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February 3, 2016

Oxbridge Demands Review of Policies, Not A Blanket Drop of Fossil Fuels

In the lead up to Cambridge University’s divestment ruling expected in May, and with a £5 billion endowment at stake, it comes as no surprise that the pro-divestment camp is attempting to claim a premature win with one of the UK’s most prominent institutions. This week, the self-proclaimed “broad based coalition,” Positive Investment Cambridge (PIC), announced the release of a joint statement between Cambridge and Oxford universities signed by 300 academics urging their institutions to take up “morally sound, evidence-based investment policies.”

But despite the fact that PIC’s announcement mentions fossil fuels only once in nearly 500 words, The Independent declared that these academics now “demand [an] end to fossil fuel investment.” The details of the information available, we’ve found, indicate otherwise.

1.Neither statement mentions fossil fuels.

Nowhere in either the Oxford or Cambridge open letters referenced in PIC’s press release single out any exclusion of fossil fuels, or even energy, to achieve “morally sound, evidence-based investment policies.” Add to it the fact that fossil fuels are only referenced in the release as one in a number of options, and The Independent’s claim that the group’s primary demand is to divest is a stretch at best. The Cambridge statement in particular simply applauds a decision made almost a year ago to form a working group to review the university’s investment portfolio, but says nothing about dropping fossil fuel assets as a means to match the institution’s ideals.

Funnily enough it was the Guardian which held back on its assumptions, and more accurately reported that the 300 academics are seeking “evidence-based investment policies which “could include divestment from fossil fuels.”

2. The majority of signees have little expertise in what may or may not address global warming.

We’ve established that, were it not for The Independent’s misleading headline, there is no explicit language that would suggest that all 300 signees are in support of the divestment of fossil fuels. So if the statements are instead geared toward establishing support for investments based in morals, then humanities-focused professors are a fine group to corral.

However, it is Lord Deben who, in the PIC release, makes the only tie between the signees support for “morally sound” investment policies and climate change, saying that positive investment is a “crucial element of any plan to keep global warming to safe levels.”

If climate change is the main issue underpinning this letter scheme, then the working committee at Cambridge looking into divestment should consider whether professors of moral philosophy, theology or philosophy, to name a few on the list (or at least Oxford’s list – the letter from Cambridge didn’t oblige us with the signee titles), are the most qualified advisors. In fact a majority of the signees of the Oxford letter have a background in the humanities, but should they be the individuals to comment on whether an investment policy will help to “keep global warming to safe levels”? We should hope not.

3. The sponsoring group doesn’t advocate for divestment as a silver bullet.

PIC’s press release kindly shares an “education document” that outlines the group’s purpose and a number of ways to serve as a responsible investor. In the 12 page document, “divestment from certain industries and/or (re)-investment into renewable energy” is the only semi-reference to fossil fuel divestment, and is mentioned again as one of many options to, as they say, invest positively.

Contrast that singular reference to two whole pages which are dedicated to tactics that involve using shareholdings as a way to influence policies and practices – including on issues involving climate change risk. In other words, PIC greatly advocates in favour of maintaining stock to leverage power as a shareholder. Professor Timothy Devinney, University Leadership Chair at the University of Leeds – an institution familiar with debate over the divestment of its endowment – argues that:

“Divestment does little more on this dimension other than to turn an inside voice that can demand that a company listen into an outside voice that a company can easily ignore.”

4. Questionable motives from a key signer.

The same person who is responsible for linking the Oxbridge statements on “moral” investment with their role in battling climate change could also directly benefit from more investors looking to assess their sustainable investment options. Along with serving as Chairman of the UK’s independent committee on Climate Change, Lord Deben is also the Chairman of Sancroft, an international sustainability consultancy. This is no secret – it’s disclosed in his Parliamentary profile – but not only has he clearly sided with an activist movement by partnering with PIC, but his combining moral arguments with finding scientific solutions to climate change leaves the audience with nothing but a biased perspective on how an institution should invest its funds.

Bottom line

It helps to get the facts straight; Cambridge University, and the signees of the PIC-sponsored statements, are clearly interested in reviewing all investment options and not only those related to energy. But these statements have raised an important argument: is investment in fossil fuels – the current source of energy that powers our way of life – a moral issue? Looking back to our last post on boycotts, moral and activist-led campaigns rarely lead to actual solutions to the problems they wish to address. The holder of a £5 billion endowment fund is much more impactful as a shareholder than as yet another voice on the sideline, and oil and gas companies could benefit from having climate experts at Oxbridge take a seat at the table.