Fossil fuel divestment movement reaches $2.6 trillion
NEW YORK, USA – A campaign to abandon fossil fuels to boost the fight against climate change has rapidly picked up steam, with institutions worth $2.6 trillion pledging to divest, a study said Tuesday, September 22.
The commitment, made months before a high-stakes United Nations climate meeting in Paris, marks a 50-fold increase from a year ago when the Rockefeller family announced it was divesting from fossil fuels.
The study from consultancy Arabella Advisors found that 436 institutions and 2,040 people worth a total of $2.6 trillion have now pledged to get out of fossil fuels, either entirely or in particular sectors such as coal.
Some of the most notable have been the University of California System and the Norway Pension Fund, which has drawn particular notice as the Scandinavian country – like the Rockefellers – grew wealthy thanks to oil production.
One of the latest, if least surprising, pledges came from the Leonardo DiCaprio Foundation, the environmental charity led by the actor and climate activist.
"Climate change is severely impacting the health of our planet and all of its inhabitants, and we must transition to a clean energy economy that does not rely on fossil fuels, the main driver of this global problem," DiCaprio said in a statement issued as he sat in the audience for the study's release in New York.
The actual amount pulled from fossil fuels was not announced but major investors generally have between three and eight percent exposure to fossil fuels, said Tom Van Dyck of the SRI Wealth Management Group which promotes socially conscious finance. That would mean at least $78 billion has been divested.
Fossil fuels – especially coal, but to a lesser extent oil and gas – contribute to emissions of carbon dioxide that have led to the planet's rising temperatures.
Scientists warn that, if left unchecked, global warming will seriously worsen droughts, floods and other disasters.
Bad for business, too?
UN climate chief Christiana Figueres said that the divestment pledges offered momentum for a year-end conference in Paris that aims to draft a new global agreement to tackle the scourge.
Beyond the moral case, Figueres argued that fossil fuels would increasingly be a bad business choice as opportunities rise for cleaner energy.
"The alternative of business as usual will leave firms and investors locked into hundreds of billions of dollars in stranded fossil fuel assets as emissions are ratcheted downwards and renewable energies win the price parity race," she said.
Profits of major oil companies have plummeted since last year, although industry analysts point to a variety of reasons including high output from Saudi Arabia, the fracking boom in the United States and easing tensions with Iran.
US activists were at the forefront of the divestment movement but the report by Arabella Advisors found that it has spread, especially to Australia, Britain and Canada.
Religious institutions have divested some $24 billion from fossil fuels, said the Reverend Fletcher Harper, executive director of advocacy group GreenFaith.
"For faith communities, the Earth is our home and it is a gift, and we intend to pass it on to our next generations in at least as good condition as we received it," he said.
Religious groups that have decided to divest include the Church of England, the Church of Sweden, the Episcopal Church, the United Church of Christ, the Lutheran World Foundation and the Unitarian Universalist Association.
Minneapolis and Seattle are among cities that plan to divest. Universities include Georgetown, Oxford and Stanford.
A year ago during a similar week of climate events in New York, the Rockefeller family announced that its $860 million philanthropic group was leaving fossil fuels.
The family grew wealthy thanks to Standard Oil, making John D. Rockefeller the world's richest person a century ago. – Shaun Tandon, AFP/Rappler.com