Leeds University is selling its tobacco company shares, it announced this week. The decision follows a lengthy campaign by students unhappy about the institution's practice of investing more than £1 million in cigarette companies.
Vice-chancellor Sir Alan Wilson said: "Our decision was made on a matter of principle and in recognition of our social responsibilities."
He said the university had a long-standing policy of not accepting research grants from tobacco companies and the decision to pull endowment funds out of the same companies was an extension of this. About 3 per cent of the university's £52 million endowment funds are invested in tobacco.
Professor Wilson stressed that the university's endowment funds were invested in a wide range of companies and they could not be seen to endorse every action taken. But he said the university did reserve the right to disinvest from or not to invest in companies that repeatedly conducted their business in an unethical manner.
Joe Caluori, student union education officer and a member of the university's investments committee, said the union was proud of the bravery and conviction shown by the university council in taking this "monumental decision".
"By disinvesting from tobacco stocks, the university is showing that it is serious about the socially responsible investment policy it passed at the end of the past academic year," he said. "We are hopeful that we can build on this decision by highlighting the activities of companies that breach this policy."
Mr Caluori said Leeds had taken a national lead by putting ethical considerations and student opinion on a par with the economic considerations that governed previous investment policy.
"At a time when students are generally portrayed as apathetic, this decision shows that when students care about an issue and constructively engage with large structures such as universities, they can make a huge difference".