Cambridge University could cut ties with Barclays and Lloyds over fossil fuel links

Cambridge university
Cambridge university

The University of Cambridge is considering cutting ties with Barclays and Lloyds amid concerns over the banks’ investments in fossil fuels, leaked documents have claimed.

Minutes from a recent council meeting at the university’s King’s College, leaked to student newspaper Varsity and shared with The Telegraph, suggested that Cambridge was exploring “alternatives to Barclays and Lloyds”.

The council notes from May 28 included an update from a King’s College’s bursar. It claimed King’s was “part of a concerted effort, with the university and other colleges, that has been engaging with and putting pressure on the major UK banks (particularly Barclays and Lloyds) to improve their practices”.

It said that “to escalate this work, the university launched a tender for cash and money market products that might present alternatives to Barclays and Lloyds”.

The document claimed that “the focus of the tender was on bank financing of fossil fuels in particular – but was a more general warning to the major banks that many institutions might withdraw their business if a more ethical approach was not adopted”.

It suggested that a call-out to find alternatives was “now progressing, with 24 respondents and 14 proposals able to move forward to the next stage of evaluation”.

The document suggested that its aim was to identify potential alternatives “in Michaelmas” – the start of next academic year. It claimed that if alternatives to Barclays and Lloyds were found, “there is likely to be a coordinated action across the collegiate university”.

It said that Cambridge may not actually go through with threats to ditch the banks but instead hoped to bring “reform from within”.

“The main lever held by the university and colleges is reputational impact on corporate institutions; the sums invested or banked are not large in the scale of wider institutional pools,” it said. “This has been one of the reasons why no university or college has withdrawn from Barclays.”

Cash request for proposals

A Cambridge spokesman said claims made by King’s College were not representative of the wider university.

They said Cambridge was involved in a broader coalition called the Banking Engagement Forum (BEF) that reviews its arrangements.

“The BEF, which includes a number of collegiate Cambridge institutions, has been working with close to 70 higher education peer institutions to carry out a cash request for proposals,” they added.

Anthony Odgers, Cambridge’s chief financial officer, said on the BEF website: “What we and our partners are focused on with this mandate is finding financial services products that do not contribute to the expansion of fossil fuels – in particular, new coal- and gas-fired plants which lock in demand for decades.”

The majority of Cambridge’s 31 colleges are thought to bank with either Barclays or Lloyds, and the university’s relationship with Barclays spans more than 200 years.

Cambridge students have piled on pressure to accelerate efforts to cut ties with fossil fuel-linked companies.The university has pledged to divest its £4 billion endowment from all direct and indirect investments in fossil fuels by 2030.

Barclays was the biggest funder of the fossil fuel sector in Europe between 2016 and 2021, according to a report published in February 2024 by environmental group Rainforest Action Network.

The bank provided just under $16.5 billion (£13 billion ) in 2022, though that was significantly lower than in previous years. Barclays subsequently announced it would no longer provide direct funding for new oil and gas projects.

Lloyds has “minor” links to fossil fuel funders compared with other banks, according to a Which? report from October 2023. Leeds was one of several universities that switched to the bank in 2023, saying it “has the lowest fossil fuel investments of any of the major UK banks”.

Barclays has also come under fire for its ties with companies involved in Israel. A group of Cambridge students staged a “die-in” at a Barclays bank in the city earlier in 2024, accusing it of being complicit in Israel’s killing of thousands of civilians in Gaza.

They claimed the bank also holds more than £1 billion in shares and provides £3 billion in loans to companies whose weapons, components and military technology are being used in Israel’s military operations.

A spokesman for the bank said at the time that Barclays was “committed to respecting human rights as defined by the International Bill of Human Rights and takes account of other internationally accepted human rights standards and frameworks.

“As a universal bank, Barclays provides a range of client services in relation to the shares of publicly listed companies, including those in the defence and security sector,” they added.

The leaked documents appear to show that King’s has commissioned a review of “responsible investment” following pressure from students to axe ties with the arms industry.

The college has asked its governing body to produce a review of investments next term, with recommendations to be implemented by the end of the next academic year.

A Varsity investigation in 2023 claimed that King’s invests £2.2 million in arms and defence and had increased its shares in the industry in recent years.

‘Committed to financial stability’

Barclays announced last week it had suspended its sponsorship of the Latitude, Download and Isle of Wight festivals after a boycott from bands over the bank’s links to defence companies supplying in Israel.

A spokesman for King’s College said: “We do not comment on draft internal documents. We remain firmly committed to ensuring the college’s continued financial stability in support of our outstanding environment for teaching and research, and will announce any new developments in due course.”

A Barclays spokesman said: “Barclays is committed to financing an energy sector in transition. Alongside financing current energy needs, we are working with energy companies to build the clean energy system of tomorrow, with a target to provide $1 trillion of sustainable and transition finance by 2030. Since 2020, our financed emissions for the energy sector have reduced by 44 per cent, exceeding our 2030 target.”

A Lloyds Banking Group spokesman said: “We are an established lender to the higher education sector and know that clear sustainability goals continue to be important to many of our clients, including universities. We are proud that every university that switched accounts last year decided to switch to Lloyds.”