The University of Oxford today announced that its endowment fund managers will be instructed to divest from fossil fuels and adopt a net zero investment strategy based on the Oxford Martin Principles for Climate Conscious Investment following the passing of a resolution by Congregation.
The resolution, brought by the student-led Oxford Climate Justice Campaign, was the product of intensive engagement between stakeholders, including the Student Union Vice President for Charities and Communities, members of the Oxford Martin School and Smith School of Enterprise and the Environment, and OUem, who manage investments for the University in the Oxford Endowment Fund (OEF). Over £3bn of endowment is managed for the University in the OEF, and many of the colleges and other trusts across the University.
The full set of measures includes:
1. Divestment from the fossil fuel industry, including but not limited to the Carbon Underground’s top 200 and an immediate restriction on new investments in fossil fuel extraction companies or funds which invest primarily in them.
2. Active engagement with fund managers per the Oxford Martin Principles, requesting evidence of net zero business plans across Oxford’s entire portfolio of investments. Investments will be reviewed and reallocated as appropriate.
3. The Investment Committee will create a third nominated member with recent and relevant expertise in climate-conscious investment to review and engage with progress on divestment and engagement with the Oxford Martin Principles.
Developed by the Oxford Martin Net Zero Carbon Investment initiative and published in January 2018 in Nature Climate Change, the Oxford Martin Principles for Climate Conscious Investment are a set of scientifically-grounded tools for the use of both investors and companies to assess corporate strategy with a focus on the need to reduce net greenhouse gas emissions to zero, as is required by Article 4 of the Paris Agreement.
The principles are:
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 goal
Requiring the demonstration of these three principles from companies goes beyond divestment alone. It means that investors can manage climate risk in their portfolios and apply pressure to companies to plan for a net zero future without ceding financial leverage to less ethically-minded investors who purchase divested stocks.
“In applying the Oxford Martin Principles to their investments, the University is taking a rigorous, science-based approach which requires the companies in which they invest to be aligned with the Paris Agreement,” said Rupert Stuart-Smith, doctoral student on the Oxford Martin Programme on the Post-Carbon Transition, who developed an investment strategy based on the Oxford Martin Principles with St Hilda’s College as an undergraduate - the first strategy to adopt the principles. "This new policy ensures that Oxford will divest from the fossil fuel industry and, crucially, will engage robustly with all other companies unless they bring forward a plausible plan to eliminate their net emissions of carbon dioxide by around 2050. By taking this stance, Oxford is acting on the findings of its researchers, insulating itself from the financial risk of continued exposure to firms which don’t have a plan to achieve the goals of the Paris Agreement, and rejecting the damaging consequences of unmitigated climate change."
Professor Cameron Hepburn, Co-Director of the Oxford Martin Net Zero Carbon Investment Initiative added, “It is excellent that we are also taking a logical and hard-nosed approach to the impact of our endowment. The proposed combination of divestment and engagement around net zero is more powerful than either strategy alone.”
Professor Louise Richardson, Vice-Chancellor of Oxford University, said “Oxford leads the world in many areas of environmental research and science such as climate economics, biodiversity, resource security, transition in energy use and climate change modelling. Today’s announcement, coupled with Oxford’s world-leading research, puts the University in a strong position to act as a world leader in climate-conscious investment.
“I would like to thank our University community, particularly our student-body and OUem, for their tireless work in this area. The measures announced today will codify the good practice already in place and encourage its expansion across the University. I am very pleased that we have taken these steps.”
Earlier this year Oxford University’s Careers Service also adopted the principles to enable students to assess potential employers’ sustainability credentials. The questions will be asked to any recruiter wishing to post a vacancy on the University’s CareerConnect system.