An investigation by The Gryphon has found that the University of Leeds has invested £749,822 in tobacco giant Altria, against University policy, alongside investments in several other controversial businesses as part of the University’s multi-million pound investment portfolio.
Investments in Altria, the company that produces popular cigarette brands such as Marlboro, Parliament, and Chesterfield, account for 1.15% of investments. This investment contravenes a policy to disinvest in tobacco stocks taken by the University Council on November 8th 2001 following a lengthy campaign by students unhappy with the institution’s investment habits. At the time investments in tobacco accounted for 3% of the University’s £52m portfolio. Speaking at the time, then Vice-Chancellor Professor Sir Alan Wilson had said, “Our decision was made on a matter of principle, and in recognition of the social responsibilities of a leading university.”
A Freedom of Information Request has also revealed that the University is a stakeholder in several fossil fuel producers, the world’s largest defence contractor, companies at the heart of recent financial scandals and tax avoidance claims, and a mining company with allegations of illegal dealings with rogue states and paramilitaries.
Figures from the end of May 2015 show the University has an investment portfolio of £65,015,550 in a variety of international businesses. The largest single investment being the £1,885,509 invested in the Vodafone Group which constitutes 2.9% of the overall portfolio. Vodafone has been criticised for several years over allegations it has been paying ‘little to no corporation tax’.
The portfolio also sheds light on the University’s investments in companies accused of aggressive tax avoidance in recent years. Shares are held in Google, who last month were accused of cutting ‘sweetheart deals’ when an agreement was reached with HMRC to make a payment of £130m ‘in respect of previous years’. With investments also made in amazon.com, who in 2014 paid a tax bill of £11.9m despite recording sales of £5.3bn in the UK as these sales were taken through Amazon’s Luxembourg company, Amazon EU Sarl. The University has retained shares in Tesco from 2014, with the supermarket giant also criticised for similar use of tax havens in recent years.
Other investments include Lockheed Martin, an American aerospace, defence, security, and advance technologies company, that based on revenue for the 2014 fiscal year was the world’s largest defence contractor. In 2013, 78% of Lockheed Martin’s revenues came from military sales, with US government contracts accounting for 85% of its business in 2009. Lockheed Martin is also the company behind the design and construction of the Trident ballistic missile system.
As an agreement has yet to be reached between LUU and the University on divestment from fossil fuels, the University still holds investment in several companies responsible for the extraction of fossil fuels. Investments in BP, Shell, Rio Tinto, Umicore, BHP Billiton, and Glencore, show that the University’s investments in fossil fuels is substantial.
The University has invested in BP for several years, with the oil and gas giant donating £700,000 to the University between 2009 and 2012. However, investments in several other companies in this field are more recent. Several of these companies have also had damning allegations made against them in recent years. Glencore has been accused of ignoring UN law in dealing with rogue states such as apartheid South Africa, Iran, and Iraq under Saddam Hussein. A BBC investigation in 2012 claimed to have uncovered sale documents showing the company had paid associates of paramilitaries in Colombia. This followed a Colombian Court accepting evidence from former paramilitaries who claimed they had stolen land to sell to Prodeco, a subsidiary of Glencore, to start an open-cast coal mine in 2011. However, Glencore has repeatedly refuted all such allegations against it, and in a statement have said,
“These allegations are untrue. Neither Prodeco nor its parent company Glencore have ever had any links with paramilitaries whatsoever.”
Last year the University informed The Gryphon that investments are informed by the University’s Policy of Socially Responsible Investment, a policy also introduced in 2001. This policy is overseen by the University Council and is designed to ensure that investment managers take account of social, environmental and ethical considerations.
Speaking to The Gryphon, LUU Union Affairs Officer, Toke Dahler, said,
“I find this news deeply worrying. Students have said time and time again that they care about how the University invests its money, and want them to show responsibility and leadership both in the local and the global community.”
“The Union’s stance on tobacco investments has not changed in the past 15 years – this type of investment should not be happening. Similarly, we are continuing to follow through on our policy mandate and push the University to divest from fossil fuels. If anything, this investigation shows that we need to continue lobbying the University on crucial areas such as these.”
A spokesperson for the University said: “In common with other higher education institutions, the University and its advisors have a duty to students, staff and stakeholders to maintain the financial health of the institution in a competitive market. One of the ways in which we do this is by investment through the Leeds University Endowment Fund. Our investments are informed by the University’s Policy of Socially Responsible Investment, which is regularly monitored and reviewed by the Treasury Management Group.
“We make it clear to our investment managers that they must take account of social, environmental and ethical considerations when selecting investments, and encourage them to actively engage with companies to raise standards where appropriate.”
Benjamin Cook