UK’s Cambridge endowment could issue green bonds to retrofit buildings

The €3.3bn Cambridge University Endowment in the UK will consider issuing hundreds of millions pounds in green bonds to environmentally retrofit its buildings and creating investor coalitions to engage with companies on issues such as climate change, as part of a wide-ranging review on how the university undertakes responsible investment.

The review has been sparked by student group Positive Investment Cambridge (PIC) and will see a working group, including student, academics and administrators make recommendations on responsible investment to Cambridge’s council in May.

Cambridge council must carefully consider the recommendations that could lead to major changes in the way its endowment is managed.

In a preliminary report, the working group recommends a number of ways that the Cambridge University Endowment could approach responsible investment. This includes issuing green bonds to retrofit its 300 buildings, using its clout to pull together large coalition of investors to engage on climate change, investing in green-focused pooled and venture capital funds and divestment.

The working group’s initiative has backing from 300 Cambridge and also Oxford academics, including the Astronomer Royal, Lord Rees and the former Archbishop of Canterbury, Rowan Williams.

In a letter, the academics praised the University of Cambridge for undertaken the investigation into its responsible investment strategies, and expressed support for the evidence-based adoption of positive investment strategies for institutional investors.In a meeting to launch the letter, Cambridge alumnus Lord Deben, chairman of the UK’s independent Committee on Climate Change and a former Cabinet minister under Margaret Thatcher, said investors had to accept their investments demanded responsibility: “We have for far too long invested and done nothing about it. We put some money into something and forgot about it. The idea of active investors is curiously not done.

“It’s a very serious issue and a fundamental systemic threat to capitalism.”

Lord Deben continued that companies couldn’t go on not paying tax and paying large salaries, saying investors had the power to stop these situations.

Commenting on the review of Cambridge’s approach to responsible investment, Lord Deben said it included an impressive range of options. “There is significant concern over climate change and other great ethical issues of our time, and positive investment appears to be viewed as at least part of the potential solution to the growing crises of the modern age.”

Responsible Investor understands that Oxford University, which manages a £2bn endowment, may start a similar initiative. It is also expected that Cambridge’s review will influence its constituent colleges, which hold more than €3.9bn in their separate endowment funds.

Positive Investment Cambridge evolved from Fossil Free Cambridge four years ago, when student activists started to question the efficacy of fossil fuel divestment and adopt what it calls a more ‘nuanced approach’.