Representatives from the Rockefeller Brothers Fund, the California Senate, the World Resources Institute, and the London School of Economics joined 350.org for a press conference on Wednesday at COP21 in Paris. They announced that $3.4 trillion in assets are now committed to divesting from fossil fuels.
May Boeve, executive director of 350.org, noted that some of that divestment is partial, involving only coal, oil, natural gas, or a mix of the three. While other commitments involve total divestment from fossil fuels. With varying degrees of disclosure, the actual amount of money divested is difficult to track, but organizations pledging either partial or total divestment represent $3.4 trillion in assets under management.
Steven Heinz, president of the Rockefeller Brothers Fund, commented on the extraordinary acceleration of the movement in the 14 months since the fund announced its divestment plans in September of 2014, from $50 billion to $3.4 trillion.
Divestment is a Moral Imperative
Heinz attributes the expansion of divestment to its “moral imperative” and the “economic rationality” of risk management, pointing to the growing number of pension funds, banks, and other financial institutions that are increasingly diversifying their portfolios away from fossil fuels.
Kevin De Leon, the president of the California senate, said that, as the seventh largest global economy, California’s move from fossil energy investment and generation proves that decoupling works, citing the state’s economic growth and shrinking emissions.
DeLeon sponsored Senate Bill 185, targeting $500 million for divestment in the state’s pension fund. The legislation follows the 2007 mandate from the California Energy Commission barring municipal utilities from operating any coal-fired power plants.
Pascal Canfin, former French Development Minister and senior advisor for international climate affairs at the World Resources Institute, said the growing momentum in fossil fuel divestment rests on ethics, financial pragmatism, and regulatory framework reform.
Canfin said fund managers must disclose risk, and increasing the “risk of liability” in fossil fuel investments creates a firm “incentive to divest.”
Several new commitments surrounding fossil fuel divestment were announced today at COP21, including:
- 19 French cities have endorsed divestment ahead of COP21: 350.org will announce for the first time that it has secured commitments from 19 French cities, including Lille, Bordeaux, Dijon, Saint-Denis, Rannes, Ile-de-France and others.
- The French parliament has endorsed divestment. On Nov. 25, the French National Assembly adopted a resolution encouraging public investors, companies (especially those in which the state owns shares), and local authorities to stop investing in fossil fuels.
- The French Ensemble Foundation will join European Divest-Invest: Jacqueline Délia Brémond, co-founder and co-chair of the French Ensemble Foundation, will announce that the foundation will join the European Divest-Invest initiative and divest its holdings from fossil fuels. Since 2004, the foundation has given over $28 million to environmental causes worldwide.
Momentum Coming into COP21
Some of the most notable new announcements since Sept. 21 include:
- Uppsala became the largest city in Sweden to endorse fossil fuel divestment.
- Münster became the first city in Germany to divest completely from fossil fuels.
- Melbourne, the capital of Australia, committed to go fossil-free ahead of COP21. Australia has seen a seven-fold growth in the divestment movement, from two councils divesting in 2014 to 14 divesting as of now. Together, these funds represent AUD$5.5 billion in assets under management.
- Oslo, the capital of Norway, announced that it would divest its $9 billion pension fund (€8 billion) from coal, oil, and gas companies, becoming the world’s first capital city to ban fossil fuel investments.
- Dutch pension fund PFZW announced it will divest from coal companies and reduce its investments in other fossil fuel companies. The fund has €161 billion of assets under management.
- The London School of Economics, one of the preeminent economics schools in the world, dropped all of its direct and indirect holdings of coal and tar sands and all direct holdings of fossil fuel companies.
- Allianz, Europe’s largest insurance company, has divested €630 million of its capital investment portfolio from coal and will reinvest over €4 billion in wind energy over the next six months. This is one of the largest funds to commit to divesting from fossil fuels. Allianz tied its announcement to COP21, making the moral and economic case for investing in cleaner technologies.
- APRA AMCOS, the biggest music industry organization in the southern hemisphere, announced its reorganization process, which includes divesting from all fossil fuels. Last year, APRA AMCOS distributed over $250 million in royalties to its 87,000 songwriter and composer members, making it a sizeable cultural force for divestment.
- Despite controversy and public pressure, the London Science Museum announced plans to dump Shell Oil as a sponsor.
- In addition to the London School of Economics, five universities from the U.K. took action: Oxford Brookes University, University of the Arts London, University of Surrey, and University of Sheffield divested from all fossil fuel companies. Wolfson College (Oxford University) divested from coal and tar sands. Fund manager CCLA, which manages investments for Birmingham City University, Cranfield University, Heriot-Watt University, University of Hertfordshire, University of Portsmouth, and University of Westminster, excluded coal and tar sands from its investments.
- The first church in Germany, the Protestant Church in Hesse and Nassau, which manages €1.8 billion, also committed to dropping investments in coal, oil, and gas.
- Two weeks ago, renowned economists Thomas Piketty and Tim Jackson wrote a letter in the Guardian urging investors to abandon fossil fuels ahead of COP21.
Image credit: Thomas Schueneman
