Jesus College wins grant to develop fossil-free bond index
Jesus College has been awarded a research grant to develop a fossil-free bond index - the first of its kind.
The £200,000 grant is being funded by Partners for a New Economy, a philanthropic fund focused on environmental economics, with the aim of creating a new methodology to prevent additional financing from flowing to fossil fuel expansion – through utilities, fossil fuel companies, or the banks that finance fossil fuels directly.
Dr Ellen Quigley, Advisor to the Chief Financial Officer of the University of Cambridge on Responsible Investment and a Senior Research Associate at the Cambridge Centre for the Study or Existential Risk (CSER), will lead the project supported by Dr Richard Itaman, a Senior Research Associate who joins Jesus from King’s College London where he lectured in Comparative Political Economy and Development.
Richard brings with him a wealth of knowledge and experience investigating the relationships between finance, growth and development. Richard worked in banking before completing a PhD in Economics at SOAS.
He said: “My research has looked at how finance can be made to better align with growth and development, how policies can ensure finance is linked to development and not just speculative.
“The next big thing for me was how finance interacts with the environment and how it can be more sustainable. I was looking for opportunities to pursue that area of research so when this position came up it was of significant interest particularly as it’s very purposeful in its aspirations.”
The work will involve the design and development of a methodology for assessing corporate alignment with a precautionary 1.5°C scenario as well as an affiliated bond index product.
Dr Julian Huppert, Director of the Intellectual Forum, said: “We have worked hard to create ambitious but deliverable goals to decarbonise Jesus College and our investments – but there is much more to do if the world is to tackle climate change.
“This project will use our research and academic excellence to help to transform the wider financial system and drive decarbonisation by allocating funds away from fossil fuel expansion. We know from speaking to investors that if there was a way for them to invest in fossil free bonds they would do so.”
Dr Quigley said: “From our research, we know that responsible investors can have a greater impact in the bond market as opposed to in public equity. The current options available to fossil-free bond investors, however, are few and expensive. This project aims to
bring academic rigour to the evaluation of companies’ transition plans while creating a low-cost option for investors who wish to contribute directly to the mitigation of climate change.”