The London School of Economics – berth of leading climate economist Lord Stern – has today (January 30) confirmed that its investment committee will commission “further expert study into managing fossil fuel portfolio risks in response to students’ concerns”.
It follows months of protest from the LSEDivest campaign which attracted support from figures such as environmental campaigner Bill McKibben, and comes just weeks ahead of fossil fuel divestment day.
Andrew Farrell, the university’s Chief Financial Officer, tweeted the news today and a spokeswoman confirmed the plans to Responsible Investor.
Gabriel Davalos, a member of the LSE Divest campaign, said it was a great step forward. But he added a caveat: “It’s just a step forward. There is still a lot of work to do to make sure the review is timely. Sometimes with campaigns, these procedures are used to delay actions, students graduate and the momentum is lost. We are excited that LSE has taken the issue seriously and we will positively encourage them to speed up the process.”
As of July 2011, the most recent figures available, LSE’s endowment totalled £62m. Although dwarfed by endowments such as the giant Harvard and Yale pots in the US, the LSE’s status will make the decision stand out.The investment strategy of the LSE’s investments committee is implemented by the LSE Finance Division using index tracking funds managed by BlackRock. The LSE uses Stanhope Jewson, an independent firm of investment consultants, for investment advice.
The LSE announcement comes as the Asset Owners Disclosure Project (AODP) this month ranked the LSE at the bottom of its list of universities on challenging climate risk. John Hewson, chair of the AODP, said at the time: “Oxford University, Cambridge University, the London School of Economics, University College London – their academics are leading the discussion on climate change, risk and stranded assets, yet none of the universities have a plan to safeguard their finances.”
The LSE’s Professor Lord Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment, is a leading figure in climate research. His Stern Review on the Economics of Climate Change in 2006 for the UK government called climate change the greatest market failure ever seen.
Most student-led groups calling for fossil fuel divestment around the world are allied with 350.org, a global environmental lobby group. It is behind this year’s Fossil Fuel Divestment Day on February 13 and 14.