Regent House approves fossil fuel divestment Grace

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Cambridge could be a step closer to full divestment from fossil fuels after a motion was approved by Regent House.

The motion, or “Grace”, proposes that “none of the University’s Endowment Funds should be invested directly or indirectly in companies whose business is wholly or substantially concerned with the extraction of fossil fuels”.

It also calls on the University Council to “publish a Report to the University within 12 months setting out how this is to be achieved”.

Cambridge currently has an endowment – money from charitable donations augmented on the stock market then used to run the University – of around £5bn, £2.2bn of which belongs to the University itself with the rest belonging to individual colleges.

Although it does not invest in coal and tar sands, the University does not currently have an ethical policy for the investment of its funds unlike similar institutions including Oxford.

However, the Grace is only advisory, and whilst its passing might be seen as a substantial ethical statement, it is the Council that ultimately manages the University’s investments.

In response to the Grace, the Council wrote: “In adopting this course, the members of Council are mindful that the Grace cannot operate as a mandate in respect of the exercise of their fiduciary responsibility for the University’s investment practices.”

Chris Galpin, from Cambridge’s Zero Carbon Society, told Varsity: “We’re very pleased that the Grace submitted to Regent House has passed, and that the University of Cambridge is now one step closer to fossil fuel divestment. This is a great victory for our campaign, and we hope that it will send a message to the world that the University is serious about tackling climate change.”

But he warned against “celebrating” until it is clear that the University Council will adhere to the result.

Speaking to TCS, he said: "The University Council cannot simply reinterpret the rules as they see fit. The Statutes clearly state that Regent House is the governing body of the University, and we expect the Council to respect their decision.

"The University has already produced a report which accepted that it would be possible 'to divest progressively'. It also noted that: 'regulatory change and public policy significantly affect the expected economic returns from carbon related industries' and that 'future action by governments [...] is likely to affect the economic attraction of particular investments for the long term'. This is clear acknowledgement that fossil fuels are high risk investments, and that avoiding these risks would not conflict with the Council's fiduciary duty."

Galpin continued, "Council are sorely mistaken if they think they can bury this issue in reports and opaque working groups. Students and academics are united on this issue; the University must stop investing in climate change."

A University spokesperson told Varsity: “The University Council respects the views of the Regent House, while remaining conscious that responsibility for investment matters rests solely with the Council, and so this Grace is advisory rather than mandatory.

“The Council recognises the concerns around climate change. It also has to take its investment responsibilities very seriously as these fund key research and education about, among other things, the reasons for and solutions to climate change. As a result, it is commissioning a report to understand the consequences of any divestment from fossil fuel companies, including for its teaching and research programmes.

“Pending the outcome of the report, the University will continue to pursue a policy of ‘active engagement’ with fund managers to ensure that the interests and values of the University are reflected in how holdings are acquired, managed, and traded.”

A University spokesperson also provided this statement: “The University’s investments were reviewed last year, as a consequence of which the University rejected full divestment in favour of a policy of ‘active engagement’ with fund managers. 

"The resulting report made clear that the University had no directly held exposure to the most pollutive industries, such as thermal coal and tar sands, and no expectation of having any such exposure in the future. In relation to investments managed externally, there are only negligible holdings in these more polluting fossil fuel industries."

 

This article was amended on 27/01/17 at 17:05

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