UPDATED: May 24, 2012, at 10:40 p.m.

0n April 3, approximately 25 students, including members of the Student Labor Action Movement, union organizers, and Harvard employees, gathered in front of Massachusetts Hall to celebrate Harvard’s decision not to reinvest in HEI Hotels & Resorts—a hotel chain that had come under fire in recent years for repeated allegations of failure to comply with labor regulations.

Five months earlier, many of the same students had spent the fall campaigning against Harvard’s holdings in HEI with the Occupy Harvard movement, which listed non-reinvestment in HEI among its original demands drafted in November 2011.

But while student advocates had been pushing for Harvard not to reinvest in HEI because of ethical concerns, Harvard Management Company President and CEO Jane L. Mendillo stressed that HMC’s decision had been based purely on financial considerations.

“Importantly, this decision was based on factors related to the HMC portfolio and its strategy and needs; not on concerns about HEI’s practices,” Mendillo wrote an email to University President Drew G. Faust.

The discrepancy between Occupy and HMC’s reasoning on HEI is emblematic of a deeper disconnect that exists between the investing philosophies of activists and of HMC portfolio managers. While many students are pushing for Harvard to embrace socially responsible investment standards, HMC insists that its primary responsibility is to generate strong returns for the University, not to advance social change through the markets.

Over the past year, the push for SRI—which encourages the incorporation of environmental, social, and governance concerns into a company’s evaluation of investments—has gained momentum on Harvard’s campus, culminating in the founding of a new group called Responsible Investment at Harvard. RI members say HMC, which is tasked with overseeing the investment of Harvard’s $32 billion endowment, needs to create a transparent and consistent policy that more closely reflects the University’s values in the educational sphere.

Mendillo says the group already “integrates sustainable investment considerations into all of its investment decisions.” But RI says that given the company’s limited transparency, it is impossible to judge the degree to which Harvard considers responsible investment factors.

Despite the increased focus on responsible investment, there remains a lack of consensus among activists and University administrators about what it would entail for Harvard to be socially responsible or sustainable in its investing strategy. And because HMC is reluctant to share information relating to its investments, the University’s current approach to investments may be more socially conscious than advocacy groups realize.

DEFINING RESPONSIBILITY

As Occupy Harvard firmly planted itself in the Yard and tensions between protesters and University administrators mounted, the idea for Responsible Investment at Harvard began to form.

“People just started talking about these ideas,” said Senan Ebrahim ’12, former UC president and one of the group’s founders. “Our class has a certain perspective that we can be agents for a positive change in the world.”

RI was founded in the fall with the goal of “changing the way Harvard manages its money.” Since then, 32 student groups have pledged support for RI’s mission. Building on this wave of support, RI launched the Fair Harvard Fund, a campaign for a Social Choice Fund within Harvard’s endowment that would be invested with an eye toward social good. As of mid-May, the fund had raised almost $10,000 from more than 400 donors.

Faust says the University will look into the possibility of creating a fund similar to the one requested by RI “for those who wish to donate in that way.”

“We just have to figure out what the various pros and cons are,” she says.