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Universities collectively managing more than £5bn formally call on banking providers to deliver new environmentally friendly deposit accounts and money market funds
A coalition of 21 UK universities collectively managing more than £5bn in cash and investments has today warned banks and asset managers they are ready to move funds to greener institutions unless they accelerate their net zero investments and halt financing of new fossil fuel projects.
According to reports, the University of Cambridge-led group - which also features University College London, the London School of Economics, and the universities of Oxford and Edinburgh - have formally requested that the financial institutions they work with create new environmentally friendly types of deposit accounts and money market funds.
The universities ultimately hope that new financial products can help ensure their money does not help finance new oil, gas or coal projects in any way, enabling billions of pounds to be switched to greener products.
The coalition is also calling for banks and asset managers to adopt tougher standards on climate issues, including commitments to end new financing of fossil fuel supply beyond that already committed in 2021 in keeping with the International Energy Agency's 'Net Zero by 2050' scenario.
In addition, the group has called on banks and asset managers to clarify the proportion of their financing that goes towards fossil fuels and provide details of how executive pay is linked to hitting climate-related targets, lobbying, and stewardship policies by the end of the month.
According to analysis by Reclaim Finance just one of the world's top 100 banks - France's La Banque Postale - would currently meet the terms of the coalition's proposal, while no top 100 asset manager would.
Anthony Odgers, chief financial officer of the University of Cambridge, told the FT that few, if any, major lenders are currently in line with the group's proposals.
"Building new infrastructure, such as coal and gas-fired plants and pipelines, locks in demand for fossil fuel for decades," he said. "We care about people using our money [to do this]. We want to have a real-world impact."
David Hayman, campaign director at sustainable finance group Make My Money Matter, said the announcement from more than 20 leading universities should be heard in the boardrooms of banks around the world.
"From Cambridge to Oxford, Manchester to Edinburgh - universities and colleges across the UK are saying no to those banks financing climate chaos," he said. "We hope this historic bid for greener banking acts as a clarion call for all universities to choose a bank that doesn't finance new oil and gas. In doing so, they can ensure the billions sat in their accounts helps protect their students' futures, not jeopardise them."
The announcement comes amid a fresh wave of student and staff pressure on universities to cut ties with companies blamed for accelerating climate change.
For example, the University of Oxford was this week accused of almost doubling its fossil fuel investments between 2021 and 2022, despite making commitments to divest from fossil fuel assets just a year earlier. According to figures from its annual reports, the university's second £6bn endowment fund increased its share of investment in fossil fuels from 0.32 per cent to 0.52 per cent in 2022.
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