Grace on fossil fuel industry ties

Grace on fossil fuel industry ties

A report into the impacts of implementing the Grace on fossil fuel industry ties on Cambridge University’s mission.

Nigel Topping
July 2023

You probably could do better at telling governments and foundations about the importance of your work – if your scientific training was like mine, you were taught to be too modest, too careful. That training is fine for scientific presentations, but it has to be shed at fundraising time. Most of your competitors for funds and political attention do not bind themselves to the same standards of …. modesty as you do.

Donella H Meadows, A Reaction from a Multitude

Acknowledgements

This report was produced with widespread support of the report team:

Rupert Way supported background research and authored a detailed background paper on the external context which formed the basis of section 1.

Emily Bugden supported background research and authored a detailed background paper on the internal context which formed the basis of section 2. Emily was a co-author of the Divestment Paper referred to in section 2 and has been involved in advising CBELA due diligence teams.

Andrew Aldridge and Louise Ovens advised on the design of, and helped run, two town hall events open to all members of the University.

Manar Alsaif assisted with overall project management and helped ensure connection with the right members of staff involved in key parts of University’s engagement with businesses.

Richard Friend, Director of Research in the Department of Physics; Director of the Energy Interdisciplinary Research Centre; and a member of the 'reviewer pool' for the AGRP advised on University structure and decision-making processes and helped ensure broad spread of engagement with University academic staff.

Andrea Davila provided overall project management support and coordinated all engagements.

Special thanks to Ann Pelletier-Topping for support at crux moments and for editorial assistance in making the report more readable.

Whilst this was very much a team effort, and the pronoun ‘we’ is used when presenting authorial opinions, the views expressed and any errors of commission or omission remain the sole responsibility of the author of this report, Nigel Topping.

The author would like to thank the originators of the Grace for triggering this important conversation, the Council for commissioning the report and extending the report scope beyond the Grace to broader strategic and funding considerations, and the University Senior Leadership Team for providing access and ensuring a constructive, inclusive approach.

Finally the author wishes to thank the full range of members of the University community who took the time to engage in interviews and town halls which have been the prime mechanism for understanding the nuances addressed in the report. Whilst often robust, I found these conversations to be always respectful and focused on trying to aid understanding and lead to better decisions. Through these 32 interviews and two town halls (with approximately 200 participants) I was able to see the many ways in which the University is delivering excellence in teaching and research into climate solutions, and to appreciate the spirit of frank yet respectful exchange prevalent at Cambridge and so critical for our collective and individual ability to navigate disruptive change.

Interviewees included: Aga Iwasiewicz-Wabnig, Alison Traub, Amelia Jabry, Andy Parker, Andy Woods, Anna Philpott, Anne Ferguson-Smith, Anthony Freeling, Anthony Odgers, Bhaskar Vira, Bogdan Rajkov, Catherine Hasted, Charlotte Kukowski, Chris Willis Pickup, Clare Shine, Claire Barlow, David Cardwell, David Cebon, David Newbery, David Parsons, Ed Bullmore, Eliot Whittington, Elizabeth Ann Walsh, Ellen Quigley, Emily Shuckburgh, Emma Rampton, Ethan D. Aines, Gordana Najdanovic, Ian Leslie, James Cole, James Elliott, James Helm, James Murray, Jason Scott Warren, Jethro Akroyd, Joanna Craigwood, John Aston, John Dennis, Jordan Ward Williams, Jocelyn Wyburd, Kamal Munir, Karen Kennedy, Lata Sahonta, Laura Diaz Anadon, Laura Lock, Laura Torrente Murciano, Lara Oyesanya, Lindsay Hooper, Louise Atkins, Luke Kemp, Lucy Delap, Lucy Tweed, Lynn Gladden, Madeleine Atkins, Mark Lewisohn, Matthew Agarwala, Michael Pollitt, Natanael Otavio Faveo Bolson, Nigel Peake, Patrick Maxwell, Paul Dupree, Paul Ritchie, Peter Hedges, Regina Sachers, Richard Friend, Richard Harrison, Rhys Morgan, Robert Miller, Shaun D Fitzgerald, Shafiq Ahmed, Sian Dutton, SJ Beard, Stuart Clarke, Tim Harper, Zak Coleman.

Citation: Topping N (2023) Grace on Fossil Fuel Industry Ties: A report into the impacts of implementing the Grace on fossil fuel industry ties on Cambridge University’s mission.

Introduction

Cambridge position on the climate crisis, its ambitious role in addressing the crisis, and its stance towards accepting funding from sources incompatible with its best interests are laid out clearly in the University Council’s [the Council] guidance to the Committee on Benefactions and External and Legal Affairs [CBELA] regarding climate change as follows [bold in original]:

1. The University recognises that climate change is an existential threat. In line with its mission, to contribute to society through the pursuit of education, learning and research at the highest international level of excellence, the University seeks to play a critical role in addressing this challenge.
2. The University has demonstrated its own commitment through the establishment of the Cambridge Zero Initiative and its adoption of science-based targets for carbon reduction within its own operations. But, if the University’s long‑term interests are to be best served and its standing at the forefront of climate change mitigation and adaptation is to be maintained, the University must also reflect its commitment in its approach to donations and other external funding.
3. Accordingly, the Council of the University has agreed that it will not accept funding from sources where to do so would be incompatible with its best interests, having regard to its commitment to address climate change through a transition to a zero‑carbon world. To do otherwise would risk the reputation of the University and might damage the University’s ability to fulfil its mission.”

The climate crisis is existential, urgent and deteriorating, yet there still remains hope as the set of solutions becomes clearer, key technologies are adopted exponentially and institutional leadership finally rises to the challenge. As stated above, the University has taken a clear leadership position on the crisis and the role it plays in contributing to society’s response by delivering world class teaching and research.

The science is ever clearer, the impacts more and more visible. The pressure for action from citizens, governments, investors, companies and civil society grows inexorably and will not relent until institutions truly align their plans with the speed and scale of solutions needed. That pressure is rapidly being converted into regulations meaning that all institutions will likely be required to comply with the needed ambition before the end of this decade.

And so the time for leadership is now. Those who claim leadership but act with timidity or equanimity will be labelled hypocrites, suffer reputational damage, and end up aligning with agreed norms in a small number of years anyway. Those who grasp the nettle and act consistently with their leadership message will reap the reputational benefit which will last for years to come. It is for these reasons that the University's best interests will be served through a clear and world-leading response to the climate crisis.

In July 2022, 84 members of the Regent House submitted a Grace [the Grace] to the Cambridge University Council [the Council], as follows.
The Regent House asks the Council to agree that the University of Cambridge will not accept research funding or allow sponsorship or other collaborations with companies if they meet one or more of the following criteria:

• They are constructing, or facilitating the construction of, new fossil fuel infrastructure.
• They are engaged in exploring, or facilitating the exploration of, new fossil fuel reserves.
• They retain membership with trade associations engaged in political lobbying against science-based climate legislation.

The Council should instruct the University’s Development and Alumni Relations department, CUDAR, to conduct fundraising and development activities in order to replace funding which has traditionally been derived from companies which meet these criteria.

In October 2022, the Council agreed to commission an independent study to: “analyse the likely impact of the proposals in the Grace on the University’s research and teaching activities, including its ability to deliver solutions which contribute to the energy transition, and on academic freedom and freedom of speech within the University, as well as the feasibility of replacing any funding affected through fundraising and development activities.”
This report, authored by Nigel Topping, UN Climate Change High Level Champion, COP26, was commissioned by the Council in February 2023.
The Grace challenges the effectiveness of the CBELA process in implementing University policy so much of this report looks at the background to and practice of this process and at the challenge and suggested changes implied by the Grace. There are three categories of responses to the climate crisis; mitigation, adaptation and resilience, and finance (including loss and damage) and all three are covered in the report. However, given the focus on University relationships with fossil fuel companies, this report has a bias towards mitigation.

As well as looking into the impact the Grace would have if implemented both in the current form and with a series of possible amendments, the report also looks at the issues and opportunities around fundraising for climate research at the University.

The report is based on two extensive background papers, many interviews, and two ‘town hall’ meetings open to all University staff. The first paper covered the external context and forms the basis of section 1. The second looked at the internal context and forms the basis of section 2.

More than thirty interviews as well as two town-halls allowed the author to engage with approximately 200 members of the University community. Interviewees included representatives of the originators of the Grace, the senior leadership team of the University, leadership of all schools, representatives of the most affected departments, student representatives from both undergraduate and postgraduate organisations, University staff from Cambridge University Development and Alumni Relationships [CUDAR], CBELA, the Advisory Group on Research Practices [AGRP], the Strategic Partnerships Office [SPO] and the University’s legal advisors. The two town hall meetings were open to all members of the University community.

All conversations followed a consistent approach, starting with an exploration of what the University’s mission means in the context of the climate crisis, looking at what the University is doing now and could do better to play its role in accelerating solutions, and then an examination of the impact of implementing the Grace as written or with various possible amendments to avoid negative consequences.

The structure of the report, reflecting the issued terms of reference, is as follows:

Section 1 - External context

This section surveys the state of the climate system against the goals of the Paris Agreement, particularly the target to get to Net-zero emissions by 2050 [NZ2050] and the state of momentum of deployment of solutions, with a particular focus on mitigation, especially the energy transition, as it is fossil fuel companies that are at the heart of the Grace. We include a brief assessment of the investments needed in fossil fuel infrastructure in a net zero transition and of the role of fossil fuel companies in that transition. We conclude with a forward view in terms of what needs to be done to get back on track and the role of the University in that. A clear distinction is made between the level of progress to date (bad news) versus the level of momentum now (much more encouraging).

Section 2 - Internal context

This section looks at the history of the University's engagement with fossil fuel companies, the levels of funding from companies affected by the Grace in the context of overall University funding. We review the processes for deciding if both sources and uses of funds are in line with the University policy on funding in the context of its policy regarding the climate crisis. This includes a summary of the credible third-party sources of analysis on company alignment with NZ2050 used in due diligence. Finally we include a brief survey on the breadth of teaching and research on climate solutions being carried out at the University.

Section 3 - Impact of the Grace on the University – risk and opportunities

In this section we assess risks and opportunities across the University’s ability to deliver on its mission, its reputation and its ability to attract and retain talent. Across these 3 broad categories we look at the impact on teaching, research, contribution to progress, funding, and academic freedom and freedom of speech. We consider these risks and opportunities in three scenarios - business as usual, implementation of the Grace as written, and implementation of the Grace amended by this report’s recommendations.

Section 4 - Conclusions and recommendations

In this final section, recommendations are made covering both the University’s approach to fundraising for climate research, and on adjustments to the Grace as written. The recommendations seek to enhance the University’s ability to deliver its mission whilst enhancing its reputation and protecting academic freedom and freedom of speech.

Section 2 – Internal context

This section reviews the history of the University’s engagement with fossil fuel companies from the discussion about divestment of the endowment to the current Grace and then summarises the levels of funding currently being received from fossil fuel companies in the context of overall University funding. We then examine the functioning and efficacy of current University processes and review third party sources of analysis used in due diligence. Finally we sketch the current and evolving landscape of teaching and research at the University relevant to the climate crisis.

2.1 Cambridge University's history of engagement with fossil fuel companies

The University has been grappling with the question of ties to the fossil fuel industry for many years.

In January 2017, the Council received a Grace calling for the University to divest its endowment from “companies whose business is wholly or substantially concerned with the extraction of fossil fuels”. In response, the Council established a Divestment Working Group, chaired by Professor Dame Athene Donald, which recommended that “the University adopts a position of considered divestment, within a positive investment strategy and active engagement with investment managers, policy-makers and relevant sectors of industry.”

In March 2019, acknowledging the need for a “broader consideration of the issues” the Council responded to the requests set out under a second Grace, agreeing to commission a report looking into the advantages and disadvantages of a policy of divestment from fossil fuels [Divestment Report].

The Divestment Report found that while there had been some moves towards long-term climate change targets from large oil and gas companies, there had been limited action in the short term that would enable firms to deliver on the ambition of such statements. The Council welcomed the report and shortly afterwards the University announced a series of new commitments on climate change, including:

• Divestment from all direct and indirect investments in fossil fuels by 2030
• Achieve net-zero emissions across its entire investment portfolio by 2038

In light of these commitments, the University began a review of its banking relationships. Since 2020, the University and Colleges have been coordinating to engage with major banks as critical providers of new capital for fossil fuel expansion. This project has resulted in some modest concessions thus far. One major global bank included methane in their methodology and now reports on its absolute emissions. The project also contributed to a significant increase in shareholder support for a resolution filed at HSBC. A key learning identified by the participants was the potential impact that can be generated through deploying academic research and voice as a well-known and respected institution.

In 2018, the Council established CBELA [but note this was predated by ACBELA and the ‘Executive Committee of the Council’ going back to at least 1997], which scrutinises reputational risks arising from external sources of funds for philanthropic purposes and, more recently, research collaborations. CBELA is chaired by the Vice Chancellor and includes five other members of the council, including one student member. CBELA reviews all proposed fossil fuel company funding for alignment with the University policy. This process is described and reviewed in section 2.3.

The University also has a process to evaluate the research topic of proposed research partnerships with fossil fuel companies, called the Advisory Group on Research Purpose [AGRP]. This process is described and reviewed in section 2.3.

In July 2019, Cambridge became the first University in the world to adopt a Science-Based Target - to achieve absolute zero emissions across scopes 1-2 by 2048, with an aspiration to reach this goal by 2038. In addition there is active work being undertaken to set science-based targets for the most significant scope 3 emissions.

In November 2019, the University launched Cambridge Zero, a hub and umbrella initiative working to catalyse and support collaborative and interdisciplinary climate-related research projects and collaborations across the University, as well as facilitating partnerships between researchers and external partners. Importantly, Cambridge Zero ‘is not just about developing greener technologies or a zero-carbon University’ but is ‘harnessing the full range and breadth of the Collegiate University’s capabilities, both in the UK and globally, to develop solutions that work for our lives, our society and our economy.’ It identifies 62 distinct climate and sustainability-focused research groups and institutes at Cambridge in an non-exhaustive list. Recently Cambridge University Development and Alumni Relations [CUDAR] has established a dedicated fundraising effort for philanthropy on climate related topics.
In July 2022, 84 members of the Regent House submitted a Grace (the subject of this report) to the Council, as follows:

“The Regent House asks the Council to agree that the University of Cambridge will not accept research funding or allow sponsorship or other collaborations with companies if they meet one or more of the following criteria:

• They are constructing, or facilitating the construction of, new fossil fuel infrastructure.
• They are engaged in exploring, or facilitating the exploration of, new fossil fuel reserves.
• They retain memberships with trade associations engaged in political lobbying against science-based climate legislation.

The Council should also instruct the University’s Development and Alumni Relations department, CUDAR, to conduct fundraising and development activities in order to replace funding which has traditionally been derived from companies which meet these criteria.”

The criteria identified by the Grace echo the recent findings of the IEA’s NZE scenario that state that existing fossil fuel reserves will exceed a 1.5°C and even a 2°C carbon budget, so that energy demand in a NZ2050 scenario will be met ‘without approving the development of any new long lead‐time upstream conventional oil and gas projects’ as explained in section 1.

2.2 Fossil fuel industry funding in context

The University’s total income was £2,219 million in 2021/22. This included £862 million from funding body grants (research), research grants and contracts and philanthropic sources, the remainder coming from teaching income and other business activities not considered in this report.

This research/philanthropic funding is made up as follows:

Source of research/philanthropic funding	Amount
Income from funding body grants for research	£144m
Income from research grants and contracts	£552m
Income from philanthropic sources	£166m
Total research and philanthropy funding	£862m

Companies can make either financial contributions to research or philanthropic donations. These financial contributions are tracked at the University level, through the University’s finance system. Research funding is usually associated with a specific piece of research, such as a project or research centre. Philanthropic donations are less prescriptive - while they can be directed to a specific recipient, they cannot prescribe in detail how the money should be spent.

Individual researchers and research teams can also undertake consultancies directly with companies. Cambridge affiliated consultancies are conducted through Cambridge University Technical Service (CUTS), a University branded consultancy and subsidiary of Cambridge Enterprise Limited, a wholly-owned University research seed venture fund. Academics and researchers can also carry out consultancies in a private capacity (not using the Cambridge brand), which are not monitored at the University level.

The data for this study will focus solely on industry collaborations at the University of Cambridge; industry partnerships and collaborations with Cambridge Colleges and private consultancies with individual researchers are not included, as they are not tracked at the University level.

Overall income from industry was £44 millon for 2021/22, representing 5.1% of income from research grants/philanthropy, and 2.0% of total income.

The main, publicly available, source of information on funding from fossil fuel companies at the University is the Energy Sector Partnerships page. This includes disclosures of research funding and philanthropic donations from companies with major fossil fuel activities that have contributed more than £1m in funding over the last three academic years. This page aims to capture the major sources of fossil fuel sector funding at the University.

Ranges are given for awards, and it covers data from mid-2016. It finds that the only two companies that meet the £1m threshold are BP and Shell who have given £19.7m to the University in research funding and philanthropic donations in the six years 2016/17 to 2021-22, or an average of £3.3m pa. This represents approximately 0.4% of 2021-22 research/philanthropy funding and 0.1% of total income.

For comparison, this is significantly lower than the materiality threshold of £19 million used in compiling the University’s annual report and accounts.

Fossil fuel funding is also relatively small compared with other fundraising initiatives. For example, Arcadia recently awarded £23 million for a project led by the Cambridge Conservation Initiative on landscape restoration and the Victor Phillip Dahdaleh Heart and Lung Research Institute has recently received a £16 millon gift from Canadian entrepreneur Dr Victor Dahdaleh. In 2022 alone, philanthropic gifts for sustainability-related issues totalled over £67 millon.

If the University stopped accepting new fossil fuel sector funding, it would be unlikely that any faculty positions would be directly jeopardised, due to the diversified structure of the funding sources for academic positions. There would, however, likely be a more significant effect on postdoc positions and funding for PhD students, who are more often funded from a single funding source. As well as imposing general duties on the University to uphold free speech and academic freedom, the legal framework also provides protection for individuals' right to such freedoms and potential penalties (eg legal claims or regulatory action) for violating them. As such, it is important to consider the impact of the Grace on individuals' rights.

2.3 University processes for managing reputational risk of fossil fuel company engagement and external sources of due diligence analysis

At the time of the announcement of the divestment strategy in October 2020 and the University goal of absolute zero scope 1 and 2 emissions by 2038, a clear public statement was issued about alignment of funding with ambition;
The University also announces that all research funding and other donations will from now on be scrutinised to ensure that the donor can demonstrate compatibility with the University’s objectives on cutting greenhouse gas emissions before any funding is accepted.

The University has put in place clear policies and processes to implement this commitment and therefore to manage the reputational and other risks of accepting funding from fossil fuel sources, consistent with the University's legal and regulatory position as a teaching and research charity. Here we look at the details of these processes and assess their effectiveness in delivering their stated goals.

One process addresses alignment of sources of funds with the goal of ensuring they come from companies with climate ambition aligned with the University’s [as part of an assessment of the reputational risk in the contest of the best interest of the University] - this is the CBELA process.

A separate process targets the alignment of uses of funds, which aims to ensure funds are only accepted which go towards solutions to the climate crisis and not towards research which might exacerbate the problem - this is the AGRP process which is not a decision making process but provides recommendations to CBELA for final decisions.

The Grace effectively calls into question the rigour of the CBELA process given the University’s stated ambition and the scientific consensus on the transition pathway to net zero, and suggests removing the need for AGRP by proposing a blanket ban on collaboration with fossil fuel companies which fail to meet the proposed Grace criteria.

2.3.1 CBELA fossil fuel process

CBELA's role is explained in its induction documentation, which includes an explanation of its function as a committee of the University Council and the legal nuances for members of the University Council as charity trustees in considering whether to accept or refuse a donation, as follows [author’s bold]:

‘Committee on Benefactions and External and Legal Affairs (CBELA): general introduction

The Committee on Benefactions and External and Legal Affairs (CBELA) is a committee of the University Council. It scrutinises engagements between the University and external parties to ensure that they are appropriate in terms of reputational risk. This due diligence is one of the legal duties of charity trustees and CBELA acts on behalf of the University’s trustees (the Council). It also provides oversight for the University’s legal affairs.

Trustees’ legal duties and responsibilities for due diligence.

Legally, charity trustees must use their charity’s funds and assets only to further the charity’s purposes, and must avoid undertaking activities that might place the charity’s funds, assets or reputation at undue risk. In practice, this means that trustees must (among other things) carry out due diligence on those individuals and organisations from whom the charity receives donations or with whom it works closely. This duty falls to CBELA.

One aspect of protecting charity funds and assets, as well as reputation, is trustees’ responsibility to take donations. Trustees may only refuse a donation exceptionally, when: it would be unlawful to accept it, such as when the charity knows that the gift comprises the proceeds of crime; or accepting the donation would be more detrimental to the charity’s purpose than the donation would benefit the charity in enabling it to pursue its purpose.

This means that trustees must weigh risk against benefit. They might (for example) consider that taking a donation would lead to loss of donations from other supporters at least equivalent, over the long term, to the value of the donation. Or, perhaps, that the reputational damage would have an impact on their ability to recruit staff, and in our case students, that outweighed the benefits. Although a charity’s ethics and values play a part in reaching such decisions, they cannot be the decisive factors. The charity needs to be able to point to demonstrable detriment. Decisions are often not straightforward. In practice, compliance means conducting due diligence and exercising reasonable care over the selection of donors and partners in order to identify and avoid significant risks, and manage and mitigate overall risk, but it does not mean avoiding all risk. The Charity Commission supports ‘a risk-based and proportionate approach’.

In October 2020, the University adopted new CBELA guidelines “governing the acceptability of donations and other external funding to the University: climate change”. The Guidelines recognise that, if the University’s long‑term interests are to be best served and its standing at the forefront of climate change mitigation and adaptation is to be maintained, the University must also reflect its commitment in its approach to donations and other external funding.

The purpose of this process is to decide ‘on behalf of the Council whether certain other sources of external funding are acceptable on ethical or reputational grounds. To guide it in its advisory and decision-making functions, CBELA considers the extent to which the source of funds is aligned with the University’s own objectives concerning climate change’

For public companies, “CBELA looks at evidence relating to the company’s commitment to address climate change, including:

• The company’s most recent climate related disclosures, including financial disclosures;
• The company’s current position on independent, environmental impact lists such as CDP, or Carbon Tracker;
• The company’s current adoption of science-based targets or equivalent;
• The company’s lobbying activities, including through trade associations.”

In June 2021, the University introduced an enhanced set of criteria for energy companies, including a red, amber, green (RAG) scale. This scale evaluates companies against the University’s climate change guidelines. In cases where the “University’s and the company’s interests are currently not aligned and there is limited indication that the company is on a trajectory to achieve better alignment in the future”, the company is rated red and the University will not accept funds from the company (research or philanthropic).

The due diligence material prepared for the CBELA committee is excellent, well researched and clearly presented. It scrutinises fossil fuel companies’ short-term targets, investment plans and corporate policy influence for alignment with the science of NZ2050 and hence alignment with the University’s stated ambition.

2.3.2 CBELA decision clarity and impact

The CBELA process has already had significant impact in reducing the number of fossil fuel companies ranked as amber and in moving those companies over time down the ranking system closer to a red ranking. Current green rated companies include Fromatome [nuclear] and First Hydrogen [green hydrogen], amber rated include BHP and Electricity Generating Authority of Thailand [no funding projects yet approved for either of these], Shell and BP [the focus of the remainder of this section because they are the most significant sources of funding], and Schlumberger is red rated.

The current process asks a committee of non-experts to review complex due diligence research in the context of a nuanced legal role for charity trustees. Decisions are not simple, nor lightly taken, and the process design itself makes it hard to follow decision-making logic. This process design lends itself to external criticism by those who disagree regardless of what decision is taken. Hence our recommendation is that this process be replaced by one with much clearer external benchmarks as the primary decision-making tool.

Both Shell and BP are currently rated as ‘amber’ by CBELA. Detailed due diligence has been presented to the committee showing that no oil and gas companies are aligned with the University’s level of ambition on any of the three main categories of criteria. And yet, neither company has been classified as ‘red’, indicating that a partnership/collaboration would generate ‘High reputational risk [and] major concerns overall’.

To be clear, the relevant due diligence research finds that:

• On targets and reductions: all companies still fall short of ‘the absolute emissions reductions necessary to link their businesses to the finite limits of the carbon budget’.
• On CapEx alignment: all companies are continuing to explore and acquire fossil fuel resources, even though the industry already has more project options than needed for below 2°C scenarios.

The CBELA process has all the evidence it needs yet it is difficult to find the logic behind the decision to continue to accept funding from fossil fuel funding sources. It appears that the process has placed undue emphasis on the benefits of the small amounts of fossil fuel funding under consideration and underestimated both the reputational risks of taking this funding and the missed opportunities laid out in section 3. Given the high reputational risk and the relatively small amounts of funding involved, this process should be significantly tightened up to ensure much clearer decision logic and transparent alignment with the University’s stated policy objectives. We make recommendations in section 4 on how to achieve this.

2.3.3 AGRP process to ensure use of funds aligned with University ambition

The AGRP comprises subject matter experts who review all proposed research grants from fossil fuel companies; it reviews the purpose and comments on the project’s potential impact for the energy transition. The funding proposal, along with the AGRP’s comments then returns to CBELA for a final decision.

Since the new guidelines have been adopted, new research with applications to fossil fuels and related technologies, as well as research that could have dual use applications (to both fossil and other types of technologies) has been restricted. The only research grants from fossil fuel companies now being accepted are those judged by the AGRP to be contributing to solutions to the climate crisis.

Unlike some other universities, Cambridge can now say with reasonable confidence that no major research funding is going towards research into areas which could exacerbate the climate crisis as opposed to accelerating the solutions. This approach should be followed by all universities.

The AGRP process works well and no recommendations are made to amend its operation.

2.3.4 Landscape of external benchmarks assessing alignment of fossil fuel companies

There are a host of initiatives providing assessments of various aspects of company plans and activities with regards to their alignment with PA goals. CBELA due diligence work draws heavily on these. Here we provide an overview of the main initiatives.

A useful way of thinking of the various elements is to adopt the ‘5 P’s’ of the UN Race To Zero initiative, which requires companies to -

• Pledge - set a rigorous Science-Based Target for emissions reductions in the short term in line with NZ2050 or earlier, to be externally verified
• Plan - work out how you are going to get there
• Publish - disclose strategy, targets, plans etc eg via CDP
• Proceed - implement the plan and publish progress on track with targets
• Persuade - align lobbying/public affairs policy engagement and trade body membership consistent with targets and plans

In short the leading initiatives are as follows:

• CDP for corporate climate disclosure
• The Science-Based Targets initiative [SBTi] for credible short-term targets
• Transitions Pathway Initiative [TPI], CA100+ and Carbon Tracker Initiative [CTI] for assessments of company targets and plans (including CapEx)
• Influence Map for assessment of alignment of lobbying/public affairs and trade body membership

These initiatives are explained in detail in the background paper on internal context.

Any leader can set a bold target for 2050, so the key tests for corporate alignment with NZ2050 [and hence the University's Ambition] are to do with current and short-term action as follows:

• Short-term targets aligned with science-based decarbonisation pathways
• CapEx plans consistent with these pathways
• Alignment of corporate public affairs and trade body membership with these levels of short-term ambition

And indeed, these three areas are reflected in the 5 criteria reviewed by CBELA due diligence.

Next, we look at the assessment of the alignment of fossil fuel companies with a NZ2050 trajectory and hence with the University’s lowest level of ambition [NZ2048 as opposed to NZ2038] for each of these 3 criteria. After describing the general approach to each relevant benchmark, we use actual data for Shell and BP to illustrate, as these are the only 2 fossil fuel companies currently assessed by CBELA as amber.

2.3.4.1 Short-term targets

The gold standard for target setting is the Science-Based Targets Initiative but at the moment there is no published methodology for the oil and gas sector. Until this is available other proxies will need to be used.

In 2021, the TPI released a report that found that 85% of assessed oil & gas companies do not align with the below 2 degrees benchmark by 2050.

TPI finds Shell’s current emissions are not aligned with a 2.6°C world . It estimates that its short-term targets (for 2025) are also not aligned with 2.6°C, while its targets for 2035 are not aligned with 1.5°C.

TPI finds BP’s current emissions are not aligned with a 2.6°C world. It estimates that its short-term targets (for 2025) are also not aligned with 2.6°C, while its targets for 2035 are not aligned with 2°C.

Similarly, CA100+ finds that neither BP nor Shell have short-term (to 2025) or medium-term (to 2035) targets aligned with NZ2050.

Note: companies’ targets should be assessed against science-based pathways and must include all scopes [critically including scope 3, essentially the proxy for the amount of fossil fuels extracted].

2.3.4.2 CapEx plans

Perhaps the best measure of a company's commitment to the transition is the evidence of where it spends its CapEx. This is a relatively new field, and much methodological work is underway, largely spurred by the IEA’s 2021 finding that “[t]here is no need for investment in new fossil fuel supply”. Similarly, the UN Production Gap report estimates that oil and gas production must decline by between 3-4% per year to keep to a 1.5°C carbon budget. The academic literature indicates that existing proven fossil fuel reserves, if combusted, would take the world well beyond 1.5°C and even a 2°C carbon budget.

In a recent op ed, Fatih Birol, the IEA’s executive director, emphasised this finding, stating: "the push by some companies and governments to build new large-scale fossil fuel projects is not only a bet against the world reaching its climate goals — it is also a risky proposition for investors who want reasonable returns on their capital."

CA100+ finds that no fossil fuel companies have capital plans aligned with NZ2050. The best source of deep research into this issue, however, comes from CTI.

CTI has conducted in depth research on Shell’s latest energy transition strategy. It finds that while Shell has increased the scope and frequency of its climate related reporting, its transition plans are not Paris-aligned, due to: (1) a lack of interim absolute scope 3 targets, (2) continued hydrocarbon exploration and sanctioning of new fossil fuel projects, and (3) a long lead in time for scaling up low carbon activities. In 2023, the company’s CapEx guidance is still predominantly directed towards oil and gas. CTI analysis estimates that both BP and Shell’s 2022-2030 CapEx plans would well exceed a 1.7°C trajectory.

2.3.4.3 Lobbying

The Grace criteria states that the University should not “accept research funding or allow sponsorship or other collaborations with companies… [if] they retain memberships with trade associations engaged in political lobbying against science-based climate legislation.” This requires a company to take action by leaving non-aligned trade associations, and to do so in cases where the trade association’s positions are not aligned with climate science.

This is very difficult to judge as multinational companies are members of many trade bodies which they join for a large number of reasons. To cover the full range of lobbying activities both directly and indirectly through trade bodies, the best source of data is InfluenceMap. They rank companies on an A to F scale for the alignment of their engagement with NZ2050. Membership of trade bodies actively lobbying against aligned climate policy drags down the score, more so if the company has a leadership position within the trade body.

Shell and BP both score a C overall on Influence Map. Both BP and Shell remain members of the American Petroleum Institute (API), which has a poor track record on climate, scoring an F (failing grade) in InfluenceMap’s scoring system. The API has stated that it would oppose any regulations that would increase the price of US oil and gas exports, and has referred to the goals of the Paris Agreement as “aggressive”. The API took an oppositional position to the EPA’s proposed methane emissions standards in 2022. TotalEnergies left API in 2021, citing climate-related concerns, demonstrating that this is a reasonable expectation on fossil fuel companies claiming NZ2050 alignment

2.3.5 Evolving regulatory landscape for Net-Zero Transition Plans

The expectations on corporations to align with national climate goals and the methodologies to assist this are developing apace. The rapid adoption of voluntary targets has demonstrated willingness from many corporates but left a huge gap for regulation - leading the UN Race To Zero campaign to publish its ‘Pivot Point’ report calling on governments to fill the regulatory gap which voluntary initiatives can only partially address. At COP26 then Chancellor Rishi Sunak announced that all UK companies would be required to publish transition plans soon - and the Transition Planning Taskforce will announce its findings this year. The EU has just announced plans to make NZ transition plans a requirement.

All fossil fuel companies appear to fall short on meeting the proposed criteria of the TPT, being non-aligned on short- and medium-term targets, and by continuing to forecast CapEx non-aligned with 1.5°C.

2.3.6 Conclusions - fossil fuel companies alignment with NZ2050

Current best assessments of the three key metrics of NZ2050 alignment described above, by the most respected and credible neutral 3rd party organisations show that no fossil fuel companies, including those currently ranked by CBELA as amber, have short-term targets, CapEx plans, or policy engagement which are aligned with NZ2050 and hence the University’s level of ambition. This is 8 years after Paris, 5 years after the IPCC report on 1.5⁰C and 3 years into the CBELA process of assessing alignment.

As an example of a clear, fact-based decision, the Church of England recently [June 2023] moved to exclude a large group of oil majors from their pension fund:
Having already excluded 20 oil and gas majors from its portfolio in 2021, the Church Commissioners today went further, announcing that it would now also be excluding BP, Ecopetrol, Eni, Equinor, ExxonMobil, Occidental Petroleum, Pemex, Repsol, Sasol, Shell, and Total, after concluding that none are aligned with the goals of the Paris Climate Agreement, as assessed by the Transition Pathway Initiative (TPI).

It should also be noted that assessing corporate climate transition plans is a frontier domain and a rapidly evolving area, and this is a live topic beyond the University. As methodologies change and improve, criteria should be improved and updated.

2.3.6.1 Note on scope of companies affected by the Grace

The Grace asks the Council to extend restrictions to all companies not just ‘constructing’ or ‘exploring’ but ‘facilitating’. This would have the impact of extending the current CBELA process far beyond its current focus on fossil fuel companies, dependent of course on the interpretation of ‘facilitating’. This could be interpreted to cover all professional services companies with any contractual ties with fossil fuel companies such as banks, insurers, consultants, suppliers of all kinds and customers of all kinds. There is a range of impact and influence that such companies have over fossil fuel company activity. A proportionate approach should be taken, reflecting this range, the leverage that the University’s relationships with non-fossil fuel companies might reasonably have over fossil fuel company behaviour and the resource requirement to extend scope rapidly and effectively. Recommendations for considering the scope of the University’s engagement with different categories of company are included in Section 4.

As part of this consideration, a clear definition of what constitutes a ‘fossil-fuel’ company is necessary. The SBTi initiative have just such a clear definition - quoted here at length for clarity

SBTi 1 - Fossil fuel companies [not able to join SBTi until oil and gas methodology complete]:

• Companies with any level of direct involvement in exploration, extraction, mining and/or production of oil, natural gas, coal or other fossil fuels, irrespective of percentage revenue generated by these activities, i.e. including, but not limited to, integrated oil and gas companies, integrated gas companies, exploration and production pure players, refining and marketing pure players, oil products distributors, gas distributors and retailers and traditional oil and gas service companies (except as noted in category 2 below).

SBTi 2 - Companies that can join the SBTi

• Companies that derive less than 50% of revenue from a) sale, transmission and distribution of fossil fuels, or b) providing equipment or services to fossil fuel companies (see above).
• Companies with less than 5% revenue from fossil fuel assets (e.g. coal mine, lignite mine, etc.) for extraction activities with commercial purposes.
• Electric utilities that mine coal for their own power generation.
• Subsidiaries of fossil fuel companies (see SBTi 1 above) may join the SBTi if the subsidiary itself is not considered a fossil fuel company.

SBTi evaluates the eligibility of subsidiaries of fossil fuel companies on a case-by-case basis. The subsidiary’s operational model and relevance of its emissions to its parent company will be assessed.[62]

We use this definition in recommendation 2, section 4. We consider the primary activities of a company to be the key test of alignment rather than its ownership structure and conclude that the University’s best interests are served by working with companies whose business activities are focussed on the energy transition regardless of ownership.

2.4 Current teaching and research scope

There is a significant range of activities on climate and sustainability at Cambridge, across research, teaching, and engagement, all of which are evolving rapidly.

2.4.1 Research

There are many different dimensions of climate and energy research throughout Cambridge. This section outlines four cross-University energy and climate initiatives with a significant industry interface that were highlighted during interviews.

Cambridge Zero works to catalyse and support collaborative and interdisciplinary climate-related research projects and collaborations across the University, as well as facilitating partnerships between researchers and external partners. This includes organising internal and external workshops and symposia, identifying funding opportunities, and maintaining a mailing list with funding opportunities. Cambridge Zero has recently launched a new Postgraduate Academy, which will facilitate interdisciplinary research collaborations on climate change and net-zero. This model allows a great deal of flexibility for researchers to identify their research topic and partners.

The Maxwell Centre was founded in 2016 to serve the interface between industry and academia, primarily across the Schools of Physical Sciences and Technology. Zero carbon has been a core strategic focus since 2019, with a second strategic focus on science-
technology-medicine. The Centre maintains a wide network of industry links and enables researchers to work on relevant issues with their counterparts in companies, typically at a pre-competitive level. The Centre catalyses academia-industry research links through events, targeted introductions, facilitation of joint/co-created research proposals, and development of skills required by researchers for meaningful engagement with industry (e.g. through “Putting your research into context” workshops, and “Impulse for tech innovators” practitioners-led entrepreneurial training). Industry partnerships at the Maxwell take the form of either direct research collaboration with groups hosted in the Maxwell Centre (where decisions whether to engage are taken by PIs and their Departments), or co-location of companies (with access to shared offices, labs, meeting space or hot-desks).

Cambridge Institute for Sustainability Leadership (CISL) has worked on sustainability and climate change for over 30 years. Alongside its education work, it works to enhance leadership capabilities, drive solutions-focused business/policy dialogues and coordinate multidisciplinary research and insight. CISL has a significant industry interface, including several business leadership groups, such as its Corporate Leaders Groups , and various finance sector groups under the banner of its Centre for Sustainable Finance. Shell was a former member of its Corporate Leaders Groups, until the company was asked to leave in 2015 amid concerns over continued unconventional fossil fuel exploration.

The Interdisciplinary Research Centres [IRCs] were created to facilitate interdepartmental collaboration and research. The Energy IRC is the largest, with over 250 academics, and a steering committee of 25 academics from 4-5 schools, working on energy and related fields. There are many areas of research excellence at the University directly contributing to important and scalable solutions for example in the field of battery technology, photovoltaics materials and decarbonising aviation.

A reading of the six Schools' vision documents reveals scant attention to climate change and certainly not a strategic focus. A strategic review of climate change related research has just been initiated and is most welcome. There is a strong need for this kind of strategic review to balance the strength of the bottom-up researcher-led approach to agenda setting. At times of disruptive change, a process anchored in past experience and external relationships is unlikely to provide the leadership direction needed and will likely miss opportunities to move into new areas and accentuate gaps in the current research offering.

2.4.2 Curriculum and teaching.

Cambridge Zero: The Cambridge Zero Education pillar currently has three streams of work considering climate and sustainability in the context of the University of Cambridge curriculum, collaboration to develop climate and sustainability education beyond the University, and University of Cambridge student engagement. On the Cambridge curriculum stream they are currently conducting an audit of climate and sustainability education at the University which will be published internally as part of a preliminary report on climate and sustainability education at the University (August 2023). They are also conducting a student survey to gather student views on climate and sustainability education. Data currently gathered broadly indicates a strong student demand for sustainability to be represented within the taught curriculum, though there is a concurrent concern over balancing this with workload and a focus on core studies. A 2021 Cambridge Zero survey indicated that just 26% of students thought that Cambridge offered sufficient sustainability courses.

Many colleges also appoint a student officer for ethics, environment, or sustainability. Cambridge Zero runs a coordination network for these officers, as well as coordinating or supporting a range of student events, funding opportunities, and skill development schemes.

Undergraduate Study: Interviews and preliminary investigations identified the following relevant courses and actions undertaken by Departments and Schools, but note that this is not a complete list:

• The School of Clinical Medicine has employed a Climate Teaching Fellow with a remit to review clinical education and introduce climate and planetary health related content.
• The Natural Sciences Tripos has introduced a Part IB (year 2) cross school course on Quantitative Environmental Science.
• The Department of Chemical Engineering and Biotechnology are currently undertaking a curriculum review and offering a new Tripos (undergraduate course) on Chemical Engineering and Biotechnology that will integrate climate and sustainability content. This was formerly Chemical Engineering, a Part 1b, II & III option (years 2-4), accessed from Part 1a Natural Sciences or Engineering.
• The Faculty of English have introduced a course on Environmental Criticism and Posthumanism.
• The School of Biological Sciences is undertaking a curriculum review of their Natural Sciences Tripos courses that includes key skills and competences, integrating recent research relating to education for sustainability.
• The Department of Architecture are offering a new Design Tripos from October 2024 that will challenge students to think about global problems such as climate change and give them the skills to help create solutions to them

Postgraduate courses in the 2022–23 academic year included:

• MPhil in Anthropocene Studies
• MPhil in Environmental Policy
• MPhil in Holocene Climates
• MPhil in Engineering for Sustainable Development
• MPhil in Conservation Leadership
• MRes + Doctoral Training in AI for the Study of Environmental Risks (AI4ER)
• MRes + Doctoral Training in Future Infrastructure and Built Environment
• Cambridge Climate, Life and Earth (C-CLEAR) Doctoral Training Partnership

Future potential postgraduate education opportunities include:

• October 2023: The Cambridge MBA (the Cambridge Judge Business School) – a new Sustainability Pathway will offer a new Sustainable Business concentration for students with sustainability interests. Students will take a curated set of relevant electives; experience meetings with leading sustainability practitioners; undertake a final capstone project related to sustainability; and have access to a range of sustainability-related electives, projects and speaker events.
• October 2024: MPhil in Quantitative Climate and Environmental Sciences (School of Physical Sciences) – This 10-month cross-departmental programme will cover a range of skills required for understanding and modelling of climate and the environmental processes. The course will train a new generation of scientists to work with environmental data to address the myriad of challenges associated with global warming.
• (in development) MPhil in Energy Materials (Department of Materials Science & Metallurgy).
• (in development) CDT in Sustainable Energy Material Innovation (School of Physical Sciences).
• (in development) PGCert in Sustainable Healthcare (School of Clinical Medicine).

The University also offers a number of executive education courses on sustainability, including:

• CISL Master of Studies in Sustainability Leadership
• CISL Master’s in Sustainability Leadership for the Built Environment
• CISL Postgraduate Diploma in Sustainable Business
• CISL Postgraduate Certificate in Sustainable Business – organisational/value chains
• CISL Postgraduate Certificate in Sustainability Leadership for the Built Environment
• BS open programmes in Environmental, Social and Governance (ESG)
• IfM Engage open course in Weathering the Climate Crisis
• IfM Engage open course in sustainable value innovation

CISL offers a range of online courses focused on sustainability and Cambridge Advance Online also offers a range of online short courses including sustainability-focused courses such as Climate Change for Decision-Makers, and ESG Risk Management.

Many departments are currently undertaking a curriculum review, including the Department of Chemical Engineering and Biotechnology.

Recent experience, for example in the runaway success of the launch of the Masters in Climate, Management and Finance at Imperial College suggests that there is very strong demand among both undergraduate and postgraduate students for climate related content and hence significant opportunities to attract talented students and grow student income. In addition there is also increasing demand from employers. For example, there is a strong demand for an MBA programme with a sustainability focus.

Section 4 – Recommendations

This report has shown that the University is a world leader in multiple areas of climate teaching, research and influence with the potential to raise orders of magnitude more finance to promote this agenda than the small amounts which are the focus of the Grace. The first recommendation therefore is to launch a much bolder fundraising initiative. The implementation of the Grace as written is not compatible with the University’s mission or its duties in relation to academic freedom and freedom of speech because it goes too far in restricting valuable research collaborations and individual academic ability to engage with partners of their choice. However, the core argument behind the Grace, that the University’s CBELA process does not rigorously implement the University's policy on restriction of funding from non-aligned fossil fuel companies has real merit. The recommendations that follow thus suggest implementing an amended form of the Grace which protects the University reputation and therefore its best interests by rigorously and transparently using credible third party assessments of company alignment as the main basis for CBELA decisions, whilst retaining discretion in exceptional circumstances. Further recommendations suggest ways to achieve consistency across all business relations over time and provide clarity as to which restrictions to apply to companies red-rated by CBELA without impinging excessively on ability to deliver research solutions or on academic freedom and freedom of speech.

There are four main recommendations:

1. The University should instigate a major [at the scale of £1bn] fundraising initiative to promote Cambridge University as the leading global multi-disciplinary teaching, research, innovation and advisory University. This should cover all existing relevant and possibly new University collaborations, including Cambridge Zero and might include the refurbishment of an existing building to highest sustainability standards. The University is wasting valuable resources managing a small amount of controversial funding and missing the opportunity to raise orders of magnitude higher funding to focus on its much broader research, teaching and influence agenda.
2. The University should clarify the current CBELA process, maintaining discretion but largely relying on simpler tests and third party analysis. The University is exposed to high and rising reputational risk due to the unclear link between due diligence and decision-making to deliver the University policy of only accepting funding from companies aligned with its level of ambition on climate change, and this is not in the University’s best interests. CBELA should adopt the SBTi definition of ‘fossil fuel company’ to cover companies substantially involved in fossil fuel extraction but not wholly or partially owned subsidiaries focussed on clean technology solutions.
3. The University should not extend restrictions imposed as a result of CBELA red rating to ‘other collaborations’. To do so would severely restrict the ability of researchers to work on practical solutions, would seriously restrict academic freedom and freedom of speech, and would lead to a loss of impact.
4. The University should not extend the CBELA process to all companies ‘facilitating…’ but should lay out a timetable for all company engagement to require alignment with the University's ambition over time [covering funding, philanthropy, research collaboration and procurement]. Starting with its largest suppliers who are either major financial institutions or companies from the major emitting sectors, then other large companies with which the company has a relevant relationship and finally SMEs, the University should ensure all businesses with which it engages in any form are aligned with its ambition on the climate crisis. This should be carried out according to a transparent, reasonable and phased timetable, to be produced within 18 months.

Detailed recommendations

1. Instigate a major fundraising initiative

1.1 Set a globally significant bold goal – £1bn would reflect the reality of the Doerr donation to Stanford and demonstrate serious ambition that would require a step change in institutional leadership, thinking and collaboration.

1.2 Make this a collaboration across all Schools – start by inviting all Schools to specifically address climate crisis teaching and research needs and opportunities in their strategic vision documents which are woefully lacking in strategy or vision with regards to the climate crisis at the moment.

1.3 Invite CUDAR and the Strategic Partnerships Office to explore much bolder partnerships with the new clean energy majors such as Iberdrola, Orsted, Envision, NextEra Energy, Enel. These should all be the target for multi-year, £multi-million relationships. They are spending 3–5 times the levels of CapEx that BP and Shell are on the energy transition.

1.4 The Vice-Chancellor should lead this initiative, with CUDAR tasked with coordinating across all schools and the SLT.

1.5 Define a clear vision of a global Centre of Excellence for tackling the climate crisis, including earth systems science understanding of the problems, science and technology development of solutions at scale, policy innovation and advice, and legal, financial and economic innovation to direct public and private finance at the speed and scale needed.

1.6 Include a significant entrepreneurial incubator and spin-out element to this vision covering the full range of new business products, services and models, including working to mobilise the wider Cambridge enterprise ecosystem.

1.7 Include in this process financial mechanisms for incentivising collaboration and boldness in order to facilitate the early stage work of developing new collaborations whether in terms of whole new centres or for major research themes.

1.8 Carry out a specific review of the research capabilities, technology development potential, and incubation opportunities around all forms of carbon dioxide [and other GHG] removal, storage and use, with a view to both supporting current research themes most affected by a reduction of funding from [currently not NZ2050 aligned] fossil fuel companies and significantly broadening the research agenda beyond the narrow part of the solution space which favours fossil fuel company capabilities.

2. Clarify current CBELA process

2.1 Keep the CBELA climate change focus on Fossil Fuel industry for now - and adopt the SBTi definition of a fossil-fuel company, see section 2.3.6.1.

2.2 Replace the slow, vague decision-making process with one largely relying on credible third party providers of assessments of NZ alignment, whilst maintaining discretion in exceptional circumstances.

2.3 Use 3 tests of alignment

• Short-term targets aligned with scientific pathways to NZ2050
• Short-term CapEx plans aligned with these targets
• Policy influence activities reasonably aligned with these targets

2.4 Implement this revised process immediately using partner-provided data for these 3 tests [with recommended compliance definition] as follows:

• Short-term targets NZ2050 aligned - TPI green or CTI analysis
• Short-term CapEx NZ2050 aligned - CTI analysis
• Policy influence - InfluenceMap C+ or higher [and rising over time]

2.5 Partner with a credible third-party data provider [recommended Climate Arc] as the medium term partner to bring order and simplicity to these inputs as methodologies evolve [eg SBTi Oil and Gas methodology, UK and EU Transition Plan requirements]. Consider partnering with TPI or CTI for regular standardised updates on the first two tests, and to add additional [e.g. private] companies if needed, and with InfluenceMap on the third test.

2.6 Immediately inform current amber rated partners who will shift to red rated under this clearer process, and very explicitly explain the line they would need to cross to return to amber. VC to meet the CEO in person and confirm in writing.

2.7 Give affected companies a short time [recommend 3 months] to change plans/engage with data partners, to make a case for adjusted rankings. The University to stay out of this process.

2.8 Publish the University criteria and affected companies and scores - transparency is the key to trust.

2.9 Retain AGRP process on use of funds as currently operating.

2.10 For clarity note that the recommendation to follow the SBTi definition of fossil fuel companies means that the CBELA process would not cover wholly or partly owned subsidiaries who are not focussed on fossil fuel extraction but on clean-tech acceleration.

2.11 Explore partnering with a wider group of universities facing similar challenges in order to adopt a common approach based on common criteria and common data sources.

2.12 Commit to reviewing the 3 recommended tests and 3rd party analytics partners on a regular basis [say every two years, with support of Climate Arc or similar] and as methodologies and regulations evolve. Ensure the review considers the University's charity law framework and any updated law or guidance on its trustees' duties on accepting or refusing donations.

2.13 Any changes in CBELA ratings should not be applied retrospectively to existing agreed funding relationships - these should run their course, providing some buffer for research initiatives and staff. The University should consider supporting these areas of research from central funds for a limited period of time to allow a smooth transition.

2.14 Give further consideration to ensuring that any decision with respect to funding takes into account the University's legal duties with respect to freedom of speech and academic freedom in respect of any significant impacts on particular departments, research groups and/or individuals.

3. Do not extend the scope of CBELA climate change considerations to ‘all collaborations’

3.1 Allow all forms of [non-funded] technical collaboration with fossil fuel companies even if red rated for funding.

3.2 Allow multi-company technical collaboration to include a small minority [say less than 25%] of red-listed fossil fuel companies, even if this collaboration requires small [say less than £100k each] of funding from all participants. This kind of collaboration is key for complex supply chain reconfigurations needed to address the climate crisis and minority participation mitigates the influence and reputational risks associated with headline funding.

3.3 The above should still be subject to continuing effective receipt of advice from AGRP to ensure this research is focussed on solutions to the climate crisis and has no dual use associated with improvements in fossil fuel extraction.

4. Phase-in climate alignment expectations on all companies with whom the University has a relationship of any form [excluding investments, covered by divestment policy]

4.1 Define 3 groups in order of importance and urgency.

4.1.1 Major suppliers, particularly financial institutions and major emitters [as defined by CA100+ or similar].

4.1.2 Other large suppliers/partners.

4.1.3 SMEs
[note these groups labelled A, B, C respectively in sequencing recommendation 4.5].

4.2 Define scope of relationships to include research funding and collaboration, procurement, and others as appropriate taking due consideration of the need to preserve freedom of speech and academic freedom.

4.3 Within 18 months publish a plan and timetable of how the University will expect companies to demonstrate alignment with its ambition.

4.3.1 Transparency of disclosure appropriate to size and sector [as a first step, and to help the University establish this plan, the University should partner with CDP to join their supply chain transparency initiative, thus joining hundreds of organisations who are on a similar journey].

4.3.2 (Short- and medium- term) targets in line with NZ2050 [the University to partner with or at least signpost to SBTi, as US federal administration has done recently for all federal procurement].

4.3.3 Plans in line with this ambition [as is being mandated in the UK and EU].

4.3.4 Policy engagement in line with above ambition.

4.3.5 Demonstration of progress with above plans.

4.4 When the plan is published, clearly communicate the implications of not being aligned.

4.4.1 For fossil fuels companies this is the subject of this report.

4.4.2 For all other companies and types relationship this will need to be defined but we recommend the following although this is not exhaustive

• Headline funding - not accepted if not aligned [but collaborative funding and non-funded collaboration accepted as per recommendation 3
• Procurement initially tilted towards those companies aligned, with a grace period of 2 years, following which companies will be excluded from procurement processes.

4.5 An indicative sequencing is as follows [groups A, B,C as per 4.1]

Sequence	1	2	3	4	5
Disclosure	A	B	C
Targets		A	B	C
Plans		A	B	C
Policy			A	B	C
Progress			A	B	C

Note there is a vast amount of support resources available for all these companies, and most will already be working on all elements so those well prepared will find these timings easy to achieve. In particular note CDP, We Mean Business [WMB] and SBTi have resources specifically tailored to SMEs.