The institution today reviewed its policy on fossil fuel investment after calls from the Oxford University Student Union to consider divestment.

It is the first time that Oxford has stated its investment policy on oil and tar sand extraction companies, which are considered to be the most polluting. But the announcement stops short of full divestment in fossil fuels.

Campaigners have called it an important “first step” but highlighted that the policy does not stop investment in the industries entirely.

The university said that it has “reinforced” its investment policy on fossil fuels and will continue to “avoid direct investments in coal and oil sands companies” and other sectors that have high social and economic risks. It added that it currently has no direct investments in oil and tar sand companies.

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Oxford’s governing body, the University Council, decided that “robust mechanisms are already in place to ensure environmental factors are considered when investment decisions are made”. But it did ask for the level of “engagement and public reporting” on the issues to be “strengthened”.

Oxford University Endowment Management (OUem) manages Oxford’s £2 billion funds on behalf of 28 collegiate university investors. The Council’s Investment Committee will now report annually on voting decisions made by OUem and any engagement with fund managers across all sectors.

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It will also work on improving reporting on and communication of its investment strategy.

Andrew Taylor, fossil free campaigns manager at People and Planet, said that this was a “cautious first step” for Oxford.

“Many world leaders have studied under Oxford University’s spires. They should be taking notes today. The lesson is: it’s time to phase out coal and axe tar sands,” he said.

But People and Planet said that the announcement applies only to directly owned shares and not to all investments made by the university’s fund.

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It added: “[T]he exclusions for coal and tar sands only kick in for companies where over 10 per cent of their production comes from either of these sources, which means that Oxford can continue to invest in companies like Shell and BP even though they have significant tar sands projects.”

Campaigners said that Oxford has not yet committed to improving the transparency of its investments and will still not publicly disclose the names of companies that it invests in.

One Oxford campaigner, student Cara Turton-Chambers, said: “While we are pleased with today’s results, we as students feel that transparency is an issue within the university structures. Full disclosure of the university’s investments should only confirm what they have told us today.”

Meanwhile, one university alumna, Sunniva Taylor, said that the university had not taken a big enough step forward on the issue and that she and others would hand back their degrees in protest.

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Today’s announcement by Oxford follows a decision by the University of Edinburgh last week to change the way it invests in companies involved in the extraction of the highest emitting carbon fuels. Edinburgh’s move was also criticised as not going far enough by some campaigners, leading to a sit-in by students.

holly.else@tesglobal.com