Shifting the dial on money’s climate impact

The Initiative sought to ensure that continued investment in the fossil fuel sector neither commits society to dangerous anthropogenic climate change, nor requires prohibitively expensive mitigation or remediation measures from future taxpayers.

Early work by the team found that the Fifth Assessment Report of the United Nations Intergovernmental Panel on Climate Change (IPCC), published in 2015, had underestimated the total amount of carbon that can be emitted before we break the international agreement to keep global temperatures to well below 2ºC. They worked to provide estimates that are more accurate, and these findings influenced subsequent research, including the IPCC 2018 Special Report on Global Warming of 1.5°C.

It is nevertheless likely that the fossil carbon reserves owned by public or private investors likely already vastly exceed that “carbon budget”. To meet the aims of the Paris Agreement would require at least two-thirds of known fossil fuel reserves to remain unburned or, if they are burned, for the carbon dioxide generated to be safely and permanently stored out of the atmosphere. If this doesn’t happen, if the fossil fuel industry continues along its ‘business as usual' path, the global temperature will rise 1.5°C before 2040 and 2°C by the 2060s.

To prevent catastrophic climate change we must stop fossil fuels from causing global warming within 20 to 40 years. This means a shift to predominantly renewable energy sources, together with a commitment to ensure that, from mid-century, one tonne of CO₂ is safely and permanently disposed of for every tonne generated by any continued fossil fuel use. We have to unravel in half a human lifetime an energy system of extraction, processing, transportation and delivery that has taken generations to build.

The key problem is that the powerful entities that will determine if we achieve this or not, companies with fossil fuels at their heart, don’t answer to science, or politics, or public opinion – they answer to shareholders and they answer to investors. And the demands of investors and shareholders are most often for short-term increases in financial returns rather than for the long-term wellbeing of the planet – and that was the key to what the Net Zero Investment team developed next.

Although the focus of the programme was on investors and supporting them to help shift companies towards a net zero future, the simplicity and clarity of the Principles have also led to their adoption in much broader contexts.

Activist group Market Forces used the Oxford Martin Principles as a framework to analyse energy planning in Australia in their report Business as Usual: Australian companies not planning for climate change.

In November 2019 the Transition Pathway Initiative (TPI), a global initiative led by asset owners and supported by asset managers with $15 trillion of combined assets, assessed the net zero positions of 132 of the world’s largest publicly listed energy companies. Collaborating with the Grantham Research Institute at LSE and the Oxford Martin Net Zero Carbon Investment Initiative, they reviewed how the public disclosures of 20 coal companies, 62 electricity companies, and 50 oil and gas companies aligned with the Oxford Martin Principles. It revealed that just 13 had made commitments to reduce their greenhouse gas emissions to net zero.

“While it’s clear that the energy sector is far from where it should be on planning for net zero, the fact that we are beginning to assess these commitments, as well as letting companies know we are scrutinising their approach, will no doubt drive further company responses."
Adam Matthews, Co-Chair of Transition Pathway Initiative.

Oxford University’s Careers Service has also adapted the Oxford Martin Principles to help those searching for jobs on the University’s CareerConnect system understand each recruiting organisation’s stance on climate change. They now ask all companies looking to advertise positions to Oxford's students a series of questions based on the Principles. In future, students will be able to search for employers based on their answers and the Careers Service may publish the data in future careers fair booklets and similar publications.

“The Careers Service’s mission is to enable students to make well-informed decisions about their career. As part of this, we are actively exploring ways to help students learn about organisations’ approaches to sustainability. We hope that those students for whom sustainability is an important factor in their decision making will be better informed.”
Jonathan Black, Director of the Oxford University Careers Service.