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Oxford university has come under heavy criticism after its £6bn endowment fund increased its investment in fossil fuels just a few years after making a landmark commitment to divestment.
Although its investments are small, the fund’s indirect exposure to fossil fuels increased from 0.32 per cent to 0.52 per cent between 2021 and 2022, according to published reports. About £1 out of every £200 of the fund is now invested in fossil fuels.
The university said in 2020 that it would dump all direct investments in fossil fuels after sustained 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, a Students Organising for Sustainability UK campaign, accused the university of using “loopholes” to continue to invest in fossil fuels. The burning of fossil fuels is by far the biggest contributor to climate change.
“It’s extremely concerning to see the university exploiting these loopholes in its already-weak policy to continue investing around £31.2mn in the fossil fuel industry, which is working so hard to derail climate action.”
The Oxford Climate Justice Campaign, which led the push for divestment at 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 worked tirelessly for fossil fuel divestment.”
The increased exposure to fossil fuels was the result of market movements as oil and gas share prices rose on the back of the energy crisis, as well as new investments with asset managers with holdings in carbon-intensive stocks.
Antonia Coad, head of sustainability and corporate affairs at Oxford University Endowment Management, which oversees the endowment fund, said the fund has “fully implemented” the university’s divestment commitments.
She added that the fund’s indirect exposure “will fluctuate for a variety of reasons on a year-by-year basis”, including market movements as seen in 2021 and 2022.
The endowment fund, which oversees money for the university, its colleges and others, typically uses fund managers to invest, meaning it makes few direct investments. OUem also runs a medium-term capital account for the university. Including the capital account, OUem said the university’s exposure to fossil fuels was now 0.45 per cent.
Education endowment funds have come under intense pressure to ditch fossil fuels in recent years, with almost three-quarters of UK universities committing to a full divestment.
This week, one of Europe’s biggest pension funds sold out of oil and gas majors, including Shell and BP, over concerns the companies were making little progress to transition to greener businesses.
