Shareholders in the old universities' main pension scheme are expected to agree new ethical investment policies when they meet for their annual general meeting next week.
The Universities Superannuation Scheme, which owns assets of more than Pounds 17 billion, has come under increasing pressure from members concerned that it is investing in companies that pollute the environment or exploit child labour.
A report submitted to vice-chancellors and senior university staff by the campaign group Ethics for USS calls for a policy of "active investment". This would mean USS using its influence as a major shareholder and the United Kingdom's third largest private-sector pension fund to encourage responsible company behaviour.
Campaigners say it would not affect the scheme financially because the USS share portfolio would remain unchanged. They suggest that taking a greater interest in all aspects of companies in which the fund invests could even bring benefits by keeping fund managers better informed.
They want a new ethical and environmental committee to work alongside USS's existing committees and an ethical subcommittee within the investment committee.
Bill Trythall, an Association of University Teachers-appointed director of USS, said that while not all their proposals had been accepted by the USS board at its last meeting, there was strong support for a more ethical stance.
He said: "Smarter investors are going to take these things into account because they will be reflected in the share price. There is something to be said for getting into this area and understanding it sooner rather than later."
David Chynoweth, USS chief executive, said the USS was already at the forefront of moves by private pension funds to consider ethical and environmental issues.
He said next Friday's meeting would consider new ways of developing investment decisions with an ethical dimension.
Call out: one of about 15,000 students who took part in a march through London to protest against student hardship and tuition fees. The National Union of Students' National March for Education last Thursday was addressed by MPs and union
leaders. Don's Diary, page 9 and Letters, page 15