The Request for Proposals aims to redirect financial investments to the construction of renewables and accelerate energy transition away from new oil, coal or gas projects.
A Request for Proposals (RFP) is a document from an organisation or group of organisations that outlines a project and asks for bids from prospective vendors that match a set of evaluation criteria.
It will solicit proposals from banks and fund managers for cash products, such as deposits and money market funds, that do not support companies engaging in fossil fuel expansion.
The joined-up approach emphasises the collective efforts higher education institutions can take to influence other sectors – including the financial sector – to change their behaviours and help combat climate change.
The RFP has been issued by the University of Cambridge, with the responses from banks and fund managers to be reviewed by any – or all – of the signatory institutions.
Alongside the University of Edinburgh, other institutions signed up include the Universities of Oxford, Leeds, Bristol and University College London.
Responsible investments
The extraction and burning of fossil fuels is a major cause of climate change, with banking playing a key role in financing fossil fuel production.
A large majority of primary financing of fossil fuels comes from debt – from sources such as bank loans and bonds.
While responsible investment is already more mainstream, the RFP will accelerate efforts by channelling money into energy transition away from fossil fuels, particularly in areas where finance is a key constraint for growth, such as in low-income countries.