LSE and BP locked into permanent relationship

By Vanessa Huang

A relationship between LSE and British Petroleum (BP), sustained thus far for over 30 years, will continue indefinitely following an initial donation from the oil giant.

A Freedom of Information request made by The Beaver has revealed that LSE accepted £1.25 million from BP in 1990, with the funds used to establish the BP Centennial Professor scheme, a one-year visiting appointment.

The post is designed ‘to attract academics of outstanding international distinction’ in the areas of business policy, economics, finance, politics, and international trade. Alongside research and teaching at LSE, selected candidates are required ‘[t]o contribute to the internal education programme of BP and to develop contacts between the school and BP.’

The funds, received in £250,000 tranches over five years, were donated to LSE as a permanent endowment, meaning the current agreement will remain in perpetuity.

This news comes as calls mount for universities to cut ties with fossil fuel companies. In a first for leading universities, staff at the University of Cambridge are set to vote on whether future donations from fossil fuel companies should be accepted.

LSE has previously avoided sharing the sources of its finances, declining to reveal recent donations from fossil fuel companies in a 2021 open Democracy investigation. LSE cited an exemption to the Freedom of Information Act, saying this would “prejudice the commercial interests of the school, by making it more difficult to raise funds from private donors in the future.”

Apart from accepting donations from fossil fuel companies, LSE has also come under fire for rejecting calls to divest from fossil fuels, as The Beaver reported last year, with 0.4 percent of its investment portfolio in 2021 exposed to coal, tar sands, tobacco, and controversial weapons.

LSESU Environment and Ethics Officer Sophie Trott commented, “I think it is extremely concerning that this relationship is continuing in spite of LSE’s so-called ‘carbon neutral status’. It is disappointing that students are continually excluded from funding decisions that ultimately result in partnerships inimical to students’ values. Ultimately, this is just another example of LSE management failing to be held accountable to its environmental and ethical commitments, as well as to its students.”

An LSE spokesperson commented, “We are committed to making sustainability a key part of our investment decisions, and we will continue to review our policies and consider further steps and actions we can take, in line with the investment area of our Sustainability Strategic Plan.

“We recently published our new Environmental, Social and Governance (ESG) policy with input from the whole LSE community, including students.

“Since 2015, our investment exposure to tobacco manufacture, controversial weapons or companies which are significantly engaged in the extraction of thermal coal and tar sands, the most polluting of fossil fuels, has reduced by over 80 per cent. The total exposure of the portfolios was 0.6% in 2021-22 – 0.2% tobacco, 0.3% tar sands, 0.1% thermal coal and no holdings in controversial weapons.
“Our ESG policy will continue to involve selecting externally managed funds that minimise indirect investments in the worst-offending sectors. It also sets out to support companies aligned to rigorous net-zero/climate targets and divestment from those that are not.”