Universal Owner Initiatives is a left-of-center think tank based in the United Kingdom and the Netherlands which advocates for reduction of carbon emissions to net-zero. The organization advocates for a concept called universal ownership theory, which states that asset managers whose clients own a representative share of the market should use their leverage to compel publicly traded companies to reduce their emissions and divest from conventional energy industries. ¹

The organization claims that companies should do this because their overall portfolio will lose more money from climate change than they would profit from investing in conventional fuels. ² Universal Owner Initiatives has also criticized the Net Zero Asset Managers Initiative, claiming that its companies were not doing enough to reduce real-world emissions. ³

Universal Owner Initiatives was founded in 2020 by Thomas O’Neill, who founded the organization to convince companies that reducing emissions was better for their investors. ⁴

Universal Ownership Theory

Universal Owner Initiatives espouses a corporate management theory known as universal ownership theory. Universal ownership theory states that universal owners are investors with portfolios that own a representative percentage of the market. According to James Hawley and Andrew Williams, the authors of the theory, the interests of these large institutional investors that own a representative percentage of the market align with the interests of the public. ⁵

While universal owners used to be pension funds, today most of the universal owners are private asset managers such as BlackRock, Vanguard, and State Street, and Universal Owner Initiatives holds that these financial institutions should use their large stakes in nearly all publicly traded companies to force these companies to reduce their greenhouse gas emissions. ⁶ The organization claims that these financial institutions have an incentive to combat climate change because while they may currently benefit from investing in conventional energy companies, the predicted threat of climate change to their overall portfolio recommends that they should decline to invest in these companies. ⁷

Other financial experts have argued that this theory violates an asset manager’s fiduciary duty to their clients to maximize returns and consider the client’s goals when investing. ⁸

Criticism of Net-Zero Compact

Universal Owner Initiatives has criticized the Net Zero Asset Managers Initiative, a group of asset managers with assets totaling $57 trillion who agreed to a compact to reduce their investments’ emissions to net zero by 2050. ⁹ The organization said that companies in this agreement are not doing enough to end climate change and instead are simply trading high-emissions assets with net-zero ones. ¹⁰ Universal Owner Initiatives also said that companies which create stock indexes should exclude companies in the oil, gas, and coal industries in their indexes, allowing asset managers who invest in index funds to create portfolios that are allegedly more environmentally friendly. ¹¹

People

Thomas O’Neill is the founder and director of Universal Owner Initiatives. He graduated from Aberystwyth University with a degree in politics and a master’s degree in international security and global governance from Birkbeck, University of London. ¹² O’Neill founded InfluenceMap, an environmental policy think tank which focuses on lobbying to reduce greenhouse gas emissions, and he volunteered as a police officer with the Metropolitan Police in London. ¹³ He founded Universal Owner Initiatives to create the “financial logic for investors to justify real-world climate impact.” ¹⁴ He was named to the Forbes “30 under 30” list in Europe for Law and Policy. ¹⁵

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9. Fletcher, Louis, and Thomas O’Neill. “Missing The Target: Why Asset Managers Have Not Committed to Net Zero.” p. 2. Universal Owner Initiatives, November 2021. https://www.universalowner.org/_files/ugd/4e1fd6_328f974fa2e24cf99499966fd2a1a120.pdf
10. Fletcher, Louis, and Thomas O’Neill. “Missing The Target: Why Asset Managers Have Not Committed to Net Zero.” p. 5. Universal Owner Initiatives, November 2021. https://www.universalowner.org/_files/ugd/4e1fd6_328f974fa2e24cf99499966fd2a1a120.pdf
11. Fletcher, Louis, and Thomas O’Neill. “Missing The Target: Why Asset Managers Have Not Committed to Net Zero.” p. 7. Universal Owner Initiatives, November 2021. https://www.universalowner.org/_files/ugd/4e1fd6_328f974fa2e24cf99499966fd2a1a120.pdf.
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