Professor of Geosystem Science
Stabilising global temperatures and avoiding dangerous changes in the climate requires net carbon dioxide emissions to be reduced to zero. Getting to zero emissions will require dramatic changes in investments and in energy systems, which carry their own risks.
The transition to a safe climate future is all the more challenging because existing fossil carbon reserves, owned by public or private investors, likely already vastly exceed the amount that can be used if we are to meet the internationally-agreed goal of keeping global temperatures of well below 2ºC.
Investments in infrastructure, both in the energy sector and the broader economy, risk “locking in” emissions that exceed a safe cumulative total. How should investors respond?
Many are already attempting to divest from coal or from all extractive fossil fuel operations. There is considerable interest in “low-carbon” investment opportunities, but less clarity on the longer-term question of how investment can provide a route to a zero carbon economy. Some argue that what is needed is active engagement with the fossil fuel industry and that divestment only will not bring the required changes as long as the world economy remains overwhelmingly fuelled by fossil energy. Academics from the Universities of Oxford, Harvard and Columbia are consulting with the scientific and investment communities in combination with fossil fuel industry stakeholders to address the issues involved.
This Initiative aims to address a number of specific questions:
The Oxford Martin Net-Zero Carbon Investment Initiative has been working closely with leading international governance initiatives on corporate carbon and climate risk disclosure, including the Financial Stability Board's Task Force of Climate-related Financial Disclosures (TCFD), and remains focused on embedding sound climate science within such international frameworks.
In February 2018 the programme launched The Oxford Martin Principles for Climate-Conscious Investment. Shortly after, following advocacy by the College’s undergraduate body, St Hilda’s College (University of Oxford) rewrote its investment policy and became the first institution to adopt the Principles as a framework to shape its investment decision-making. Specialist asset manager, Sarasin & Partners, have also implemented the Principles to guide their new Climate Active Endowment Fund.
Faced with climate change today, companies and investors face many complex ethical questions. Should investors continue to invest in fossil fuels? How should investors manage the legal and financial risks of the internationally-agreed transition to net-zero emissions?
In response to a very different moral dilemma in the 1970s, the Sullivan Principles were developed to help investors and companies by providing a practical set of guidelines on how to engage with businesses in the South African apartheid regime.
A new set of principles are needed to address the moral challenge of climate change. These are the Oxford Martin Principles for Climate-Conscious Investment developed by the Oxford Martin Net Zero Carbon Investment Initiative.
The principles, published in Nature Climate Change, are as follows:
1. Commit to reaching net zero emissions from their business activities
2. Develop a plausible and profitable net zero business model
3. Set out quantitative mid-term targets compatible with their net zero goals
The Oxford Martin Principles were also used by activist group Market Forces as a framework to analyse energy planning in Australia in their report Business as Usual: Australian companies not planning for climate change.
Professor Myles Allen, Lead Researcher on the Oxford Martin Programme on Net Zero Carbon Investment, and co-author of the 2018 Oxford Martin Principles for Climate Conscious Investment on why financial institutions should stay engaged with the fossil fuel industry and adjust their approaches in order to hold fossil fuel companies responsible for resolving the waste produced by their products.
New College, Oxford, has adopted a Responsible Investment Policy that incorporates the Oxford Martin Principles for Climate-Conscious Investment, one year ahead of the COP26 Conference, which will take place Glasgow next November.
The Oxford Net Zero initiative draws on the university’s world-leading expertise in climate science and policy, addressing the critical issue of how to reach global ‘net zero’ – limiting greenhouse gases – in time to halt global warming.
It’s not often that environmental campaigners find themselves siding with the CEO of one of the world’s largest mining firms.
We do not know when human-induced warming will reach 2 degrees, but we do know that net CO2 emissions will have to reach zero by then if warming is to be limited to 2 degrees. Human-induced warming increased by one-tenth of a degree between 2009 and 2015, closing the gap to 2 degrees by 10%. So any country or company that committed to limit warming to 2 degrees in 2009 should be 10% of the way through a plan to achieve net zero CO2 emissions.
The Oxford Martin Net Zero Carbon Investment Initiative will continue to maintain this index as a service to policy-makers, investors and the public, tracking progress to a safe climate.
A survey of the net zero positions of the world’s largest energy companies
Fossil Fuel Divestment and Engagement on Climate Change: advice for investors
Science-based or scenario-based? Corporate investment for a stable climate
Oxford Martin Principles for Climate-Conscious Investment
Principles to guide investment towards a stable climate
Can we hold global temperatures to 1.5ºC?
Working Principles for Investment in Fossil Fuels
How many degrees to net zero?