Ethical Investment

– in the Scottish Parliament at 4:49 pm on 26th February 2003.

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Photo of George Reid George Reid Scottish National Party 4:49 pm, 26th February 2003

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 endorse overwhelmingly a motion on ethical investment during its general meeting; congratulates students that have chosen to highlight the issue on the university campus by campaigning that the University of Edinburgh's investments of £160 million should be invested only in ethical companies that do not flout human rights, exploit workers, pollute heavily or irresponsibly sell armaments; welcomes the decision of the University Court to make available previously confidential information about investments as a first step in achieving these aims but considers that the University of Edinburgh should go further by developing a fully accountable ethical investment policy, and believes that other universities in the United Kingdom should develop similar policies based on the shared values of their staff and students.

Photo of Angus MacKay Angus MacKay Labour 4:54 pm, 26th February 2003

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 hard work and perseverance of the People & Planet group at the University of Edinburgh. I put on record my thanks to it for the work that it has done in campaigning in and around the university on ethical investment.

The University of Edinburgh faces a number of important challenges. We should congratulate Professor Tim O'Shea on the work that he has done recently and on his recent announcement on opening up the university to ensure that those who have the capacity to take advantage of educational opportunities will not fail to find them because anything is found wanting on the part of the university.

The University of Edinburgh faces a further challenge in regard to its funding position compared with its main UK counterparts now that we have had the decision at Westminster on student fees, which will bring additional funding to its competitor universities.

The university's investment policy is the third leg to the challenges that it faces. It is an important issue not only for the students but for the academic staff and people of Edinburgh, for whom that academic institution is so much a part of Edinburgh life.

In February 2002, the student association's annual general meeting took place. It had unprecedented attendance, as around 550 people took part. They passed a motion from the People & Planet group to lobby for ethical investment on the part of the university. The level of participation in that meeting was unique in the university's many-year history.

By the time we reached November 2002, the university announced that it would make its investment portfolio public, for which we should commend it. The university agreed to publish a list of the companies in which it invested, and its board of finance agreed to that.

It is right that, as the university said, it decided to pursue issues around socially responsible investment through engagement with companies in which the university's funds were invested by the fund managers. That was certainly a step forward, but more work has to be done.

By February 2003, the ethical investment policy document had been produced by the People & Planet group. It takes political and social aspirations a step further and starts to document how an institution with a substantial investment portfolio can genuinely adopt ethical investment practices and can genuinely reflect the wishes of the people working in and around that institution.

The main points of the strategy document are quite clear. It calls for a properly established and written ethical investment policy. It states that the university should seek to use its social and economic status to influence positively public policy and corporate social behaviour. It goes on to say that the university's behaviour must be consistent with those values. It is difficult for anyone to disagree with that.

The document goes on to say that the university should actively lobby companies in the investment field. For example, the pension fund for university staff throughout the UK is already an ethical investor. There are certainly opportunities for the university's £160 million of investment funds to be used alongside the funds of other organisations in discussing and agreeing corporately what the investment strategy should be, to secure not just ethical investment with the university's funds but a degree of leverage on the major companies that other pension and investment funds use as investment vehicles. A number of companies have been singled out, such as tobacco and oil companies or those operating in the tobacco or oil sector, as companies that the People & Planet group wants to encourage to operate in a more socially responsible manner.

The next demand is that the university should establish a committee that would include student participants as well as those who could give expert advice, to help guide the ethical investment policy and to examine closely the investments and exclusions about which decisions will have to be taken as part of the policy.

The University of Edinburgh's image and reputation are at stake. It faces tough competition from its main UK competitors and from abroad and there is no doubt that that competition is about not just admissions policy and investment but the reputation and image of the university.

Although the university is trying to ensure that that it is not seen as an elitist institution and attempting genuinely to build on the success of the Lothians equal access programme for schools to broaden its access base, ethical investment and being seen to invest ethically are an important part of developing and upholding that reputation. There is no doubt that ethical investment can be as profitable as regular investment. The Ethical Investment Co-operative has produced five indices of ethical investments that exclude companies involved in a range of activities—for example, tobacco, gambling and alcohol.

Those indices have shown that it is possible for ethical investments to match the performance of the FTSE all-share index over a period of time. Since 1996, the FTSE4Good index—an index of companies that are defined as socially responsible on environmental development and human rights issues—has risen in value and has matched the performance of the all-share index. Even in the current investment climate, ethical investments have fared no worse than have general investments.

In the context of a university that is seeking a return on its investments to fund investment in infrastructure and research and to attract staff, it would be difficult to argue the case for ethical investment if it were not demonstrably possible to secure very good returns on such investment as compared with traditional investment vehicles. However, it is possible to show that such returns can be secured.

The University Superannuation Scheme, which is the investment fund for all UK university pensions, has already committed itself publicly to an ethical investment policy. It examines major oil, gas and pharmaceutical companies and has discussed issues with those companies, as well as with non-governmental organisations, the International Labour Organisation and the United Nations. All have endorsed the scheme's approach and have agreed that it is ethically sound and is producing good yields on investment.

I realise that I have overstepped slightly the time allocated to me. In conclusion, I emphasise that both the motion that we are debating and the policy that People & Planet is pursuing at the University of Edinburgh have widespread support from across the political spectrum. I hope that the university's approach of continuing dialogue with People & Planet and those who are concerned to secure an ethical investment strategy will continue. I hope that it will yield a written policy that makes clear the university's commitment not just to ethical investment of its funds but to being socially responsible in an interventionist way in the marketplace alongside other ethically motivated investment funds.

Photo of George Reid George Reid Scottish National Party

Six members have indicated that they would like to take part in the debate. That will allow speeches of about four minutes.

Photo of Robin Harper Robin Harper Green 5:03 pm, 26th February 2003

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, such as it is, is in ethical investments.

I was glad when People & Planet asked me whether I would back it in this campaign. As chair of the university court, I am supposed to stay clear of university issues and to be as objective as possible, but this is one of three or four issues about which I was happy to make my support very clear. I also took part in a debate in the university with the then principal, Lord Sutherland of Houndwood, on this very subject.

People & Planet is one of the most successful and best-attended societies in the entire university. In fact, I owe my position as rector to that society because it supported my candidature three years ago.

The importance of this matter goes beyond universities. Members may recollect that in the early days of the Parliament I lodged a motion calling on the Executive to investigate the possibility of the Executive and local authorities with surplus money investing it in ethical investment. However, it fell on stony ground at the time and never made it to the chamber. Therefore, I am even gladder about the debate and congratulate Angus MacKay on bringing this motion on the same subject to the chamber.

I cannot guess what the Executive's response to the debate might be. I hope that it recognises that not just universities can benefit from a policy of ethical investment. Encouraging such a policy would have a knock-on effect throughout the world.

Nearly four years ago, I said that the colour of politics of this century must be green, whatever one's party. There is no doubt that ethical investment can be described as a green policy. I sometimes think that, when I speak in favour of renewables or recycling, I should also state my interest in ethical investments. I hope that much of that money is invested in recycling and renewable energy companies.

Photo of Robin Harper 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 the University of Edinburgh on taking on the issue in the way that it has.

Photo of Sarah Boyack Sarah Boyack Labour 5:06 pm, 26th February 2003

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 on the evening's agenda.

The motion is an excellent example of grass-roots campaigning by People & Planet. I want to add my support for the work that it has already carried out in raising awareness of the power of the major institutions in our society to make a statement about their values and principles and to use their investment powers wisely. The People & Planet group has encouraged the deliberate use of such power, in a way that influences the financial sector and business.

It is appropriate that Angus MacKay has brought the issue to the Parliament. As parliamentarians, we can add our weight and our voices to the issues that have been raised at the University of Edinburgh.

The motion raises vital issues, such as the transparency of the way in which firms and major institutions conduct their business. It is appropriate for major institutions such as the University of Edinburgh to ask questions about firms' records on human rights, on the exploitation of workers and on pollution or irresponsible arms sales. If they get the wrong answers to those questions, they have the power not to invest in those companies. However, they need to obtain that information in the first place.

I hope that the debate will help to progress matters. We should encourage companies to adopt positive, proactive policies and to have a positive investment strategy. Angus MacKay highlighted the benefits that firms and companies that work towards socially responsible investment can gain. Such institutions attract investors. They have attracted the investments of individuals, as Robin Harper has said, and of major organisations that have serious financial clout.

Adopting a more ethical or socially responsible approach to the environment or to human rights can be good for business. It is good for a company's public relations and its reputation. Companies' adoption of such policies can help to shape the investment strategies of more conventional and mainstream companies.

I am particularly glad that the debate is being held tonight, as the European Committee is considering corporate social responsibility. We have looked at how we in Scotland can encourage companies and major public sector institutions to develop the concept of corporate social responsibility. Although the committee is near the end of its inquiry, I would like to make members aware of why it took up the issue in the first place. I suspect that there are similarities between our approach and what generated the interest of People & Planet.

The European Committee investigated the issue because it is highly conscious of the impact of global restructuring and the price that Scottish workers have paid for that. The inquiry was also inspired by our visit to the European Commission in Brussels last year. The Commission asked us to look at Scotland's contribution to generating employment, to consider issues such as equal opportunities, women's rights and access to the labour market for disadvantaged groups and to think about whether there was a Scottish approach to corporate social responsibility.

We started our inquiry against the backdrop of the work that was being done in Johannesburg at the world summit on sustainable development. The need for the environmental accountability of firms was highlighted as well as the need for firms to report annually on how they impacted locally and globally on the environment. We also highlighted how firms should try to say what steps they are taking to lessen the adverse impact of their company's work on the environment. One key issue that the European Committee considered is the role of major public sector organisations, such as the Scottish Executive or the University of Edinburgh, and how such organisations can lead the way.

I am glad to be able to support Angus MacKay's motion, and I am glad that he has brought the issue to the Parliament. I hope that by debating tonight's motion we can learn the lessons that have been learned at the University of Edinburgh and encourage other institutions to take a similar view. We need champions; we need people who are prepared to do their homework; and we need people who are prepared to raise the issue and campaign on it. I support Angus MacKay's motion and I hope that others will take the issue further, beyond the University of Edinburgh.

In his summation, I hope that Lewis Macdonald will give us some insight into how the Executive can further promote the debate.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party 5:11 pm, 26th February 2003

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 should welcome the University of Edinburgh's decision to embrace and participate in the dialogue and debate to ensure that there is ethical investment. The Deputy Minister for Enterprise, Transport and Lifelong Learning may find some challenge in responding to tonight's debate given the great deal of consensus about the importance of ethical investment and what has been achieved. I await his comments with interest.

I want to touch on several points. The fact that 500 students turned out at a meeting shows that the idea that young people do not care about the things that matter, such as human rights, is misplaced. It is clear that people care and that it is important that they be given a forum and an opportunity so that they can do something practical. The success of that meeting shows that campaigning of whatever form—whether it be political with a small p or otherwise—can achieve results. People & Planet provides a good example of how well-informed grass-roots campaigning can achieve a response, and a very positive response at that.

When, in a former life many years ago, I worked in financial services, ethical investment and green funds were seen as being something that only those who fitted a certain stereotype would want to take part in. However, over the years, ethical investment issues have increasingly become part and parcel of the fabric of investment. As Angus MacKay pointed out, just because money is ethically invested does not necessarily mean second-class investment returns. Indeed, ethical investment is becoming part and parcel of modern investment practices.

The point that was made about leverage is important. The days when investment was just about profit and when no interest was taken in whether the investment conflicted with human rights or promoted arms sales have long gone. Corporate governance, in whatever shape or form, is here to stay. Ethical investment is not just about consumer choice; it is now part of the fabric of our investment choices. Such investments are no longer simply a nice charitable thing to do but are very much something that is here to stay.

It is vital that we raise the issue of ethical investment, and perhaps especially at this time, when we reflect on the importance of human rights and on what is happening in countries such as Iraq. We must also consider what the Government itself has done and whether its ethical foreign policy has perhaps disappeared from sight.

Whenever we pontificate, congratulate, comment on or debate the policies of other bodies and organisations such as the University of Edinburgh, we also need to look at ourselves and consider the policies of the Scottish Parliament and the Westminster Parliament. I therefore ask the Presiding Officer that the Scottish Parliamentary Corporate Body consider what the Parliament itself is doing, to ensure that it makes ethical investments and promotes corporate social responsibility, so that we are not simply commenting on others in isolation.

One offshoot that might come from People & Planet's achievement is that it might make us all look more closely at what we do. I hope that we can ensure that this worthy and important debate continues. The debate is not only about how people can use their right to demonstrate to achieve change at the University of Edinburgh but about how we need to highlight the importance of fulfilling our global responsibilities. We can do that by starting at home.

Photo of David Davidson David Davidson Conservative 5:14 pm, 26th February 2003

The normal custom is to congratulate the member who has secured the debate, but tonight I would rather congratulate People & Planet, which obviously has tremendous political clout if it got Robin Harper elected. I may be accused of being cynical, but I wonder how many members from the Edinburgh area are seeking the student vote by attending the debate.

I congratulate the University of Edinburgh on its openness. However, a debate is about questioning and expressing different views. I do not think that anyone can argue against ethical investment, as we all have a conscience and the responsibility to know, as a deliberate policy, how our money is being spent.

The University of Edinburgh court has a duty to get a return on its fund. It uses professional fund managers, so presumably merely gives an indication of the area and type of investment that it would like to make and leaves the matter to the fund managers.

I take issue with Angus MacKay. I do not think that the University of Edinburgh's international reputation will be greatly affected by its ethical policy for a fund of £160 million. More important for the university's reputation is the quality of the education that it gives to those people, young and older, who study there. It is important that the university receives support so that it can continue to be a world-class centre for education.

Photo of David Davidson David Davidson Conservative

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. The policy area is not quite one for the Executive—unless it is internal. Moreover, I do not think that the Parliament has enough money to invest in the stock markets—it all seems to be going down the road into a new building.

I know the oil industry well. It is important to get across the message that the oil and chemical industries are keen on pursuing environmental and people-based activities with part of their profits and on encouraging their staff to propose such projects. Oil and chemical companies, particularly those that are based in the United Kingdom, are becoming more ethical. They are concerned about the environment and about doing good for the local population by setting up medical projects, for example. It is important that members acknowledge that many multinational corporations take that side of life very seriously.

Did Mr Fitzpatrick want to say something?

Photo of Brian Fitzpatrick Brian Fitzpatrick Labour

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 to produce good graduates. Is it not possible to do both?

Photo of David Davidson David Davidson Conservative

Both can be done together quite successfully. However, the international reputation of the University of Edinburgh—or the decision of a student who is desperate to get a high-quality education in a particular subject to go to that university—will not be based on whether it has an ethical investment policy. Such a policy is an add-on; it is not the major issue. I was just responding to a comment made by Mr MacKay.

I welcome the fact that student movements are being recognised. Young people should be concerned about the state of the world and they should be prepared to campaign, to give their views and to open minds—theirs and ours—because we can get into ruts of behaviour. It is vital that we recognise the work that People & Planet and student bodies do around the country. Some groups are political and some are social and so it goes on. University life is about young people coming together to work for a common goal. If that goal can benefit society, that is all to the good.

Photo of Susan Deacon Susan Deacon Labour 5:18 pm, 26th February 2003

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 bombarded with demands and it is significant when one of us brings such an issue into the heart of the chamber. Angus MacKay is to be congratulated on bringing the issue to the fore.

I also congratulate People & Planet and my alma mater, the University of Edinburgh, on their progressive stance. Whether we are in the Parliament or in our leading higher education institutions, it is vital that, as well as focusing on our day-to-day activities, we think about the world in which we live and take actions that will influence the world for the better. The efforts that the University of Edinburgh has made in that regard are genuinely to be congratulated.

It is worth stating why the principle of ethical investment is important. To use a much maligned phrase, I will go back to basics. It is important to remember that much of what we do in our lives—arguably all of it—is governed by a set of values and beliefs; if it is not, it ought to be. How much more important is it that decisions about money are governed by values and beliefs, whether those decisions are for us as individuals or for corporate entities? Money can and does talk and money makes a difference. When a major corporate entity such as the University of Edinburgh, with its £160 million wealth, decides to direct that resource in a way that is driven by a particular value base, that makes a difference.

I say to those who are involved in campaigning about ethical investment that I am conscious that sometimes much of what we all do in politics and more widely can feel like a thankless task—sometimes it can feel as though our actions do not make a difference. However, some members can remember being involved in comparable campaigns and activities 20-odd years ago. In my case, at the University of Edinburgh, we campaigned with some success for the university to take investment decisions based on values and beliefs. The aim was to avoid companies that invested in the apartheid regime in South Africa. That regime is no more. I believe that the campaigns and investment decisions of the time played a part in delivering that result, albeit along with myriad other small activities across the country and the world. Those who are involved in the current campaign should be encouraged. I hope that the experiences that some of us had in the past—I am starting to feel old—will provide encouragement for the work that they are doing.

I wish to say a few words about the wider issue of ethical investment, which is an idea whose time has come. It is growing in popularity. In the brief research that I did for the debate, I was struck to read that in the UK there are now more than 40 unit and investment trusts with ethical criteria and that those trusts are valued at more than £2 billion. The graphs show that there has been steady growth in the demand for ethical investment over the past decade.

I am also struck that the demand for ethical investment products is now such that it is unmet. That is encouraging. It shows that, in a world where materialism undoubtedly speaks loudly and has great influence, many individuals and corporate entities are prepared to think beyond simple financial criteria about values and beliefs. The work that the University of Edinburgh is doing in that regard is to be encouraged and welcomed and I am happy to give it my support tonight.

Photo of Donald Gorrie Donald Gorrie Liberal Democrat 5:23 pm, 26th February 2003

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 savings accounts that have actually gone down marginally less than most of the stock exchange recently. That shows that ethical investments need not be worse.

Most investment is made by pension funds. I could never understand why people who invested money from their pay in the pension fund had so little say in what happened with it. When I was a regional councillor, I was involved in the committee that oversaw our pension fund. We managed with great difficulty to get the pension fund managers to cast a vote on a motion that expressed concern about the way in which some of the companies that they invested in paid extortionate sums to their top brass. The fund managers were reluctant to do that, but we got it done. Several council pension funds took the same action, which created quite a satisfying stushie. We should consider taking such action far more often.

We subscribe to a pension fund, but what is it invested in? At Westminster and in this Parliament, an additional voluntary pension fund can be subscribed to. Each fund was cunningly invested in Equitable Life, which shows that the financial acumen that is around is not always great.

We should examine our situation and encourage other people—whether they are teachers, bus drivers or whoever—to examine what their pension contributions are invested in, because many people would be horrified at some of the investments that are made.

The fund managers say that they must obtain the highest possible return. I do not doubt that that is legally correct, but ethical companies offer just as many good options as do non-ethical companies. It would be reasonable for the people who have ownership of a pension fund to put more pressure on fund managers to invest ethically.

Ethical investment might be a reserved matter—I am not sure—but the debate should spark some interest. We should pursue how we can have our pensions and other funds in which we are involved invested ethically. Success will be achieved if we can create momentum in that direction. I congratulate the people who started off the debate.

Photo of Brian Fitzpatrick Brian Fitzpatrick Labour 5:26 pm, 26th February 2003

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 entry in the register of members' interests. I confess that I am a graduate of the University of Glasgow, but it is always nice to see a younger institution doing well.

I am pleased that David Davidson introduced some politics into the debate, because the issue involves political differences. Sometimes, members' business debates end up being nicey-nicey and do not get to the point. In listening to David Davidson, I was reassured that I still have to wonder sometimes what planet some people are on.

Angus MacKay is to be congratulated on raising ethical investing, because that is not just do-goodery or an add-on. It is a different way of doing business and of living in the world and in society. It represents a different way of making use of one's funds and involves our saying as citizens or consumers, "I'm sorry—I don't want you to do that. I would rather that you did this." Choices must be made. For Labour members, poverty and exploitation are a zero-sum game. We are against that game and think that a better game can be played. Ethical investment can be good business. It can make sense for the community, the country and the investor.

Susan Deacon was right to mention the fact that, throughout the student movement in the 1970s, 1980s and 1990s, campaigns were undertaken—matching campaigns in the trade union movement—about what was done with people's money and with universities' funds. I remember that we were told, "You can't do anything about South Africa. Don't think that you can change a powerful country such as South Africa." In Glasgow, Edinburgh and other places, we wanted to aid the African National Congress. We stood with the ANC, said that we would do something and campaigned. We should be proud of and celebrate that. That process has not ended; it continues wherever there is injustice in the world. That is why some of us entered politics. We aim not only to interpret the world, but to change it.

Ethical stances mean that some political leadership is required. We cannot tell the developing nations of Africa, Asia or Latin America to change, build their markets, develop their services and increase their products if we maintain our trade barriers and use public subsidy to keep out their products or to distort or destroy their markets. We cannot say one thing and do another. An advocacy role in how investments are made is an important aspect of keeping the debate going.

Fiona Hyslop mentioned the interface of ethics and foreign policy, which is the subject of a legitimate, if sometimes difficult, debate. Politicians can find it difficult to look beyond their local or national interest towards a global interest.

I think that some particularly brave steps have been taken in that respect. I am sure that politicians around the chamber could work together to support the millennium goals, which are probably the most ambitious global development goals that we will see in our lifetime. By our actions we can inform decisions and support the making of different decisions.

As I said earlier, we can change the world rather than simply interpret it. I do not accept that the subject that we are debating is just a reserved matter. The minister can tell us what the Scottish Executive will do in some small way to change the world.

Photo of George Reid George Reid Scottish National Party

Indeed he can. To respond to the debate, I call Lewis Macdonald.

Photo of Lewis Macdonald Lewis Macdonald Labour 5:30 pm, 26th February 2003

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 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.

Photo of Brian Fitzpatrick Brian Fitzpatrick Labour

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 employers in Scotland, as well as the further and higher education sectors, by way of the prompts that they may give to the funding councils and, indeed, to the tentative lifelong learning advisory forum that is to be created. Those are ways in which ministers can give support and encouragement to those making efforts around these aims.

Photo of Lewis Macdonald Lewis Macdonald Labour

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 instruments to hand, such as regional selective assistance, public-private partnerships, local economic forums and the promotion of community planning, which we are also undertaking. We will seek to promote corporate social responsibility via existing programmes in higher education as well as in the other areas that I have mentioned, and to take a co-ordinated approach to how we proceed. I expect that my colleagues will have more to say about how we make that progress.

The students of the University of Edinburgh have done a service to their university as well as to the wider Scottish public by drawing attention once again—as has been done several times over the years—to the desirability of ethical investment, to the desirability of greater openness about the accounts of public and other bodies and by raising debate about such important matters.

The Executive welcomes the University of Edinburgh court's decision to place information about the investment portfolio of the university in the public domain. That is very much in keeping with our general approach of supporting openness and transparency, and is in line with the emerging approach to corporate social responsibility. I look forward to others choosing to follow that good example.

Meeting closed at 17:39.