The proposal calling for Penn to divest its $7.7 billion endowment from tobacco companies died without a vote at Friday’s Board of Trustees meeting.
The decision follows an overwhelming wave of divestment support within the Penn community. The University Council saw a 51-6 vote in favor of divestment, and 530 senior Penn faculty members signed an open letter supporting the proposal. In February, the Faculty Senate voted unanimously in support of tobacco divestment.
Board Chair David L. Cohen recognized the detrimental health effects of tobacco, but said that it does not constitute a “moral evil.” According to Penn’s divestment policy, areas being considered for divestment must qualify as “a moral evil implicating a core University value that is creating a substantial social injury.” Cohen also stressed that the Trustees are obligated to the growth and protection of the University’s endowment.
“We are stewards of funds contributed by our donors,” Cohen said.
The policy guidelines also specify that because of the Trustees’ fiduciary obligation, there is a “strong presumption against the University making investment decisions based upon political, social or ethical positions held by members of the community.”
“I am no fan of tobacco,” Cohen said at the meeting. “But the fact is the manufacture, sale and use of tobacco products is legal in this country.”
Faculty proponents of divestment saw their efforts rendered moot in a less than 10 minute discussion by the Board.
“It appeared to me that the strong majority of the University community was strongly supportive of the proposal,” Engineering professor and Faculty Senate Chair Dwight Jaggard said in an email. “I was disappointed that the Trustees did not approve the divestment proposal, especially as we are about to enter the Year of Health at Penn.”
Penn President Amy Gutmann did not speak on divestment at Friday’s meeting. In February, she was one of two University Council members to abstain from the vote the issue.
Cohen presented alternative methods through which the University can express concerns about tobacco, including sharing the divestment proposal and trustee views with Penn’s current investment managers and discouraging the use of tobacco within the University.
“I think it’s a very important statement for the University to make a statement against tobacco, but I think it has to stop short of divestment,” former Board Chair James Riepe said.
Philosophy professor Michael Weisberg — who chairs Penn’s Social Responsibility Advisory Committee and has been a strong voice in favor of divestment — said that although full divestment is off the table, he was pleased at the Trustees’ proclamations of prospective divestment — which will include encouraging investment managers not to buy tobacco stock and using its proxy votes in tobacco companies to advance its views on tobacco.
“We certainly moved the trustees very far from where they started,” Weisberg said.
Newly elected Vice Chair Andrea Mitchell also spoke in accordance with Cohen’s points.
“As a cancer survivor and someone who has advocated against tobacco use professionally... I feel that the steps you have outlined are a more effective way for the University to take action,” Mitchell said.
After the brief discussion, Cohen asked the board members if any would like to put forward a resolution for tobacco divestment. None of the roughly two dozen trustees did.
Faculty proponents of divestment have argued that tobacco companies employ marketing and business strategies that are morally evil, including the aggressive marketing of harmful products to children in the developing world.
Of Penn’s peer institutions that have debated tobacco divestment, Yale was the only university to decline. Harvard, Columbia, Dartmouth, Brown, Stanford and Johns Hopkins have all voted to divest. Of the top five medical schools, Penn is the only one lacking a divestment policy. Cohen argued that the impact of peer institutions’ divestment from tobacco has been “negligible.”
In the past, the University divested from companies in response to genocide and apartheid — “moral evils” that the Board of Trustees classified as being in a category separate from tobacco.
Pediatrics professor and Director of the Department of Medical Ethics at CHOP Chris Feudtner — one of the faculty authors of a letter supporting divestment — sees some benefit to the Trustees’ discussion.
“While these steps do not constitute total divestment, they represent a victory for better aligning our institutional values and actions,” Feudtner said.
Despite the wide faculty support for divestment, it is unclear whether those in support will continue to push the Trustees for complete divestment after Friday’s conclusive discussion.
“Given how definitive they were… I don’t think we’ll be pushing this again in the near future,” Weisberg said.