Campaigners warn oil and gas investments pose huge financial and reputational risks © iStock/Getty Images
Cambridge university’s £6.3bn endowment fund, the largest in the world outside the US, is facing renewed pressure to abandon its investments in fossil fuels after 60 academics and leading campaigners warned they posed huge financial and reputational risks.
Academics including Rowan Williams, the former archbishop of Canterbury, as well as campaigners such as Noam Chomsky, a professor at the Massachusetts Institute of Technology, have stepped up efforts to push for action on carbon-intensive investments that are “incompatible with the Paris climate agreement”.
Lord Williams said the university had to “think hard” about taking a “leading role in effecting the change we need in our attitude to fossil fuels”.
Cambridge has repeatedly clashed with academics and students over divestment, partially because of concerns that research funding could be hit as several oil companies — including BP, ExxonMobil and Shell — have donated money to the university. In 2000, BP donated £22m to the university to establish a research centre examining how fluids behave in different environments.
As part of a submission to a working group set up by the university’s executive arm to examine divestment, the coalition of campaign organisations and academics warned the endowment fund would not maximise financial returns by investing in oil and gas companies.
“Continuing to invest in fossil fuel companies is not only a financial risk to the University of Cambridge, but reputational too,” they said.
The group, which was brought together by People & Planet, a lobby group, and the National Union of Students, claimed the fossil fuel industry had played a role in “systematically misleading the public on climate change” and had been “complicit in human rights abuses”.
People & Planet estimate that Cambridge has invested more than £370m in fossil fuels.
Universities globally have come under increased pressure to pull out of fossil fuels since the Paris agreement, which aims to limit global warning. The fear is that measures to stop climate change will hit carbon-intensive industries, leaving investors with losses.
Almost 800 institutions with $5.5tn in assets have committed to full or partial divestment from fossil fuels, according to Fossil Free, a campaign group. This includes the universities of Oregon State and Maryland in the US and Sheffield and St Andrews in the UK.
The university said it had sought views on reducing its carbon footprint and would hear oral evidence during the term before making any decisions.
In January, Cambridge said it had to consider the consequences that divestment could have for its teaching and research programmes.
According to a freedom of information request submitted in 2015, Cambridge received £15.8m in funding from six carbon-intensive companies between 2009 and 2014.
An academic at a rival university, who was involved in its own decisions on fossil fuels, said universities would always question how reliant they were on funding from companies before making any decisions to divest.
But he added that most universities were “independently minded” and would risk losing funding if they believed it was merited.
If Cambridge sold out of carbon-intensive industries, it would become the largest university endowment in the world to fully divest from fossil fuels.