University endowments across the UK, which oversee £15bn in assets, are being urged to “radically reform” how they invest by a new student-led campaign that calls for higher education institutions to pile cash into renewable energy and social housing.
The Invest for Change campaign, which launches on Monday, reflects growing pressure on universities to invest responsibility as concerns mount about climate change and social injustice in the wake of the coronavirus pandemic.
“Students have made it clear that universities can no longer get away with investing in the climate crisis and social injustice,” said Larissa Kennedy, president of the National Union of Students. “We urgently need them to listen to students’ demands and invest in solutions to the global problems we face.”
She added: “Whether that means investing in new renewable energy infrastructure, local affordable housing developments or retrofitting public buildings, we need university money to further global efforts towards climate justice.”
The campaign, led by the Students Organising for Sustainability group and funded by Friends Provident Foundation, a charity, follows on from the successful divestment efforts that resulted in more than half of UK universities committing to ditching at least some fossil fuel holding.
The campaigners are calling for “university money to act in the interests of students, not against them”. They have urged university endowments to focus on environmental, social and governance issues in their investment decisions and conversations with companies, as well as backing so-called positive impact investments, which aim to do good as well as generating returns.
A shift in how university endowments invest would have an impact not just on the funds but also on external asset managers, who often manage money for higher education institutions.
This week, the University of Cambridge’s £3.5bn endowment, one of the largest in Europe, made the landmark decision to sell out of fossil fuels following years of protests by students and academics.
Cambridge said it would reduce greenhouse gas emissions from any company in which it invests to net zero by 2038 by measuring emissions across its portfolio, pulling money from conventional energy-focused funds and building investments in renewable energy.
Tilly Franklin, who took over as the endowment’s chief investment officer this year, said divesting from fossil fuels, a process it aims to complete by 2030, was “just a symbolic step” on the road to the fund developing a “positive screen” to make company practices more sustainable.
The University of Oxford, which along with Cambridge manages one of the largest higher education endowments in the UK, also pledged this year to sell out of fossil fuels across its £4.1bn fund. It also said it would only work with fund managers that had a plan to achieve net carbon emissions across their investments. However, the university provided few details of how it would measure this and did not set a deadline for fossil fuel divestment, according to campaign group People & Planet.
Ms Franklin said that while repositioning Cambridge’s investment portfolio would be difficult, growing agreement among investors of the imperative to act would facilitate the process. “We’re catching a wave, as the extent of this emergency is becoming widely known,” she said. “Every single institutional investor is focusing on how they can make their portfolios more sustainable.”
Colin Baines, investment engagement manager at Friends Provident Foundation, said the exclusion of fossil fuels “should just be the start of developing a robust responsible investment policy”.