The University of Oxford has confirmed it does not and will not directly invest in coal or tar sands on ethical grounds. However, the announcement has been criticised for not going far enough.

The university passed policy that stated it would “avoid future investments” in coal and tar sands.

The announcement has gained attention principally for the size of the university’s endowment – estimated to be £3.8 billion (AU$7.44 billion), one of the largest in the UK.’s Bill McKibben welcomed the decision.

“Oxford may be the greatest university on our planet, and if anyone thought its great age might keep it from shaping the future, this decision should prove them wrong,” he said. “Today it has offered great leadership on the crisis of our time.”

Oxford lecturer of philosophy Dr Felix Pinkert said, “By excluding investments in coal and tar-sands extraction, the University of Oxford demonstrates that universities can carry out their academic mission while also acting with moral integrity in their investment choices.”

However, the move has been criticised by some campaigners, because it does not apply to the large sum of indirectly invested money.

A statement from the university said its endowment management preferred investing in fund and investment groups with holdings in a number of portfolios.

“Once investments have been made, OU Endowment Management maintains close and frequent engagement with fund managers on range of issues, which include social, environmental and reputational concerns.

“As a consequence, OUem has a thorough understanding of the sector exposure of the Funds. As at 31 December, the Oxford Endowment Fund stood at £1.7 billion, with an estimated three per cent exposure to the wider energy sector. This comprised 1.7 per cent in exploration and extraction, 0.2 per cent in refining and marketing, 0.4 per cent in storage and transportation and 0.7 per cent in equipment and services. A full breakdown of all sector exposures will now be included in OUem’s annual report in June and every year following.”

The companies invested in would not be disclosed, however.

Even for directly held shares, the policy only applies for projects where over 10 per cent of production comes from coal or tar sands, allowing for direct investment in companies like Shell and BP.

It means that 70 alumni, including prominent journalist George Monbiot and green energy entrepreneur Jeremy Leggett, will now go through with handing back their degrees on 23 May as the university has not committed to divestment from all fossil fuel companies.

”With the decision today the university has taken a step forward, but not a big enough one,” Oxford Alumni Sunniva Taylor said. “I, with others, have decided to hand back my degree, in protest. This is not just a question of integrity for me. I want to use the privilege having it gives me to try [to] shake things up; to use my power to draw attention to others.”