Divestment from fossil fuels campaign

(December 2017) By the end of 2017, the tide has turned rapidly against investments in fossil fuel companies. December 2017 could well be the turning point in the divestment movement. Announcements in New York signaled what was perhaps the biggest single day of the 350.org’s divestment campaign in history. New York State and city endowments and portfolios engaged in the process collectively manage more than six trillion dollars in assets. The announcements by Mayor Cuomo and Governor Stringer sent the signal that, in the very center of world finance, sentiment is turning sharply against fossil-fuel investing.  Pension funds are willing to divest because they’ve come to believe that the future no longer is about coal and oil, both declining businesses.
Although divestment will not happen overnight, they follow encouraging echoes of other recent developments during the final two months of 2017. Norway, for instance, began work to divest its giant sovereign-wealth fund, which is bigger even than New York’s combined pensions, and the World Bank said it would no longer be lending money for oil and gas exploration. It’s not that the fossil-fuel industry will go bankrupt overnight, but the shift in the Zeitgeist has been dramatic.
(Edited from Bill McKibben article in the New Yorker)

Responsible investment means recognizing that our finances have major social and environmental impacts worldwide, from peoples' working conditions, to their health, to the very land they live on. Colleges and universities, controlling over $400 billion, have a responsibility to make a more sustainable and socially just endowment a reality, and some already have.EndowmentEthics.org.

  • How the movement began
  • Latest developments
  • Colleges and schools
  • Church support for divestment
  • Bank & Corporate responses
  • Miscellaneous investment news briefs
See also fossil fuel subsidy page
Keep it in the Ground - Guardian link

 How the movement began

October 2014:
Fossil fuel divestment: a brief history.  (May 2015 - divestment news is now almost a daily occurrence as pressure, mostly from young people, has built rapidly over the last twelve months. When I began this page divestment was in its early stages. AB)

Divestment: The fossil fuel industry is facing a threat it has never faced before: The growing belief among global leaders, investors, scientists, and large corporations that the use of fossil fuels must be sharply curtailed, if not phased out, for the sake of future generations. Statements from the International Energy Agency, World Bank, the Organization for Economic and Co-operation and UN General Secretary Ban Ki-moon have all reinforced the notion that most of the fossil fuel reserves already claimed by companies must stay in the ground if the world is to avoid climate change that's catastrophic for coastal regions, food production, water supplies and more. (link) Developing quickly over the last year or two, fossil fuel investments, either at government level or institutional level, are under attack. Pressure at the grassroots level - that is ordinary people demanding that their governments cease subsidies to companies making huge profits at taxpayer expense - is paramount to transitioning to renewables. Continuing pressure on institutions, academic, faith community and at the municipal level can help divert support for fossil fuels to alternatives which will have to become the bedrock of future energy supplies for the planet.

December 2015: The year divestment hit the mainstream. No longer a movement confined largely to college campuses and religious institutions, the fossil fuel divestment campaign went mainstream in 2015, earning support from lawmakers, big banks and celebrities. At the Paris climate talks, a round of new divestment commitments was announced, including those by the French Ensemble Foundation and the Norwegian capital of Oslo. To date more than 500 institutions and hundreds of individuals in control of more than $3.4 trillion in assets have agreed to at least partially sell their investments in coal, natural gas and oil companies, according to the environmentalists tracking the industry at 350.org and Divest-Invest. That represents a nearly 70-fold increase in assets tied to companies involved in divestment since September 2014. link    

March 2015: An opposing viewpoint
Gerrit Heyus argues in the Guardian that the fossil fuel divestment campaign is inherently flawed.  link

 Latest developments

November 2017: Growing number of global insurance firms divesting from fossil fuels
. Report shows around 15bn of assets worldwide have been shifted away from coal companies in the past two years as concern over climate risk rises. The study by the Unfriend Coal campaign says 15 companies, almost all based in Europe, have fully or partially cut financial ties. link

May 2017: Top UK fund manager divests 20m. One of Britain’s biggest managers of ethical funds is to dump 20m of shares in fossil fuel companies in one of the biggest divestments so far because of climate change. The Archbishop of Canterbury played crucial role in BMO Global Asset Management’s decision. More than $5 trillion institutional assets, such as pension funds, now have some sort of divestment strategy in place and one-third of UK investors say they would like a fossil-free option for their savings. link

February 2017: Ireland set to be the first nation to completely cut investment in fossil fuels. Ireland has made history by passing a bill that will stop all investments in coal and oil. By December of 2016, The Divest Invest Initiative had already gathered almost $5.2 trillion in fossil fuel divestment pledges from 76 countries.  link
February 2015: Fossil fuel divestment movement moving at express speed.  link

December 2106: Climate divestment funds exceed oil & gas sector listings. The value of organisations committed to ditching their holdings in fossil fuels is now bigger than all listed oil and gas companies according to a new report. The Divest-Invest network says 688 organisations, worth more than $5 trillion, across 76 countries are now signed up to the movement, which started with a few US universities back in 2013. link

May 2016: Major divestment by Gates Foundation. In the final quarter of 2015 the foundation sold all $178 million worth of their BP shares. This is on top of the sale of over $800 million worth of Exxon stock which was disclosed last fall. This means that the Gates Foundation has now dropped their total fossil fuel holdings from somewhere in the region of $1.4 billion two years ago, to closer to $300 million today. link

March 2016: Rockefeller family charity to withdraw all investments in fossil fuel companiesA charitable fund of the Rockefeller family, who are sitting on a multibillion dollar oil fortune, has said it will withdraw all its investments from fossil fuel companies. The fund singled out ExxonMobil for particular attention describing the world’s largest oil company as “morally reprehensible”. John D Rockefeller, who was the richest person is US history when he died in 1937, made his fortune from Standard Oil a precursor of ExxonMobil.  link

September 2015: Divestment movement now stands at $2.6 trillion. Over 2,000 individuals and 400 institutions are now committed to pulling their money from fossil fuel companies, together representing a remarkable $2.6tn of investments. A new analysis shows the value of the funds committed to selling off their investments in coal, oil and gas companies has rocketed in the last year, rising 50-fold. Major pension funds and insurance companies have joined the universities and churches that founded the divestment movement, all of whom fear the impact of climate change on both the world and the value of their investment portfolios. link

 Colleges and schools

College divestment campaign -

November 2013: A divestment movement is marching across U.S. college campuses, borrowing tactics from the 1980s anti-apartheid campaign and using them against oil, gas and coal companies to fight climate change. Students are teaming with investment advisers to convince universities, pension funds and institutional investors that they can take a stand against fossil-fuel companies without hurting their returns.  link

February 2018: Largest UK university divests from fossil fuels. Edinburgh University is dumping all its fossil fuel investments, making it the largest UK university endowment fund to be completely free of all coal, oil and gas holdings. The decision followed a long student campaign. More than 60 UK universities have now divested from fossil fuels. link

March 2016: Top Canadian University graduates to return diplomas. Last year McGill university’s administrators accepted a mock cheque from students for $43 million, the amount they’ve lost in fossil fuel holdings since students first demanded they divest three years ago. Students have tried petitions, research briefs, faculty letters, camping for a week on campus. But for a university that considers itself the Harvard of the north, McGill’s administrators have shown little readiness to listen to reason.  link

December 2014: College divestment proving positive. On college campuses nationwide, the key argument against divestment has been that it’s not economically feasible, and would be an abdication of fiduciary responsibility. But evidence is mounting against that argument. Sterling College in Vermont, for example, is seeing an improvement their Investments. link
(See also GoFossilFree.org,)

April 2014: Carbon divestment activists claim victory as Harvard adopts green code. Harvard, with a $33bn endowment, has become the first American university to sign on to a UN-backed code of responsible investment in a move to assuage a carbon divestment campaign. While the new guidelines do not commit Harvard to selling existing holdings in fossil fuels, campaigners still claimed the step as a victory for a divestment movement that has now spread to more than 500 university campuses and other institutions across America and Europe. Nine colleges have so far divested fossil fuels, the campaign said. Harvard also committed to cutting greenhouse gas emissions 30% from 2006 levels by 2016. link  (Support from faculty for campaign - link)  

March 2015: Tracking academia’s fossil fuel divestment. More than $50 billion in divestment pledges have come from 28 universities, 41 cities, 72 religious institutions, 30 foundations and hundreds of individuals. As the fossil fuel divestment movement enters its fourth year, nearly a third of the 28 schools that signed on have completely purged oil, natural gas and coal investments from their endowment portfolios. Many of the nine schools that have fulfilled their divestment pledges joined the fast-growing campaign as early as 2011; this group mostly involves small New England and California colleges that are overseeing relatively modest endowments. link

 Church support for divestment

October 2017: Catholic Church to make record divestment from fossil fuels. More than 40 Catholic institutions are to announce the largest ever faith-based divestment from fossil fuels. The sum involved has not been disclosed but the volume of divesting groups is four times higher than a previous church record, and adds to a global divestment movement, led by investors worth $5.5tn.  link

July 2015: Church of England approves divestment policy. The Church of England’s governing body, who manage investments worth 6bn, has thrown its weight behind efforts to slow climate change by backing the move earlier this year to divest its resources from companies involved in extracting two of the most polluting fossil fuels (tar sands and thermal coal). The General Synod debate took in potential future divestments, Arctic drilling, energy efficiency of church buildings and even the CO2 emissions connected with the internet. link

The Unitarian Universalist Association joins fossil fuel divestment movement - link
World Council of Churches disinvests link

 Bank and corporate responses

January 2018: Lloyd's of London to divest from coal over climate change. The world’s oldest insurance market, has become the latest financial firm to announce that it plans to stop investing in coal companies. The firm has long been vocal about the need to battle climate change, with insurance one of the worst affected industries by hurricanes, wildfires and flooding in recent years. link

January 2018: New York City's fossil fuel divestment could spur global shift. “This is a really big deal,” said Jeffrey Sachs, an economist at New York’s Columbia University and special adviser to the UN secretary general. “The divestment movement is active and growing and by its nature, New York will play a big leadership role. New York hosts Wall Street, the UN and the US media; it will now be the centre of climate action too."  link

December 2013: Beginnings of divestment from coal by investors. About $8 trillion of known coal reserves lie beneath the earth's surface. The companies planning to mine and burn them are being targeted by the growing ranks of investors concerned with the greenhouse gases that will be made. The divestment movement is an offshoot of a campaign by more than 70 investors to pressure all fossil-fuel industries on climate change. Coal is currently not in retreat: in 2011, coal was used to generate 30.3% of the world's primary energy, the highest level since 1969 - that share slipped only to 29.9% last year. Future curbs on carbon emissions beyond 2020 may cut valuations on coal assets by as much as 44% according to HSBC. link

January 2014: Foundations band together to get rid of fossil fuel investments. Seventeen foundations controlling nearly $1.8 billion in investments have united to commit to pulling their money out of companies that do business in fossil fuels. The participation of the foundations, including the Russell Family Foundation, the Educational Foundation of America and the John Merck Fund, is the largest commitment to the effort, and stems in part from a push among philanthropies to bring their investing in line with their missions.  link   

September 2015: California's biggest pension funds to divest. California passes bill forcing biggest pension funds to divest from coal. California lawmakers passed a bill on Wednesday requiring the state’s two largest pension plans to divest their holdings in thermal coal as part of a push this legislative session to address climate change. The two funds have total holdings in coal of $207 million. link

June 2015: Coal giants left unscathed by growing divestment campaign. The biggest names in mining have so far found themselves immune to a rapidly expanding campaign that’s seeking to curb the use of the most polluting fossil fuel. The criteria used to select candidates for divestment exempts some of the biggest producers, however. That’s because those companies are large, diversified miners and only get a small part of their revenue from coal. link

April 2015: HSBC advises clients to divest from fossil fuels because they may be too risky. Often dismissed as unwise by oil industry proponents and criticized as a distraction even by supporters of action on climate change, the divestment movement is no longer being ignored. On April 21 HSBC wrote in a private note to its clients that there is an increasing risk that fossil fuel companies will become “economically non-viable.” As a result, HSBC advised its clients to divest from fossil fuels because they may be too risky. If investors fail to get out of fossil fuels, the bank says, they “may one day be seen to be late movers, on ‘the wrong side of history.’”  link

Overseas reaction

May 2015: Norway decision could trigger wave of large fossil fuel divestments. Norway’s decision to dump all coal-focused investments from its $900 billion sovereign wealth fund unleash a wave of divestment from other large funds, according to investment experts. The fund, the largest in the world, is one of the top 10 investors in the global coal industry. The move is one of the most significant victories to date for a fast-growing UN-backed fossil-fuel divestment campaign. It will affect $9bn-$10bn of coal-related investments, according to the Norwegian government.  link

February 2016: UK government warns of penalties for divesting. Local authorities have been warned that they will face “severe penalties” if they divest from fossil fuel holdings or boycott oil, coal or gas firms in procurement tenders, the UK government has said. Fossil fuel investment have been branded a “stranded asset” risk by the governor of the Bank of England: Nearly $1bn has been wiped off the value of coal investments by UK public pension funds in the last two years, and institutions across the world representing over $3tn in assets have committed to divest from fossil fuels. link

March 2015: Bank of England warns of huge financial risk from fossil fuel investments. Insurance companies could suffer a “huge hit” if their investments in fossil fuel companies are rendered worthless by action on climate change warned the Bank of England.   link

March 2015: UN backs fossil fuel divestment campaign. In a controversial move, the UN organisation in charge of global climate change negotiations is backing the fast-growing campaign persuading investors to sell off their fossil fuel assets. It said it was lending its “moral authority” to the campaign because it shared the ambition to get a strong deal to tackle global warming at a crunch UN summit in Paris in December.  link

 Miscellaneous investment news briefs

World’s biggest sovereign wealth funds exits coal - link
Oil fortune heirs to divest from fossil fuels
John D. Rockefeller built a vast fortune on oil. Now his heirs are abandoning fossil fuels. link

First health organization in world to divest.
Doctors association in the UK, has voted to end its investments in fossil fuel companies – link

Oxford University urged to divest 3.3bn endowment
. Students and faculty at the 14 colleges that comprise Oxford University have urged the university to purge its 3.3bn endowment fund of all investments in fossil fuel companies.  link
Investors call to end fossil fuel subsidies.
More than 340 institutional investors managing 15 trillion of assets have called for strong policies to drive action on climate change.  link

Investors move from fossil fuels to ethical industries -
University of Edinburgh to divest following student pressure. The decision follows 10-day occupation of finance department by student protesters over initial commitment to put engagement before divestment. link
Stanford will purge coal investments from endowment.

March 2014: The Carbon bubble. The idea of a carbon bubble – meaning that the true costs of CO2 in intensifying climate change are not taken into account in a company's stock market valuation – has been gaining currency in recent years, but this is the first time that MPs have addressed the question head-on. Much of the world's fossil fuel resource will have to be left unburned if the world is to avoid dangerous levels of global warming, the environmental audit committee warned. Stock markets are inflating a "carbon bubble" by overvaluing companies that produce fossil fuels and greenhouse gases, and this poses a serious threat to the economy, an influential committee of UK MPs has warned. Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change said companies had a "fiduciary duty" to their shareholders to move to a low-carbon economy, because of the effects of the carbon bubble. "If corporations continue to invest in new fossil fuels, they are really in blatant breach of their fiduciary duty, as the science [of climate change] is abundantly clear," she said. "Understanding the science, the fact is that we have to move to low-carbon no matter what, with or without policy." link      
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