• Sat. Jun 15th, 2024

University buys holdings in fossil-fuel investor

ByCallum Devereux

Mar 23, 2021
Image shows a fossil fuel plant.A coal fired power plant on the Ohio River just West of Cincinnati

The University of Edinburgh’s pledge last month to no longer directly invest in fossil fuels was welcomed by many in the student community. 

However, there are concerns surrounding the continued indirect investment portfolio, which represents 55 per cent of the university’s total investment holdings. 

Less than a month before the university made its divestment pledge, the latest investment report was published, revealing that the university’s indirect holdings portfolio totalled nearly £313 million. 

Of this, £39.1 million is invested with BlackRock, a New York investment and asset management company which in 2018 owned over $11 billion (£7.9 billion) of shares in 56 coal plant developers. 

A report by the UK-based non-governmental organisation Influence Map found that BlackRock’s investment reserves in 2017 constituted 30 per cent of all energy related emissions. 

In 2016, the University of Edinburgh committed to becoming Carbon Neutral by 2040.

It is not the first time the university has come under fire for its investment portfolio, with The Student reporting earlier in the year that the university had invested over £1.4 million in Chegg, an essay writing service which the university itself actively discourages its students from using. 

The university’s investment portfolio also undermines the university’s own climate strategy. 

In the report’s own words, the climate strategy requires a  “Whole Institution Approach”, including “Leveraging investments” and “Risk Management”.

 However last year, only 14 per cent of BlackRock shareholders supported a resolution requesting the disclosure of climate risk in its investments, down from 25 per cent in 2019. 

This has led to criticism from environmentalists and climate activists that BlackRock is both funding global warming and declining to mitigate against its impact. 

In a statement to The Student, a spokesman for the University of Edinburgh said: 

“The University is committed to making a positive impact for society and to meeting our goal to be a net-zero University by 2040 – ten years earlier than recommended by the Intergovernmental Panel on Climate Change (IPCC).

“By investing £40m in Blackrock’s Global Impact Fund, the University is providing direct support to the companies of the future. 

“These will deliver the transition to a zero-carbon world and address our great social and environmental problems, such as water scarcity and overuse of resources.”

Last year, four days after climate activists stormed BlackRock’s Paris offices, CEO Larry Fink announced that they would sell $500 million (£361 million) of coal-related assets and create a new ‘fossil-free’ fund. 

BlackRock’s Global Impact Fund then launched last March, pledging to invest in securities that they believe “have the potential to produce attractive long-term returns across “Impact Themes” which are mapped to the UN Sustainable Development Goals”. 

Months after this announcement, BlackRock’s Global Head of Sustainable Investing, Brian Deese, said that BlackRock’s role is to provide clients with “more choices and more investment options” rather than “excluding entire industries or entire classes of companies.” 

Last month, the University also announced that its climate strategy goals to “return carbon emissions to 2007-08 baseline year levels and reduce emissions of carbon per £ million turnover by 50 per cent from baseline year levels” had been achieved four years ahead of schedule. 

Image: Environmental Defence Fund

By Callum Devereux

Editor-in-Chief: May-September 2022; Deputy EiC: April 2022, August-December 2023; Opinion Editor: October 2021-May 2022. Contributor since September 2020.