Imperial announces carbon ‘cap’ on investments

The university will also draft net-zero rules for accepting research funding from fossil fuel companies

Imperial College should place a carbon emissions “cap” on its endowment fund and put sustainability rules on accepting research funding from industry, or it chances “considerable reputational risk”, a group of academics at the university has recommended.

The group commissioned by Imperial said the university was in an era where organisations face “increasing pressure” to take responsibility for the environmental impact of investments.

It also suggested Imperial needs rigorous sustainability criteria for accepting research funding from fossil fuel companies.

Imperial will not divest from fossil fuel companies, it announced last year – but commissioned a group of academics to consider how to manage the portfolio in line with a new socially responsible investment (SRI) policy.

Imperial’s president’s board has committed to implementing the report’s recommendations.

The group said if the university was not to divest immediately, it should target reaching a net-zero footprint for all its investments by 2040. “Not addressing [the carbon footprint of Imperial investments] brings considerable reputational risk,” the academics warned.

Many universities have divested – or announced plans to divest – from fossil fuel companies. By the beginning of 2020, more than half of UK universities had publicly committed to divesting from fossil fuels. A campaign for the Universities Superannuation Scheme to divest its considerable £1.17-billion-stake in fossil fuel companies has won the backing of the University of Bristol. USS announced it will divest from some controversial industries, including tobacco companies, some weapons manufacturers and thermal coal producers. Its decision was motivated by a desire to move away from “financially unstable” markets, the scheme explained.

As of July 2020, fossil fuel companies made up 0.5% of the Imperial portfolio and 0.8% of its public equity investments.

At Imperial, we have the knowledge, expertise and influence to help deliver that change. We cannot sit on the sidelines
– Professor Ian Walmsley, provost of Imperial

The provider’s socially responsible investment engagement working group was established in September 2020 to make recommendations for the fossil fuel component of the Imperial SRI policy, launched in March 2020.

The group said if the university is to maintain its fossil fuel company investments, it should ensure the companies it invests in are aligned with the Paris agreement and will become net-zero by 2050. The group said Imperial needs a “criteria for accepting research funding” from fossil fuel companies: businesses funding Imperial research must commit to decarbonising, and research should be compatible with achieving net-zero emissions by 2050.

The working group recommends Imperial use “the leverage of [its] research, education and thought leadership in the energy transition space, and the associated sanctions and our position as a potential investor, to influence and assist [fossil fuel companies] to adopt a credible, transparent, strategic approach to achieving net-zero by 2050”.

Imperial must also ensure “the credibility” of its own 2040 net-zero goal “to establish our credentials for requiring FFCs [fossil fuel companies] to act in a similar fashion”.

Professor Geoffrey Maitland, who chaired the group, said: “COP26 has shown how important it is to collaborate across research, policy and industry to achieve net-zero. Imperial has a unique opportunity to use the collective power of our investments, research, teaching, leadership and convening power to ensure that fossil fuel companies are active participants in the energy transition.

“At the same time, we still have work to do to make sure our own house is in order. This report sets out a robust framework for both.”

Professor Ian Walmsley, provost of Imperial, said: “To address the climate emergency, we need to see a radical shift in industrial systems, technologies, and business models in the energy sector. At Imperial, we have the knowledge, expertise and influence to help deliver that change. We cannot sit on the sidelines.

“These bold new measures provide a credible, forward-thinking and joined-up framework for us to make a meaningful difference in this sphere. We will hold ourselves to account as much as the companies we work with.”

Read more: Online library details UK universities’ responsible investment policies

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