Interviews And Articles by Nick Breeze
The scope of global fossil fuel divestment has doubled over the past 15 months, with institutions and individuals controlling $5.197 trillion in assets pledging to divest. The announcement comes on the first anniversary of the Paris Agreement on climate change.
No going back for clean energy transition
"One year after the adoption of the historic Paris Climate Agreement, it’s clear the transition to a clean energy future is inevitable, beneficial and well underway, and that investors have a key role to play,” said UN Secretary-General Ban Ki-moon. “I commend today’s announcement that a growing number of investors are backing a shift away from the most carbon intensive energy sources and into safe, sustainable energy. Investments in clean energy are the right thing to do — and the smart way to build prosperity for all, while protecting our planet and ensuring no one is left behind.”
According to a new analysis released today by Arabella Advisors, 688 institutions and 58,399 individuals across 76 countries have committed to divest from fossil fuels. Those sectors that have historically propelled the movement — including universities, foundations and faith-based organizations — account for 75 percent of new commitments made. Representatives from finance, philanthropy, faith, entertainment, education and others announced these numbers and showed their support for the movement at a simultaneous international press conference today in New York and London — including a former top Mobil Oil executive, Lou Allstadt, who helped implement the Exxon-Mobil merger.
Hottest year in history
“As the hottest year in history comes to a close, the success of the global fossil fuel divestment movement is undeniable. What began on a few college campuses in the U.S. has spread to every corner of the world, squarely into the financial mainstream. Divestment has permeated every sector of society: from universities and pension funds, to philanthropic and cultural institutions, to cities, faith groups, insurance companies and more. Now at $5 trillion, the movement is unstoppable. Institutions and investors must choose whether to be on the right side of history," said May Boeve, executive director of 350.org, the grassroots climate organization whose members have led the charge to divest.
Support for the movement among early adopters is now increasingly being met by support from profit-driven institutions such as large pension funds, private insurers and banks, which represent $4.5 trillion in assets, citing climate risks to their investment portfolios.
Fossil fuel industry under increased scrutiny
As more mainstream financial institutions commit to divest, the industry faces greater scrutiny. "The oil and gas industry is currently experiencing an unprecedented level of negative factors — from reduced profits to increased borrowing to pay dividends — while the costs of solar, wind and batteries continue to fall. The prudent fiduciary is acting now to reduce the risk to their portfolios. Divestment is speeding up the clock on the final accounting that will show fossil fuels are out and clean energy is in,” said Lou Allstadt, former executive vice president of Mobil Oil.
Financial industry loses faith in fossil fuels as risk of giant losses looms large
“The financial markets are fast losing faith in the investment case for fossil fuels. A technological revolution is underway in the energy and transportation sectors, as cheap solar and electric cars take away demand for coal and oil. With a climate trifecta of physical risks, stranded assets and the threat of legal liability — fiduciaries are now on notice to implement measures to protect their portfolios. Over time, climate risk management will likely become an enforceable obligation, as financial market regulators stand ready to move from rhetoric to tough action,” said Mark Campanale, founder and executive director of Carbon Tracker Initiative.
Religious voices align to demand a change of course
The report also documents rapid growth in the faith sector fueled by Pope Francis’ “Laudato Si” encyclical establishing a moral imperative to act on climate, but commitments in the faith sector are not bound to any particular religion. A recent interfaith statement calling for divestment was signed by 303 faith leaders from 58 countries.
"Islam, like other faiths, teaches and asks its adherents to implement an ethic of restraint and conservation. In the face of the global climate crisis, this ethic, while necessary, is not sufficient to meet this existential challenge and must be coupled with a ‘keep it in the ground’ investment policy: divesting from fossil fuel holdings and reinvesting a portion of these funds in renewable and clean energy alternatives,” said Imam Saffet Abid Catovic, board member of Islamic Society of North America Green Masjid Task Force. “In Marrakech, at COP22, the Islamic Society of North America (ISNA), the largest U.S. Muslim umbrella organization, was proud to announce, in keeping with Islam’s teachings, its DivestInvest commitment and to advocate the same for her constituent and affiliated organizations and associations."
John Kerry's cautiously optimistic address to COP22: "Time is not on our side!"
Cultural shifts require cultural leaders
Inspired by the leadership of Mark Ruffalo and Leonardo DiCaprio, who committed to divest and invest at the movement’s prior events, the cultural sector is mobilizing. "What the world needs now is DivestInvest Culture: A bold, collective pivot away from the old energy that no longer serves us, and toward the 100 percent renewable energy future that will let the people and the planet thrive. I am so excited to help launch DivestInvest Culture today — we are actors, musicians and artists moving our money from the past to the future," said actor Adrian Grenier, announcing the new campaign today.
These global and unparalleled commitments by both the public and private sectors are further cementing the call for a clean energy transition — and challenge the U.S. energy policy of the Trump administration, which is shaping up to favor the expansion of the financially risky and environmentally destructive fossil fuel industry.
Governments must continue to support the transition
“At the one-year anniversary of Paris, and after a historic election in the U.S., divestment is needed more than ever. When governments fall short, people step up. From Apartheid South Africa to the climate frontlines, finance is a proven lever for change. Governments should keep their promises, but investors must move their money”, said Ellen Dorsey, executive director of the Wallace Global Fund and leader of DivestInvest Philanthropy.
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