Scope

The policy on Social Responsibility and Investment Considerations applies to the invested assets of the University of Wisconsin System Trust Funds and to individuals interested in providing input regarding the corporate policies or practices of the companies and other entities in which the University of Wisconsin System invests.

Purpose

The purpose of this statement is to communicate the Board of Regents’ policies and practices for considering the various aspects of the social responsibility of the companies, governments, or other entities in which it invests University of Wisconsin System Trusts Funds.

Policy Statement

The Board of Regents of the University of Wisconsin System, in discharging its fiduciary responsibilities for UW System Trust Funds, will take into account concerns about corporate and other security issuers’ social responsibility as outlined below.

  1. The primary fiduciary responsibility of the Board of Regents is to maximize financial return on invested assets, taking into account an appropriate degree of risk.
  2. However, the Board acknowledges the importance of maintaining an awareness of public concerns about corporate policies or other security issuers’ policies or practices that are discriminatory [as defined by s. 36.29(1), Wis. Stats.] or cause substantial social injury¹.
  3. To enhance the Board’s awareness of social concerns the Board of Regents, through the Business and Finance Committee, directs the University of Wisconsin System Trust Funds Office to conduct a proxy review to highlight shareholder proxy resolutions involving some aspect of social responsibility (e.g., those related to discrimination, environmental degradation, or other potential causes of substantial social injury). Such proxy proposals will be voted in accordance with the guidelines provided in Regent Policy Document 31-10, “Proxy Voting.”
  4. The Regents also wish to solicit input from students, faculty, alumni and citizens on matters related to social concerns. To obtain this input, the Business and Finance Committee of the Board of Regents may schedule a public forum at the request of parties interested in presenting such concerns to the Board. The purpose of this forum is to offer the broadest opportunity for University of Wisconsin System constituencies to present such information to the Board of Regents.
  5. Cognizant of the University of Wisconsin System, state, and federal commitments to environmental protection, the Board of Regents Business and Finance Committee, in discharging its responsibility for managing the University of Wisconsin System Trust Funds, does so with the expectation that the companies and other entities in which it invests will evidence a similar commitment in their respective activities. In the event that any persons or group of persons, after careful investigation and evaluation of facts in evidence, concludes that a company in which the University of Wisconsin System Trust Funds has investments appears not to be performing in accord with the Committee’s expectations and the appropriate governmental standards in this area, the Committee will afford those persons an opportunity to detail their evidence and concerns to the Committee. The Committee may afford the company or other entity involved an opportunity to respond to the concerns expressed, before deciding what course of action is appropriate.
  6. In accordance with s. 36.29(1), Wis. Stats., all investments “…made in any company, corporation, subsidiary, or affiliate that practices or condones through its actions discrimination on the basis of race, religion, color, creed or sex. . . .” shall be divested in as prudent but rapid a manner as possible. The Board of Regents, to facilitate the application of this statute, interprets the language above as follows:
    1. The words “that practices or condones through its actions” shall be interpreted to mean “employing persons in nations which by their laws discriminate on the basis of race, religion, color, creed or sex.”
    2. The University of Wisconsin System’s investment counsel and its Trust Officer shall bring to the attention of the Business and Finance Committee reports of the existence of laws in any other country that require companies doing business in such country to practice or condone discrimination on the basis of race, religion, color, creed or sex. The Business and Finance Committee shall investigate such reports with a view toward determining whether this subsection shall be applied to investments in companies employing persons in the country in question.
  7. The Regents are aware that a position on social responsibility may affect potential contributors to the University System. For potential contributors who wish their donations to be invested in funds with social concerns as a high priority, University of Wisconsin System Trust Funds staff may explore the use of investment alternatives to meet such objectives.

Oversight, Roles and Responsibilities

The Board of Regents has ultimate fiduciary responsibility for the management and administration of the University of Wisconsin System Trust Funds. The Board’s Business and Finance Committee is delegated oversight of the management and administration of the Trust Funds. The UW System Trust Funds Office is responsible for conducting proxy reviews and exploration of socially responsible investment alternatives. The Executive Director and Corporate Secretary of the Office of the Board of Regents has responsibility for scheduling requested public forums under Section 4 of this policy.

Related Regent Policies and Applicable Laws

RPD 31-2, Management and Administration of Trust Funds
RPD 31-10, Proxy Voting
RPD 31-16, Sudan Divestment
Section 36.29, Wis. Stats.

 

¹“Substantial social injury” with regard to corporate or other security issuers’ behavior is defined as the injurious impact on employees, consumers, and/or other individuals or groups resulting directly from specific actions or inactions by a company. Included in this category are actions that violate, subvert, or frustrate the enforcement of rules of domestic or international law intended to protect individuals and/or groups against deprivation of health, safety, basic freedoms or human rights. Only actions or inactions by companies that are proximate to and directly responsible for identifiable social injury will be regarded as falling within these guidelines. (This definition is borrowed from the Stanford University “Statement on Investment Responsibility Concerning Endowment Securities”).

 

History: Res. 695, adopted 03/08/1974, created Regent Policy Document 74-3(a), subsequently renumbered 31-5. Res. 1590, adopted 02/10/1978 created Regent Policy Document 78-1 and replaced Regent Policy Document 77-4; subsequently renumbered 31-6. Res. 1615, adopted 03/10/1978, created Regent Policy Document 78-2; Res. 6626, adopted 03/11/1994, amended 78-2; subsequently renumbered 31-7. Res. 7406, adopted 03/07/1997, created Regent Policy Document 97-1, subsequently renumbered 31-13; Res. 9505, adopted 06/06/2008, amended Regent Policy Document 31-13; Res. 9909, adopted 04/08/2011, amended Regent Policy Document 31-13; Res. 10119, adopted 10/05/2012, rescinded Regent Policy Documents 31-5, 31-6, and 31-7, and amended Regent Policy Document 31-13 to incorporate portions of the rescinded policies. Res. 10603, adopted 12/11/2015, amended Regent Policy Document 31-13.