Stay informed with free updates
Just sign up to ESG investing myFT Digest: delivered straight to your inbox.
Oxford University has come under heavy criticism after its £6bn endowment fund increased its investments in fossil fuels just a few years after making a historic disinvestment pledge.
While its investments are small, the fund’s indirect exposure to fossil fuels increased from 0.32% to 0.52% between 2021 and 2022, according to published reports. Around £1 in 200 of the fund is now invested in fossil fuels.
The university said in 2020 it would abandon all direct investments in fossil fuels after strong pressure from students and academics. But this does not apply to indirect exposure held through investments with external asset managers.
Zak Coleman, campaign manager for Invest for Change, an organized student campaign for sustainability in the UK, accused the university of using “loopholes” to continue investing in fossil fuels. The use of fossil fuels is by far the largest contributor to climate change.
“It is extremely worrying to see the university exploit these gaps in its already weak policy to continue to invest around £31.2 million in the fossil fuel industry, which is working so hard to derail climate action.”
The Oxford Climate Justice Campaign, which has led the push for disinvestment in the university, said: “This news is a shocking example of institutional greenwashing and a slap in the face for the students, staff, academics and alumni who have worked tirelessly for fossil fuel divestment. .”
The increased exposure to fossil fuels was the result of market movements, with rising oil and gas stock prices in the wake of the energy crisis, as well as new investments by asset managers with holdings in energy-intensive stocks of carbon.
Antonia Coad, head of sustainability and corporate affairs at the University of Oxford Endowment Management, which oversees the endowment fund, said the fund had “fully implemented” the university’s disinvestment commitments.
He added that the fund’s indirect exposure “will fluctuate for a variety of reasons on an annual basis,” including market movements seen in 2021 and 2022.
The endowment fund, which oversees money for the university, its colleges and others, typically uses money managers to invest, meaning it makes few direct investments. The OUem also manages a medium-term capital account for the university. Including the capital account, OUem said the university’s exposure to fossil fuels now stands at 0.45%.
Education funding has come under intense pressure to move away from fossil fuels in recent years, with almost three-quarters of UK universities committing to full divestment.
This week, one of Europe’s largest pension funds sold oil and gas majors, including Shell and BP, over concerns that the companies were making little progress in transitioning to greener businesses.