IKEA charity arm’s funding to support four projects led by the University of Oxford’s Sustainable Finance Group

The University of Oxford has secured a £4.5m grant from the IKEA Foundation to support several projects aimed at helping the financial sector better understand the impact of their investments on the climate crisis and net zero transition.

The funding, which was announced yesterday, is targeted at four projects being run by the University’s Sustainable Finance Group, including efforts to improve financial data for polluting industries, track changes in the costs of capital, and boost sustainable finance skills and expertise.

One of the projects also aims to develop, pilot, and scale up new and more impactful forms of engagement between financial institutions and the companies they invest in, amid concerns that current efforts to encourage firms to decarbonise and address climate-related risks are not achieving the pace and scale of change required to hit global climate goals.

Dr Ben Caldecott, director of the Oxford Sustainable Finance Group, said action was urgently needed to transform the financial sector so that it can drive the transition to a net zero emissions economy, and as such the four new projects are aimed at delivering “transformative interventions” across the sector.

“We need to transform financial decision-making so that the capital and financial services needed to deliver global net zero by 2050 are actually provided,” he explained. “We have very little time left and that’s why we’re working on what we think could be transformative interventions.”

“This is about going after the big wins, not slight improvements and incremental change,” he added.

The first project, the Spatial Finance Initiative, aims to publish consistent, comprehensive, and accurate asset-level data for the most polluting sectors, in a bid to make climate and environmental factors facing assets, companies, and portfolios “completely transparent”, the Group said.

Another project aims to create a ‘Public and Third Sector Academy for Sustainable Finance’ in order to support public sector and civil society organisations which lack expertise and capacity in this area.

“The Academy will give governments, regulators, central banks, charities and philanthropy the knowledge, networks and skills to shift tens of trillions of dollars of capital away from unsustainable activities to those aligned with the Paris Agreement,” according to the Oxford Sustainable Finance Group.

The funding will also support a project designed to track changes in the cost of capital for polluting companies investing in green technologies and the factors which influence these changes, with the resulting insights used to inform policies, regulations, and campaigns that aim to “transform the energy sector”, it said.

And finally, the ‘future of engagement’ project will focus on developing new engagement strategies to aid financial institutions dealing with companies which are failing to take action to decarbonise their businesses and supply chains at the pace and scale required to reach the goals of the Paris Agreement.

Liz McKeon, IKEA Foundation’s head of climate action, said there was a need for academic institutions such as the University of Oxford “to provide the north star – the compass, so that we’re getting the best information possible to ensure our actions benefit people and the planet”.

“We have less than 10 years to reduce greenhouse gas emissions and temperature growth to 1.5°C and we cannot make it without interventions from and change within the finance sector,” she explained.

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