Amundi Launches $660 Million Fossil-Free Fund For UK

European asset manager Amundi has been selected by a coalition of UK Higher Education Institutions (HEIs), led by the University of Cambridge, to establish a new fossil-free cash fund aimed at helping universities align their financial strategies with climate goals. The fund, valued at approximately $660 million (about £500 million), will enable universities and colleges to make short-term cash-like investments without supporting companies contributing to the expansion of fossil fuels.

The coalition, which includes 79 UK colleges, universities, and institutions, features prominent names such as the University of Oxford, London School of Economics (LSE), University of Edinburgh, and University College London (UCL). Together, these institutions have taken a collective step to ensure that their financial reserves and liquidity funds are managed in a way consistent with their sustainability objectives and commitments to reduce carbon emissions.

Amundi confirmed that the new fund will exclude fossil fuel companies, as well as utilities, banks, insurers, and other entities that play a role in the expansion of fossil fuel projects globally. The exclusion criteria extend to any company involved in or facilitating activities related to new coal, oil, or gas infrastructure. However, companies that cease to engage in such activities could later become eligible for inclusion in the fund. This approach underscores a clear incentive for companies to transition away from fossil fuel expansion if they wish to access investment from major institutional investors like these universities.

University of Cambridge Chief Financial Officer Anthony Odgers emphasized the significance of this initiative, describing it as a first-of-its-kind effort to ensure that short-term institutional investments do not inadvertently finance fossil fuel-related infrastructure. “This is the first cash fund we know of that will avoid providing liquidity to financial institutions who continue to finance companies that are building new infrastructure, such as coal- and gas-fired power plants, which will lock in fossil fuel combustion for decades,” Odgers said. His comments reflect a growing awareness among universities that their financial activities can have far-reaching implications for the planet’s energy transition.

The fund will provide universities with a practical alternative for managing their cash reserves responsibly, allowing them to maintain liquidity without compromising on environmental values. Traditionally, many cash funds and short-term investments rely on deposits or instruments issued by large financial institutions, some of which remain involved in financing fossil fuel projects. By avoiding these channels, the new fossil-free fund aims to redirect capital toward more sustainable sectors and encourage responsible financial behavior across markets.

Amundi, one of Europe’s largest asset managers, has a strong track record in responsible and sustainable investment. The firm has increasingly focused on integrating environmental, social, and governance (ESG) criteria into its investment strategies. This new mandate further reinforces Amundi’s commitment to supporting a low-carbon transition.

Jean-Jacques Barbéris, Head of Institutional & Corporate Clients Division and ESG at Amundi, said the initiative aligns with Amundi’s broader mission to combine financial performance with sustainability. “At Amundi we are committed to the view that delivering strong stewardship as well as expert responsible investment solutions will facilitate the transition to an inclusive, low carbon economy while delivering stable, long term sustainable value for clients,” Barbéris said. “This product, developed for the UK’s leading universities and higher education institutions, reflects a growing recognition among UK investors of the importance of these efforts in supporting long-term social, environmental and economic benefits.”

The creation of the fund represents not only a major financial development but also a symbolic milestone in the higher education sector’s climate leadership. Over the past decade, many UK universities have committed to divestment from fossil fuels, with the University of Cambridge and the University of Oxford both announcing plans to withdraw investments from carbon-intensive industries. This fossil-free fund marks an evolution of that commitment—moving beyond long-term investment portfolios to address even short-term, cash-equivalent holdings.

The fund’s expected launch toward the end of 2025 will likely attract additional seed investors prior to its introduction, as more institutions express interest in aligning their investment practices with environmental goals. The participation of multiple universities adds scale and credibility to the initiative, making it one of the most ambitious collective sustainability-focused financial efforts in the education sector to date.

The move comes amid increasing scrutiny of how institutional investors allocate capital, particularly in light of the UK’s net-zero targets and global efforts to limit warming to 1.5°C. By proactively redirecting cash investments away from fossil fuel-linked institutions, the coalition’s approach demonstrates how financial innovation can support environmental responsibility.

As the world transitions to cleaner energy systems, initiatives like this highlight the crucial role of investors and asset managers in driving change. Amundi’s fossil-free cash fund stands as an example of how universities, as both thought leaders and large investors, can influence financial markets toward sustainability—helping ensure that capital flows contribute to a low-carbon, resilient global economy.