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Fossil fuel campaign gets foot in the door

Simon Popay, MSc Development Studies 

The campaign to end SOAS’ investment in fossil fuel companies took a big step forward last week as campaigners met with the School’s finance team. The finance team agreed to discuss the possibility of divestment with the School’s Investment Advisory Panel at its quarterly meeting next week. The campaigners hope that a decision on divestment could be made as early as June this year.

It is not known exactly how much the School holds in fossil fuel companies. At present, the School’s only invested assets are those related to its endowments, with its non-endowment investments sold off in 2013 to fund the redevelopment of Senate House.

The bulk of the £21m in endowment assets are invested directly in equities. The most recent disclosure reveals that this includes holdings in BHP Billiton, Suncor Energy (a Canadian firm extracting fuel from oil sands), BP, and Royal Dutch Shell among other firms. A full list of companies that SOAS holds equity in can be found on the School’s online FOI disclosure log.

The campaign originated with Bill McKibben’s, a well-known environmental organisation, and is part of a global movement to pressure universities, cities and other public institutions to divest from fossil fuels. Despite related divestment campaigns at over 35 other UK universities, no university in the UK has yet agreed to divest. However, nine universities in the USA have done so.

Dr Matthew Haigh, SOAS Senior Lecturer in accounting with expertise in ethical investments, commented that to have any impact, the campaigners would need to understand the School’s investment style and the specific mandate given to its asset managers. He warned that campaigners would need to speak the language of financiers: “Guerrilla warfare in suits is the only way to do it.”

SOAS’ investments are currently managed by Newton Asset Management, a UK based subsidiary of the US multinational BNY Mellon. Current investment policy includes avoiding companies substantively associated with human rights and labour standard breaches, military products, tobacco and gambling. The fossil fuel campaigners argue that by investing in Royal Dutch Shell and BP, the School is already in breach of these policies. Nonetheless, they are hoping to see fossil fuels added to the list of industries to avoid. Such divestment could entail an increase in the level of risk that the school faces, and it is likely that Newton Asset Management will need to assess the impact this could have on the School’s endowments.

Dr Haigh further suggested that the campaigners should consider the origins of the School’s endowment assets as well as where they are currently invested. For example, the School’s second largest endowment fund, the King Fahd Chair, originates from the Saudi government, whose revenues are almost entirely (92.5%) derived from the petroleum sector.

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