Seventy one leading
institutions and trusts in UK Higher Education, including the Universities of
Cambridge, Edinburgh, Leeds, Oxford, Southampton, St Andrews, Westminster and
University College London, have collaborated on a new effort to create a market
for cash products that do not contribute to the financing of fossil fuel
expansion.
The institutions are especially keen to
avoid financing companies that are constructing new coal- and gas-fired power
plants in OECD countries. New fossil fuel infrastructure can lock in decades of
fossil fuel demand and subsequent greenhouse gas (GHG) emissions that are the
main cause of climate change.
The institutions have issued a Request for
Proposals (RfP) to financial institutions for cash products such as deposits
and money market funds.
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.”
Responsible investment is a mainstream part
of equities investing, but it is still not widespread in the debt markets even
though a large majority of the new capital for companies constructing new
fossil fuel power stations or exploring for new reserves comes from debt.
For this reason, the institutions behind
the RfP have focused on banks and the bond market as the primary sources of
external financing for fossil fuel expansion. Fossil fuels are responsible for around 80%
of GHG emissions globally.
The RfP criteria are based on the
International Energy Agency’s (IEA) Net Zero Emissions by 2050 Scenario and
are in line with emissions reductions laid out in the Intergovernmental Panel
on Climate Change (IPCC)’s Sixth Assessment Report.
University of Cambridge Head of Group Treasury Heather Davis said:
“The University treasurers in this group all share a common goal,
which is to manage money in a way that doesn’t contribute to the financing of
fossil fuel expansion and to find something that aligns with the IEA Net Zero Emissions
Scenario, and that is lacking in the cash space at present.”
The RfP is also an effort by institutions
to direct funding towards the much-needed construction of renewables to
accelerate the rapid energy transition away from fossil fuels, and particularly
in areas where finance is a key constraint for growth, such as in low-income
countries.
The initiative continues to attract signatories, with additional institutions signing up after publication of the RfP.
The institutions participating in the RfP are:
Bath Spa University
Birkbeck, University of London
Bournemouth University
Brasenose College, Oxford
Cambridge University Press & Assessment
Cardiff University
Christ's College, Cambridge
Churchill College, Cambridge
Clare College, Cambridge
Clare Hall College, Cambridge
Corpus Christi College, Cambridge
Corpus Christi College, Oxford
Darwin College, Cambridge
Downing College, Cambridge
Emmanuel College, Cambridge
Falmouth University
Fitzwilliam College, Cambridge
Girton College, Cambridge
Gonville and Caius College, Cambridge
Hughes Hall, Cambridge
Jesus College, Cambridge
JISC
King's College, Cambridge
London School of Economics
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Lucy Cavendish College, Cambridge
Magdalene College, Cambridge
Manchester Metropolitan University
Merton College, Oxford
Newcastle University
Newnham College, Cambridge
Nottingham Trent University
Oxford Brookes University
Pembroke College, Cambridge
Peterhouse, Cambridge
Queens' College, Cambridge
Robinson College, Cambridge
Royal Holloway University
Selwyn College, Cambridge
Sheffield Hallam University
Sidney Sussex College, Cambridge
St Antony's College, Oxford
St Catharine's College, Cambridge
St Edmund Hall, Oxford
St Edmund's College, Cambridge
St John's College, Cambridge
Swansea University
The Gates Cambridge Trust
The Isaac Newton Trust, Cambridge
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The Open University
The Queen's College, Oxford
Trinity College, Cambridge
University of Exeter
University of Gloucestershire
University of Leeds
University of Manchester
University of Oxford
University of Reading
University of Southampton
University of St Andrews
University of Sussex
University of the Arts London
University of Westminster
University of York
Wolfson College, Cambridge
Worcester College, Oxford
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