985 institutions and counting: the divestment movement is gaining momentum and giving cause for hope


You could be forgiven for feeling more than a little depressed about climate change at the moment. The latest major UN report on the issue, released earlier this week, calls for ‘rapid, far-reaching and unprecedented changes in all aspects of society’ to meet the challenge. Its warning is stark: humanity has just 12 years left to keep warming below the ‘safe limit’ of 1.5°C.

Harrison Ford speaks at the Global Climate Action Summit in San Francisco, September 2018. Photo credit: Ben Paulos.

One of the strategies to speed up the transition to a carbon-neutral world that stands out in the sea of bad news, though, is divestment.

In fact, it’s getting so difficult to keep track of all the divestment announcements being made around the world right now, we’re giving you a run-down of the latest ones.

Just last month, a report from Arabella Advisors revealed that 985 institutional investors with more than $6tn (yes, trillion!) worth of assets under management had pledged to divest from fossil fuel companies.

Meanwhile, as the Global Climate Action Summit was about to begin in California, the mayors of London and New York, Sadiq Khan and Bill de Blasio, issued a call to cities to join the divestment movement and participate in a network of cities working to increase investment in clean energy.

In a joint statement, they wrote: ‘If we want to fund the scale of transformation the world needs, we must foster sustainable investment and use the power of institutional investors.’

At the same time, New York City announced it will double the share of its pension fund invested in ‘climate solutions’ such as renewable energy and energy efficiency, after publishing plans earlier in the year to divest its $189bn pension fund from fossil fuels. Berlin, Copenhagen, Paris and Sydney have all made similar commitments in previous years.

Even more good news came over the summer, this time from Ireland, as the Irish Catholic Bishops’ Conference said it too would divest from fossil fuels, joining more than 100 Catholic organisations to have made divestment commitments. This came just weeks after the Irish Parliament itself passed a bill requiring its €8.9bn sovereign wealth fund to shift investments out of fossil fuel companies.

The recognition of climate change as a serious health issue was highlighted by the Royal College of General Practitioners in its divestment announcement in July, with the College Chair Professor Helen Stokes-Lampard explaining: ‘Climate change is a clear risk to the health and wellbeing of our patients – with recent research estimating 50 million predicted years of life lost across Great Britain between 2011 and 2154 if things don’t improve.’

As the implications of the Paris Agreement become clearer and climate change impacts intensify, investors are realising that urgent action is required to bring emissions down, while engagement with fossil fuel companies is not bringing about this change fast enough.

A new report from leading US shareholder advocacy organisation, As You Sow, last month showed how the 160 climate-related shareholder resolutions filed with oil and gas companies over the past six years have had very little effect on the companies’ underlying business plans, which still ‘run counter to science-based targets and the Paris Agreement.’

And yet the motivation to divest from fossil fuels isn’t just ethical: it’s a financial one too. From the world-famous investor, Jeremy Grantham, to the finance and climate think-tank, Carbon Tracker, which has predicted that fossil fuel demand could peak as soon as 2023, the risks of remaining invested in fossil fuel companies are only going to grow.

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