01.11.24
Wednesday 21 February 2024
St Catharine’s is pleased to be among the 60 leading institutions and trusts in UK higher education collaborating on a new effort to create a market for cash products that do not contribute to the financing of fossil fuel expansion, alongside the Universities of Cambridge, Edinburgh, Leeds, Oxford, Southampton, St Andrews and Westminster.
The institutions have collectively issued a Request for Proposals (RfP) to financial institutions for cash products such as deposits and money market funds. The institutions are especially keen to avoid their financial arrangements supporting companies that are constructing new coal- or gas-fired power plants in member countries of the Organisation for Economic Co-operation and Development (OECD). New fossil fuel infrastructure can lock in decades of fossil fuel demand and subsequent greenhouse gas (GHG) emissions that are the main cause of climate change.
Responsible investment is a mainstream part of equities investing, but it is still not widespread in the debt markets even though a large majority of the new capital for companies constructing new fossil fuel power stations or exploring for new reserves comes from debt. For this reason, the institutions behind the RfP have focused on banks and the bond market as the primary sources of external financing for fossil fuel expansion. Fossil fuels are responsible for around 80% of GHG emissions globally.
Nicola Robert (2019), Fellow and Bursar at St Catharine’s, commented:
“Since 2020, St Catharine’s ethical investment policy has sent a clear signal that we expect our banking arrangements to align with our social and environmental policies, and that we are prepared to switch banks if our provider’s activities run counter to these values – but there has been a lack of viable products for us to consider a switch. Our Investments Committee wholeheartedly supported us joining other institutions to issue this new RfP, and I am optimistic that we can spearhead meaningful change through our collective call for products that avoid financing fossil fuel expansion.”
The RfP criteria are based on the International Energy Agency’s (IEA) Net Zero Emissions by 2050 Scenario and are in line with emissions reductions laid out in the Intergovernmental Panel on Climate Change (IPCC)’s Sixth Assessment Report. The RfP is also an effort by institutions to direct funding towards the much-needed construction of renewables to accelerate the rapid energy transition away from fossil fuels, and particularly in areas where finance is a key constraint for growth, such as in low-income countries.
Dr Noriko Amano-Patiño (2021), Environment Fellow at St Catharine’s, commented:
“While St Catharine’s is obliged to use our financial resources to further our core objectives as an educational institution, we also recognise climate change as one of the biggest challenges that humanity has ever faced. We are committed to achieving net zero carbon emissions by 2040, and this RfP is an important step in aligning our financial arrangements with this ambition. I am excited to see how the banking sector will respond and hope other higher education institutions with similar goals will join us.”
Anthony Odgers, Chief Financial Officer at the University of Cambridge, said:
“What we and our partners are focused on with this mandate is finding financial services products that do not contribute to the expansion of fossil fuels – in particular, new coal- and gas-fired plants which lock in demand for decades.”
Heather Davis, Head of Group Treasury at the University of Cambridge, added:
“The University treasurers in this group all share a common goal, which is to manage money in a way that doesn’t contribute to the financing of fossil fuel expansion and to find something that aligns with the IEA Net Zero Emissions Scenario, and that is lacking in the cash space at present.”
The institutions currently participating in the RfP are:
Bath Spa University; Brasenose College, Oxford; Cambridge University Press & Assessment; Christ’s College, Cambridge; Churchill College, Cambridge; Clare College, Cambridge; Clare Hall College, Cambridge; Corpus Christi College, Cambridge; Corpus Christi College, Oxford; Darwin College, Cambridge; Downing College, Cambridge; Emmanuel College, Cambridge; Fitzwilliam College, Cambridge; Girton College, Cambridge; Gonville and Caius College, Cambridge; Hughes Hall, Cambridge; Jesus College, Cambridge; JISC; King’s College, Cambridge; London School of Economics; Lucy Cavendish College, Cambridge; Magdalene College, Cambridge; Manchester Metropolitan University, Merton College, Oxford; Newnham College, Cambridge; Oxford Brookes University; Pembroke College, Cambridge; Peterhouse, Cambridge; Queens’ College, Cambridge; Robinson College, Cambridge; Selwyn College, Cambridge; Sidney Sussex College, Cambridge; St Antony’s College, Oxford; St Catharine’s College, Cambridge; St Edmund Hall, Oxford; St Edmund’s College, Cambridge; St John’s College, Cambridge; The Gates Cambridge Trust; The Isaac Newton Trust, Cambridge; The Queen’s College, Oxford; Trinity College, Cambridge; University College London (UCL); University of Bristol; University of Cambridge; University of Dundee; University of Edinburgh; University of Exeter; University of Gloucestershire; University of Leeds; University of Manchester; University of Oxford; University of Reading; University of Southampton; University of St Andrews; University of Sussex; University of the Arts London; University of Westminster; University of York; Wolfson College, Cambridge; Worcester College, Oxford.
For further information please contact: Banking Engagement Forum (BEF@admin.cam.ac.uk)
Read the College’s latest investment policy and roadmap to net zero emissions.
