In a new public letter, an investor coalition representing more than £4.5 billion in assets under management has urged the asset management industry to take bold action to halt new fossil fuel projects.
The coalition is made up of several leading universities, including Newcastle, Bristol, Sussex and Jesus and Trinity Colleges in Cambridge and major charitable foundations, including the Joseph Rowntree Charitable Trust and Jesuits in Britain. The letter – sent to each of the institutions’ investment managers and released publicly – calls on asset managers to:
- Rule out new primary market investments linked to fossil fuel expansion.
- Vote against the directors of companies pursuing or facilitating new fossil fuel projects.
- Support all climate-related shareholder resolutions, particularly those aimed at constraining companies’ involvement in new fossil fuel projects.
This letter represents the first time universities are publicly using their voice as investors to urge their asset managers to act on their scientist’s clear warnings on the dangers of pursuing new fossil fuel projects.
On halting financing for fossil fuel expansion, the signees are specifically asking for asset managers to publicly commit to halting new financing for fossil fuel expansion projects. This must include halting primary market financing to companies expanding fossil fuel output or infrastructure. Specifically, asset managers should commit to no longer purchasing new bonds associated with fossil fuel expansion projects, or issued by companies involved in constructing new fossil fuel infrastructure and/or exploring for new oil, coal or gas reserves. Divestment from existing bond holdings associated with fossil fuel expansion should also be initiated in a phased but timely manner.
This action co-ordinated by Students Organising for Sustainability’s Invest for Change campaign, with support from ShareAction – is a follow-up to the COP26 Declaration – a statement of climate-specific minimum expectations for the asset management industry. The declaration was released ahead of the COP26 climate summit and signed by dozens of leading asset owners. Yet, two years since the declaration was released, most global asset managers are still failing to meet these minimum climate standards.
This letter is the next stage of this collective engagement effort. It also follows repeated warnings from the Intergovernmental Panel on Climate Change, the International Energy Agency and other leading global experts that investment in new oil, coal or gas projects is incompatible with limiting global temperature rise to the critical 1.5 degree threshold. Meanwhile, governments and businesses are pursuing substantial fossil fuel expansion projects, with the companies involved mostly receiving steadfast support from investment managers.
Public signatories to the letter include: Jesus College, Cambridge (£215 million), Trinity College, Cambridge (£2.04 billion), Joseph Rowntree Charitable Trust (£269 million), the University of Sussex (£15.3 million), the University of Newcastle (£89.5 million), the Access Foundation for Social Investment (£31.4 million), Jesuits in Britain (£658.3 million), the EIRRIS Foundation (£490,232), The Guild of St George (£967,314), The Health Foundation (£1.231 billion).
Sonita Alleyne OBE, Master of Jesus College Cambridge, said: “Climate change is the biggest challenge facing society today and Jesus College participates in collaborative initiatives such as these, which lay out the kinds of actions asset managers must take to achieve an orderly transition to a zero carbon economy, as part of our role in meeting this challenge. We expect our fund managers to meet these minimum standards, and their ability to do so will form a part of our evaluation, monitoring and reselection processes going forward.”
A spokesperson for the University of Sussex said: “Our academics have identified new fossil fuel projects as a key threat to meeting critical global climate targets, including limiting global heating to 1.5 degrees. Asset managers, who hold trillions in investments on behalf of their clients, have a key role to play in stewarding the world’s economy away from fossil fuels. The University of Sussex, which is currently ranked third in the UK for sustainable institutions and tenth in Europe for sustainability (2022 Times Higher Education Impact Rankings), supports practical change through such initiatives, which lay out the kinds of actions asset managers must take to halt new fossil fuel projects and achieve a just, orderly transition to a zero carbon economy.”
Zak Coleman, Campaign Manager for Invest for Change at Students Organising for Sustainability UK, who helped to co-ordinate the letter, said: “The world’s leading scientists and energy experts are clear: any new fossil fuel projects will blow past critical climate goals, with catastrophic, irreversible consequences. In that context, it’s stunning that the asset management industry continues to invest such vast sums into fossil fuel expansion and consistently fails to challenge companies pursuing major new oil, coal and gas projects. Unless these common-sense requests are quickly implemented, clients who care about long-term economic sustainability, climate justice and a liveable future for all are left with little choice but to take their business elsewhere”.