Ten higher education providers have signed a declaration of “climate expectations” for investments, setting out minimum standards expected for companies that manage their endowment funds.
The declaration responds to concerns that the asset management industry is “claiming to support the Paris Agreement” but warns of “greenwash” among the “huge variance in policy and practice”.
The declaration is the product of a partnership between Students Organising for Sustainability UK (SOS-UK), Friends Provident Foundation (FPF), The Charities Responsible Investment Network (CRIN) and Responsible Investment Network – Universities (RINU).
The Universities of Bristol, Lancaster, Newcastle, Reading, Sheffield, Sussex, Winchester, and the West of England were joined by Jesus College, Cambridge and St Anne’s College, Oxford in signing the new fledgling declaration.
The Net Zero Asset Managers Initiative’s (NZAMI) progress report found that only 35% of assets under management were managed in line with net-zero goals.
SOS–UK said the signatories – including charitable trust and funds like the Joseph Rowntree Foundation – represent hundreds of millions of pounds in collective investments.
We expect managers that claim to support the Paris climate agreement or net-zero targets to vote in favour of aligned shareholder resolutions. It is incredulous that so many managers vote against their stated climate objectives, often more than they vote for them
– Colin Baines, Friends Provident Foundation
Colin Baines, investment engagement manager at Friends Provident Foundation said: “The variance in standards from asset managers making similar climate commitments and claims is huge. As asset owners, we wish to send a strong market signal and draw a line on greenwashing by establishing a baseline to judge them against.
“For example, we expect managers that claim to support the Paris climate agreement or net-zero targets to vote in favour of aligned shareholder resolutions. It is incredulous that so many managers vote against their stated climate objectives, often more than they vote for them.”
Asset managers should invest all assets in firms that target a 45% reduction in emissions by 2030 and net-zero by 2050. The signatories will expect the handlers of their investments to invest in solutions to climate change and take a “comply or explain” approach when faced with shareholder resolutions on climate change.
The University of Bristol announced it would divest from fossil fuel companies in 2018. It appointed a specialist ethical, sustainable investment firm to oversee its interests.
The University of Sheffield announced it was divesting from fossil fuel companies in 2015. It said it was adopting the declaration “to ensur[e] the university’s investments are managed sustainably and responsibly”, because asset managers are “failing to address the climate crisis with appropriate urgency”.
Jo Jones, chief financial officer at the University of Sheffield said: “We know how much our students care about this issue and want to see their university taking active steps to reduce reliance on fossil fuels.”
“We’re now working with our students to explore net-zero endowment investments [that] can be used to support companies that have a positive environmental and social impact.”
Professor Julie Sanders, deputy vice-chancellor and provost at Newcastle University, said: “We are committed to reducing the carbon intensity of our investment portfolio and realising opportunities to have a positive contribution to the net zero transition through our investment decisions. Supporting this declaration strengthens the basis on which we continue to engage with our fund managers on the urgent action needed to respond to the climate and ecological crises.”