Universities' fossil fuel shame

| 20th December 2021 |
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Universities across the UK hold around £15 billion in investments. Not a penny should go to fossil fuels.

Our public education institutions should have nothing to hide about where their money is – so why are they not more transparent?

Universities in the UK have power in where they invest their money. And students want to hold them accountable.

But the latest research from People & Planet’s University League 2021 shows there is still an urgent need for many to take public responsibility for the impact they have through their finances.

Collectively, UK universities hold around £15 billion in investments, and even more in treasury funds. And the fossil fuel divestment movement has changed the conversation over the last decade. 

Status quo

In October this year, the University of Aberdeen, an institution at the heart of Europe's oil and gas capital, announced a commitment to divest from the fossil fuel industry after almost a decade of student campaigning.

Despite this rise in awareness of investment practices within our institutions, a cloak of secrecy still surrounds university finances and the decisions guiding how and where this money is spent and saved.

The first issue is that students are shut out of decision making. According to People & Planet’s 2021 University League findings, only 29 percent of universities have a student representative on the committee that oversees their investments.

Even where students are invited into these rooms, they are not equipped to meaningfully participate in debates and decisions.

A lack of financial literacy leaves them feeling unable to challenge the status quo and create change and, as such, these universities are able to claim the inclusion of students without truly opening the process to them.

Governance

Added to this, in wider governance - not including the board of governors, on which there is already an expectation for there to be student representation – only 37 percent of universities have student representatives on more than one committee concerned with finance related issues such as estates, planning, finance and strategic decision.

Our public education institutions should have nothing to hide about where their money is – so why are they not more transparent?

By design, there is an inaccessibility built into the governance of university finances, allowing for decisions to be made about where universities spend and save without accountability from student stakeholders.

If universities are going to shape the future we want to see, they need to let the voices of that future into the room. That means basic financial training and a boardroom environment focussed on welcoming students’ voices, not shutting them out.

Having said that, this is not just a case of inviting students into university governance. There is also a lack of transparency around overall financial practice.

Only 18 percent of universities list their annual investments publicly, and even less publish the minutes of their investment committee meetings.

Justice

Simply put, this means that in four out of five UK universities you would be unable to find which companies, products and projects your institution is invested in and how they came to those decisions.

Our public education institutions should have nothing to hide about where their money is – so why are they not more transparent?

Many institutions, particularly in the run up and wake of COP26 this year, have made statements of climate action, commitments to sustainability and showcases of social responsibility.

According to the latest HESA data, universities in the UK sit on over £22 billion worth of assets, much of which will be held in banks.

We know that finance is a huge part of our journey to climate justice but, of the measly six universities that have an ethical banking policy dictating who they should bank with, none of them excluded banks who fund fossil fuels.

Investments

This contrasts with just under half of universities who have an ethical investment policy with some commitment in it to exclude fossil fuels.

Barclays - one the largest banks in the UK, counting many leading universities as clients – funnelled over £21 billion into fossil fuels in 2020 – making it the largest funder in Europe.

What is the point of our universities taking investments out of fossil fuels, or making claims of climate leadership, if they still bank with those upholding and expanding the fossil fuel industry?

Students need to be able to hold their institutions to account, to ensure they are leading the way towards the more sustainable economy and fairer society we need.

Funding

This is happening in small pockets through student organising on campus, with support from organisations like SOS-UK, People & Planet, Demilitarise Education and many others.

In the last year we’ve seen steps towards better transparency and engagement from institutions, for example at the University of Bristol, where students have formed a working group to make recommendations to the investment committee on changes to their investment policy. But there is still a long way to go.

Universities should not be directly funding, or upholding those who directly fund, the climate crisis and social injustice – and students should be able to see it, and challenge it, if they are.

This Author

Mel Kee is a campaign manager at Students Organising for Sustainability UK (SOS-UK). Mel manages the Invest for Change campaign, supporting students to campaign for ethical investments at their universities.

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