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4. Ethical Investment & banking

A strong ethical investment policy guides a university's investment and banking practices to be conducted transparently and in an economically-viable, socially-responsible manner, not blind to wider social, environmental and humanitarian concerns. Universities pride themselves on their work combating climate change, whether through their research, teaching and learning or carbon reductions. This ethos can be reflected in an institutions investments. However, investments in the fossil fuel industry or arms trade can be contradictory to a university's broader sustainability aims and goals.

Local authorities, New York City and entire countries (Ireland) have taken action to ensure their investment portfolios are not funding fossil fuels.

Nearly 50% of UK universities have taken a stance that it is no longer socially or environmentally just to hold investments with fossil fuel extraction industries. UK universities have become part of a global movement to divest or never invest in fossil fuels, a culture shift that acknowledges both the importance of cutting finance to fossil fuel projects and revoking the social license that gives the fossil fuel industry a space to dominate energy production and climate policy. A public statement, announcement or quote made by a university is a significant part of supporting a culture of sustainable development.

Ethical investment policies are not only necessary to direct decision-making around the investment of ‘extraneous funds’, they inform decisions about all areas of investment conducted by an institution, including but not limited to pension fund investments, equities investment and an institution’s choice of banking provider.

To date, 68 UK universities have now taken action to reduce or remove their investments in fossil fuels, with many looking to shift their investments into more sustainable industries. Investments in the fossil fuel industry are financially unsustainable. Experts including the The World Bank, MPs and our own research institutions have warned against the ‘Carbon Bubble’, which could see billions of pounds lost if investments are kept in coal, oil and gas. This is why the People & Planet University League focus is not only on the transparency of universities investments, but the areas or sectors within which these are held.

Universities will be assessed on all ethical investment criteria even if they do not currently hold endowments. More than 10 of the universities that have made commitments to never invest in fossil fuels are universities that do not yet hold an endowment or investment funds. People & Planet understand that it is possible for universities not holding endowments to pass and review policy on investment issues before an endowment fund becomes available to the university. It is much easier for those universities to pass and review policy now - pre investment - rather than wait to the point at which funds have become available, have been invested, and then require a divestment process.


Ethical Investment Policy

1a. Does the institution have a robust and publicly available ethical investment policy reported on at senior level?

Score 10%


  • People & Planet will look for the policy on the university website

  • The policy should apply to the full scope of institution’s investments and has equal standing to, or be integrated within any other investment policy

  • Policy is clearly signed off at a senior level of the university and within the last 5 years.

1b. Specifics within the policy:

Additional scores will be added for each of the following areas included in the policy

Score – maximum 15%

  • The university commits to including student representation on its investment committee(s) and for there to be clear ongoing opportunities for the wider student body and staff community to engage with the policy 10%

  • A commitment to publicly list all investments annually (at minimum, listing what percentage of the fund is invested in different sectors), evidence required: financial report and/or third party annual report for most recent financial year). 5%


Commitment to screen out specific sectors:

Maximum 50%

  • Fossil fuel companies - partial commitment (i.e. coal and tar-sands) 5%
  • or Fossil fuel companies - full commitment to screen out all fossil fuel companies without a public announcement 20%
  • or Fossil fuel companies - full commitment to screen out all fossil fuel companies with a public announcement 35%
  • Corporations complicit in the violation of international law 5%


  • Arms companies partial commitment (i.e. controversial weapons or sales to regimes) 5%
  • or Arms companies: full commitment to screen out all arm companies 10%


Reinvesting divested funds:

Maximum 10%

  • Commitment to reinvest in low-carbon / renewable energy companies or funds 5%
  • Or Commitment to directly reinvest in community owned renewable energy and/or renewable energy projects on campus 10%


  • If the university employs a third party fund manager it is still required to have its own ethical investment policy statement.

  • Where the university has made a public statement committing to divest from a sector within a given time period (e.g. by 2018), if that time period has elapsed and the divestment is still not complete, points will not be awarded.

  • The policy must include specific exclusions around fossil fuel investments to be able to score in the reinvestment categories above.

2.Has the institution evaluated implementation and progress towards its ethical investment policy objectives in the last year?

Score 5%


  • Reporting on progress against the objectives of the policy has occurred at a senior level (ie. university council, investment committee)

  • This includes a process to track changes / progress against each objective within the policy

  • Evidence that report and review processes have taken place since 1 April 2017

  • If the policy is new, People & Planet will find evidence confirming the intended reporting structure and name, position and contact details of the responsible staff member

  • Relevant documents


Ethical Banking

3a. Does the institution have a robust and publicly available ethical banking policy reported on at senior level?

Score 5%


  • People & Planet will look for the policy on the university website

  • and that the policy applies to the full scope of institution’s banking activities, including banks where cash is held, loan providers and non-financial dealings (e.g. receiving advertising, careers fairs)

  • and that the policy is clearly signed off at a senior level of the university and within the last 5 years


3b. Does the policy exclude banks financing fossil fuels?

Score 5%

  • The University commits to have dealings (financial and otherwise) only with banks that explicitly exclude finance for fossil fuel companies and projects.