Energy related investments and fossil fuels
The University’s charitable endowment supports one of the its founding objectives, to sustain academic freedom. The large majority of scholarships and many research posts are funded in full or partially from the endowment. A diversified pool of assets gives the endowment the best chance of achieving an investment return to provide an income for both beneficiaries today, and for future generations.
University Council’s review of energy related investments
In 2015, the University of Oxford’s Council, assisted by the SRIRC, carried out an extensive review of energy related investments. This involved a wide consultation across the University, and Council’s findings are here: Council’s statement
Coal and oil sands – specific investment restrictions
Part of this review requested that OUem avoid direct investments in coal and oil sands, and this restriction is incorporated into our investment process.
Lower energy investments compared to other investors
The Oxford Endowment Fund has low exposure to the wider energy sector, particularly when compared to energy’s natural weighting in equity markets. At 31 December 2018, there was just 0.9% exposure to energy exploration and extraction (or ‘fossil fuels’), across the whole portfolio. Additionally, there was 1.2% exposure to energy equipment and services, and 0.1% in storage and transportation. By way of example, had the Fund been passively invested over the same period in the FTSE 100 Index or MSCI World Index, the energy exposure would have been 17.2% or 6.5% respectively.
Backing energy efficiency groups
We have also backed an investment group which is actively focused on analysing the resource efficiency of companies and their use of energy, water and waste; under the thesis that the most efficient companies should outperform their peers over the long term. OUem backed the team in 2012, becoming a shareholder and providing a catalyst for future institutional investment. This followed significant research into the issue of carbon emissions, the inevitable reduction on the dependence of fossil fuels, and how this could be implemented to generate returns for the Fund.
Institutional Investors Group on Climate Change (IIGCC)
OUem is a member of the IIGCC, a group of institutional investors focused on climate change.