The University of Glasgow should continue investing in companies that earn more than 10% of their revenue from the arms and defence industry

As part of the “No” campaign, we are often given labels by those who oppose us, which are just strawmanned buzz terms in an attempt to sway votes away not based on principle and logical reasoning, but based on emotions and temporary grievances.

However, what we would like to clarify is the fact that our opponents have NO GROUND to stand on. On paper, they will try to claim it as the “Right thing to do”, when it actually harms their side. We would like to showcase the reality of divesting, one that is based on facts.

The “Yes” campaign claimed that the University invested 6.8 million GBP into arms-based companies. This is not true; contrary to belief, the figure does not even exceed 500,000 GBP.

This is because the value of 6.8 million GBP is wrong according to multiple sources [1][2][3], and 2.5 million is actually the total valuation of the shares (in 2023) that they own of companies in the arms industry.

This IS NOT the same as investing, and we can prove it using a simple example. If our campaign, for example, buys one share for 10 GBP today, and next month the value of one share rises to 100 GBP, the equivalent claim by the “Yes” campaign would be that our campaign invested 100 GBP.

This is a fundamental error that has been carried forward, mistaking initial investment and valuation as the same thing—this is a very basic economic concept.

Thus, according to records of past investments and share prices, the initial investment does not exceed 570,000 GBP.

More than that, a common misconception is that students’ tuition funds are funding arms companies. This again is not true and involves something called the Endowment Fund.

The endowment reserve of the university consists of financial donations by individuals or companies which are to be invested. It, however, DOES NOT contain any funds from students’ tuition, meaning that no student money goes to these companies.

The potential outcome of divestment should be discussed by comparison to recent activity in the stock markets.

A divestment of ~2.5 million GBP is a weekly occurrence in the stock markets of British aerospace companies (BAE), and a divestment of £2,424,513.69 (which is almost double the University’s shares) occurred on the 12th of March [3].

As a result, the value of BAE has gone up by 0.3% the next day, which is insignificant considering that random daily value fluctuations have a standard deviation of 2%.

It should also be considered that performing a 2.5 million GBP transaction incurs banking fees in the range of 0.01-0.05% for most companies, meaning divestment would cost the university about £100,000.

In summary, if the University were to divest from defence companies completely, it would lose £100,000 in fees, and the defence companies would not even notice, as similar transactions happen every day.

However, it fundamentally revolves around a principle. The national terrorism threat level in the United Kingdom is currently classified as level 3: Substantial - indicating an attack is probable.

Furthermore, given the United States' reluctance to support Europe during times of conflict and crisis, it is now more crucial than ever for the European defense sector to receive backing from European nations and educational institutions to achieve self-sufficiency.

This debate can be illustrated through a straightforward analogy. On commercial flights, the safety briefings provided by cabin crew indicate that in case of an emergency, oxygen masks will deploy.

They explicitly instruct passengers to secure their own masks before assisting others. This is due to the necessity of being in a condition to aid those around you. If you focus solely on aiding others, you may find yourself unable to assist yourself.

Even though divestment would achieve nothing more than hurting the finances of the University, some students campaign for it as a form of virtue signalling.

Whether or not it is ethical to invest in companies that keep NATO countries safe is up for debate. We believe that this discussion should be had without reducing funding for student services.

Therefore we consider “NO” to be the referendum vote that hurts students the least.

Cambridge University (2019)

When Cambridge divested from certain companies, their shares were acquired by investors with little interest in ethical oversight. Cambridge surrendered its voice while causing no financial impact.

University of Southampton (2016)

Despite Southampton's divestment, defense companies maintained profitability without interruption. Institutional divestments have shown minimal impact on the well-capitalized defense sector.

Brown University Research

Brown University rejected divestment after comprehensive analysis, concluding it represents only a symbolic gesture with minimal practical impact on corporate behavior.