore, the Ethics Policy Committee members are obliged to sign a confidentiality contract to ensure information does not leave the confines of the room in which decisions are taken. This is clearly in contradiction to LSE’s expected values to transparency. In response, the Ethics Manger explained that this is only with regards to “information on individuals or organisations that might be provided such as in relation to specific grants and donation cases.” This line of argument conjures up vivid memories of concealing untrustworthy, immoral and controversial sources of funding that LSE has involved itself with in the past, namely the Gaddafi scandal.
What is at stake here is what is obvious to most of us to begin with. Human rights, anti-bribery and sustainability should be at the core of LSE’s legally binding Ethics Code with regards to investments, especially given that we are the leading research university in the UK. LSE’s 2015 investment portfolio is already short of an appropriate sustainable and ethical standard. Funds have been funnelled into BG Energy Capital, a British multinational oil company who was listed as the 7th most environmentally and socially controversial company in the world in 2010. If that wasn’t bad enough, LSE also invests in General Electric, who provides the Israeli military with engines for the F- 16s and Apache helicopters that were indiscriminately used on Gaza. Allowing this change to the Ethics code will give LSE the freedom to operate without scrutiny, and to make investments that may be detrimental to human rights and sustainability, as well as to LSE’s reputation. We have a responsibility as students of this institution to prevent the school from avoiding what should be its legal obligations to ethics and sustainability when considering its investment options, especially since much of the funding comes from our extortionate tuition fees.
The student body has been insufficiently consulted on the proposed changes. We as students need to have a greater voice and involvement in these processes, especially as the Ethics Framework Review Group stated that “it would not be practicable for the ERFG to replicate a consultation exercise on that scale” (referring to the creation of the original Code). At a global university, our voices should be crucial when it comes to deciding where our money goes, especially if it contributes to bribery and the violation of human rights around the world. If we do not stand up, who will?
Noelie Audi-Dor and I are setting up #TheOnlyWayIsEthics campaign in response to LSE’s actions. We call for: 1 – A centralised, clear and coherent system whereby all LSE investment committees are committed to human rights, anti-bribery and sustainability within one legally binding Ethics Code. 2 –An expansion in student consultation by including all Sabbatical Officers and the Ethics and Environment Officer on investment committees, which should keep all students informed about LSE’s investment policy and about any future changes to the Ethics code. 3 – Greater transparency from the school hierarchy about the LSE’s investment policy and the removal of confidentiality contracts.
If you would like to join our campaign to make LSE more ethical and transparent, you can contact Aysha Al-Fekaiki on email@example.com. Join the discussion and find out more at our ‘The Future of Finance: Ethical Investing on a Warming Planet’ event on 29th January in room CLM 2.02 at 19:00. Vote for our ethical investment motion due to be submitted to a Union General Meeting within the coming weeks!