A group of 21 UK universities stated, in a joint statement released on 15 February, that they would cut ties with their financial providers unless they stopped financing new fossil fuel projects. The University of Cambridge is leading the coalition, which includes the University of Oxford; collectively, they manage over £5 billion. Some of the other universities taking part include Edinburgh, Leeds, St. Andrews, University College London (UCL), and the London School of Economics (LSE).This is the most substantial financial move British universities have made to date in the fight for green financing. In recent years, however, some universities have taken smaller steps such as investments aimed at renewables.
The universities’ action is an escalation in their fight against climate change. Last year “Make My Money Matter” claimed that dozens of UK universities continue to work with fossil fuel-funding institutions, even though they had committed to divesting from fossil fuels. The latest development could, however, be a first step toward aligning their actions with their statements. The Financial Times quoted Cambridge’s chief financial officer, Anthony Odgers, saying “We care about people using our money [to finance fossil fuels]. We want to have a real-world impact” since “building new infrastructure such as coal and gas-fired plants and pipelines locks in demand for fossil fuels for decades.”
The universities’ demands align with the International Energy Agency’s (IEA) plan to lower emissions to net zero by 2050. However, an analysis by “Reclaim Finance” found that among the top 100 banks globally, only the French La Banque Postale would meet the coalition’s demands. Moreover, none of the world’s top 100 asset managers appear to be meeting the universities’ demands; it would therefore be quite challenging for the universities to find competent financial institutions that meet their requirements. The lack of financial institutions meeting the IEA’s guidelines could also pose a major hurdle for the general implementation of their plan for net zero emissions by 2050.
According to a statement by the University of Edinburgh, the universities submitted a Request for Proposals (REP), which is a document that outlines and describes a project and asks for bids from qualified service providers to complete it. Financial institutions, including banks and asset managers, will have until April 8th to respond to the REP. The universities will review and evaluate these proposals but are not required to further engage with them. The University of Edinburgh emphasised that there is “a sector-wide demand for net zero aligned banking products. This collaborative approach sends a powerful message to banks and asset managers and incentivises them to prioritise products that support the net-zero transition.”
