UCL joins coalition of universities pushing for more sustainable investment options

The goal is to broaden responsible investment options so that invested university funds aren’t used to finance companies that are constructing new fossil fuel infrastructure.

The coalition is led by the University of Cambridge and made up of 60 higher education institutions across the country including 21 universities.

Responsible investment has traditionally focused on equities investing, but companies constructing new fossil fuel power stations or exploring for new fossil fuel reserves generally finance these activities using debt tools such as loans and bond issuances. For this reason, the request for proposals (RfP) issued by the coalition addresses financial institutions’ lending and bond underwriting of these companies.

Presently, “pure green” investment options, free from fossil fuel interests, are difficult to find for significant pools of cash. Few of the top banks in the world and even fewer of the top asset management firms would meet all of the RfP’s criteria.

The ultimate aim of the request is to create a broad market of investment options so that cash is not used for financing the expansion of coal, gas and oil extraction, or the development of new fossil-fuel based power plants, discouraging their future construction. Burning fossil fuels contributes about 80% of greenhouse gas emissions to the atmosphere annually and is the leading cause of climate change. The RfP also seeks to motivate financial institutions to invest in renewables.

The comes as much of the higher education sector seeks to align with global efforts to reach net zero carbon emissions by 2050.

Erin Squires, Head of Treasury Management & Sustainable Finance at UCL, said: “UCL’s values include an enduring commitment to promoting environmental sustainability. UCL has a socially responsible investment policy that seeks to minimise environmental degradation. We are pleased to collaborate with our sector to find more effective ways to incentivise a shift from fossil fuels towards green energy.”

University of Cambridge Chief Financial Officer Anthony Odgers said: “What we and our partners are focussed on with this mandate is finding financial services products that do not contribute to the expansion of fossil fuels – in particular, new coal- and gas-fired plants which lock in demand for decades.”

In addition to UCL, the coalition is made up of some of the top academic institutions in the country, including the Universities of Cambridge, Edinburgh, Leeds, Oxford, Southampton, St Andrews, and Manchester, and the London School of Economics, among others.

Links

• University of Cambridge Banking Engagement Forum Request for Proposals
• Sustainable UCL

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• Credit: Mintr via iStock Photo

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Mike Lucibella

• E: m.lucibella [at] ucl.ac.uk