Why is Divestment Important?

Investments are a political statement. While the University is still invested in fossil fuel companies it is endorsing their destructive behaviour and failing to act to protect the future of our planet.

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THE SCIENCE

Anthropogenic global warming is indisputable, and if unmitigated it will result in global catastrophe. Oxford scholars are at the forefront of research on the impacts of climate change, and were lead authors of the latest Intergovernmental Panel on Climate Change (IPCC) report – the global authority on climate science. The report made clear that 80% of known fossil fuel reserves must remain unburned to stay below the critical threshold of two degrees of global warming.

Fossil fuel companies continue to disregard this scientific consensus. They are committed to burning 100% of their reserves, are actively exploring for more in ever more extreme environments (with dire consequences for local ecology and communities), and are lobbying extensively to block meaningful action on climate change.

POLITICAL IMPACTS

For the University to invest in the fossil fuel industry is inconsistent with its own policy to “ensure that its investment decisions (including those taken on its behalf) take into account social, environmental and political issues in order to maintain its ethical standards”, and undermines the future that an institution of education and research exists for. Moreover, it renders the University complicit in the irresponsible and unethical practices of fossil fuel companies.

The University divested from South Africa in 1985 and arms manufactures associated with cluster munitions in 2012 to take a moral stand. In the case of climate change, the need for moral leadership cannot be overstated. Supporters of fossil fuel divestment include high profile figures such as former Irish President Mary Robinson, political theorist Noam Chomsky and South African campaigner Desmond Tutu, who has called for an ‘apartheid-style boycott to save the planet.’ Around 200 institutions across the world with a combined asset size of $50 billion have committed to divestment, including Oxford City Council and the University of Glasgow. The University of Oxford can add its voice to theirs, sending a powerful message about the need for immediate action.

In the run-up to the COP 2015 talks, this is more important than ever – for the University, to vote against divestment is to vote against action on climate change.

FINANCIAL RISK

The ethical argument aside, leading actors in the financial sector acknowledge that fossil fuel investments are increasingly risky, given that known reserves will become ‘unburnable’ in a carbon constrained world. This work is being championed by Oxford Smith School’s own ‘Stranded Assets’ programme. We may already be seeing the influence of the IPCC research on the oil market: a report recently produced by Deutsche Bank suggested that last year’s drop in oil prices was driven by growing consciousness of a carbon budget and political momentum – that “peak carbon rather than peak oil [will become] the primary driver of oil prices.”

By divesting from fossil fuels, the University can adopt the best investment practice both ethically and financially, and add its weight to the political momentum that is already undermining the industry. It can act for the future of its scholars and alumni. At this crucial stage for the global climate movement, Oxford University can come down on the right side of history. As Oxford alumni and donors, we urge our alma mater to take action on climate change and divest from fossil fuels.