Leading UK Universities Continue to Bank With Key Fossil Fuel Funders

Investigation by Make My Money Matter finds that almost three quarters of the universities examined bank with Barclays, Europe’s biggest financier of oil and gas, despite public commitments to divest from fossil fuels.

Matt Brown via Wikimedia Commons

Ninety-five UK universities who have publicly committed to divest from fossil fuels, including colleges in Cambridge University, have been found to bank with a leading fossil fuel funder.  

A recent climate report about the University of Cambridge’s climate ties , authored by the UK’s High-Level Climate Action Champion, Nigel Topping,  recommends that “the University should not extend” their processes of scrutiny (called CBELA) “to all companies ‘facilitating’” climate change. Crucially, this includes banking partners. However, a Freedom of Information (FOI) investigation conducted by the Make My Money Matter campaign has found that universities, including the University of Cambridge, that have publicly committed to remove oil and gas from their investments and endowments continue to hold their money in some of the world’s biggest fossil fuel funding banks.  

Maintaining ties in the form of holding a current account or deposit with five banking institutions– Barclays, HSBC, Santander, Lloyds, or Natwest, who all currently continue to have financial ties to the fossil fuel industry– means that officially “divested” universities are actually indirect sponsors of oil and natural gas.

Nigel Topping’s report concludes that  “[p]roportionate approach should be taken” to reflect “the range of impact and influence that such companies have over fossil fuel company activity”.  The Topping report acknowledges that the active funding of the fossil fuel industry by the financial sector is “of course, not without criticism and controversy but represents a sea-change in commitment and momentum from this sector compared to pre-COP26”.  

Make My Money Matter’s investigation was concerned with the banking partners of ninety-five of the listed institutions, identified by People and Planet’s ‘Divested Educational Institutions’ as expressing a public commitment to divestment from fossil fuels. While nine UK universities declined to provide details about the nature of their banking relationships with the banks between April 1, 2021 and April 1, 2023,  85 confirmed that their services are provided by one of the five banking partners who still invest in fossil fuels. Barclays, HSBC, Santander, NatWest, and Lloyds have collectively provided $419 billion to the fossil fuel industry since 2016, including $141 billion to the world's top fossil fuel expanders. The University of Glasgow, which was the first UK university to commit to fossil fuel divestment in 2014, was notably found to bank with Barclays in this FOI investigation.

While stopping short of extending the CBELA process to ‘facilitating’ companies like banking partners, the Topping report recommends the University “should layout a timetable for all company engagement to require alignment with the University’s ambition over time” in a process that “should be carried out according to a transparent, reasonable and phased timetable to be produced within 18 months”.  The Topping report  states that  “no fossil fuel companies”, like BP or Shell who have provided £19.7 million to Cambridge in research funding and philanthropic donations from 2016-2022 and are actively funded by banks used by the University, “are aligned with the University’s level of ambition” for decarbonisation.   

Nonetheless, Cambridge colleges have close relationships with banking institutions, with Barclays being the most common bank used by divested universities, and a previous FOI investigation conducted by Varsity in 2022 finding that all 31 colleges in Cambridge banked with one ‘offending’ bank– HSBC, Barclays or Natwest. Almost three quarters (73%) of the ninety-five universities in the UK bank with Barclays, despite the fact Barclays is Europe’s biggest fossil fuel funder, providing  the industry with $191 billion since 2016– more than Qatar’s GDP in 2021– after the Paris Climate Agreement in 2015. 

The finding that universities, who have made a public commitment to divestment but choose to bank with institutions that are actively fuelling the escalating climate emergency, has been condemned by climate activists as extending social legitimacy to the fossil-fuel industry and undermining progressive climate policies developed by universities.   Co-Founder of the Make My Money Matter campaign, Richard Curtis told The Cambridge Student that university students have a “unique power to pressure banks to end their fossil fuel financing in a meaningful way” and to “call for a shift to funding sustainable energy”.  In polling coordinated in conjunction with Students Organising for Sustainability, Make My Money Matter  found 60% of students do not want their university to choose a fossil fuel-funding bank, with 29% of students admitting that they would feel uncomfortable continuing their studies if this was the case. “Why fire up your students with learning and at the same time condemn them to living in a world on fire?”, questions Curtis. 

Public accounts from Colleges, including Gonville & Caius’ Trustees’ Annual Report and Accounts in 2021-22, state both Barclays and Lloyds as bankers of record. Cambridge University has previously worked closely with the institution, running an Executive Education programme in the Judge Business School called “Barclays Back to Business Programme” in conjunction with the bank that aimed to help small and medium-sized businesses “create a plan for how to build a better business post COVID-19”. While the University was actively partnering with Barclays, Christian Aid cut ties with them in July 2023 because of their climate policies and The National Trust has likewise faced increased pressure from its members to end its relationship with Barclays. Wimbledon has also come under fire for accepting a multi-million-pound sponsorship deal with Barclays.

The University of Cambridge has stopped short of addressing the issue of fossil-fuel funding banking partnerships immediately. The findings of the FOI investigation reveal possible motivations for this, including banking partnerships in Cambridge and across the UK that many climate activists have condemned as egregious acts of greenwashing. However, the Topping Report recommends a review process of fossil-fuel funding banking partners that will start with the University’s “largest suppliers, who are either major financial institutions or companies from the major emitting sectors” to ensure gradually that  “all businesses” that the University engages with “in any form are aligned with its ambition on the climate crisis”.