Digging Inro Oil Sands Divestment

The Canada Letter speaks with a Times reporter who has looked into large investors who have turned away from the oil sands.

Another energy story was somewhat lost this week among turmoil from protests over the natural gas pipeline construction in Wet’suwet’en territory in British Columbia. On Wednesday, BlackRock, the world’s largest asset manager, announced one of its fast-growing green-oriented funds would no longer put money into companies that get revenue from the oil sands in Alberta.

The Syncrude Canada plant north of Fort McMurray, Alberta.
Credit…Ben Nelms/Bloomberg

 

My colleague Christopher Flavelle, who follows how people, governments and industries are coping with the effects of global warming, reported on the decision as part of his in-depth look at investors who are divesting oil sands-related holdings.

[Read: Global Financial Giants Swear Off Funding an Especially Dirty Fuel.]

Christopher, by the way, was born and raised in Toronto, obtained a B.A. in political science at McGill University and once worked at The Walrus magazine.

I asked him to expand on some of the points from his article in which the head of a fund at BlackRock describes the oils sands as being “the worst offenders, if you want, from a climate perspective.”

Some of the investors you spoke with said that they are taking their money out of the oil sands for environmental reasons. But is the current oil glut and the prospect of continued low oil prices also influencing their decisions?

I spoke with equity analysts, economists and fund managers for this story, and they all made a version of that point: The recent low rate of return on oil has made it easier for investors to pull out of the oil sands, because it means they’re not sacrificing a lucrative investment. That’s especially true for the oil sands, which have been hurt by the lack of new pipelines that would make it cheaper to get more of that oil to market.

Other people took that argument a step further, predicting that when, or if, oil in general and the oil sands in particular become a more attractive investment, some of the investors who left will come back. And that seems like a valid point: One test of these divestment policies will be whether investors stick to them over time.

Alberta has responded by attempting to embarrass some financial services companies for pulling out of the oil sands and by threatening to no longer do business with them. Has anybody noticed any of that effort outside Alberta or Canada?

The investors and insurance companies that have been the targets of that pressure have certainly noticed. But I couldn’t find evidence that the pressure from Alberta has caused any of those companies to change their policies.

The closest might be HSBC, which seemed to get more attention from Premier Jason Kenney than any other company. HSBC softened the language in its policy statement on the oil sands last year, its spokeswoman told me, removing what she called “the suggestion that our exposure to the oil sands industry would diminish.” But it didn’t shift its pledge to stop funding new oil sands projects.

The bigger question that came up during my reporting is whether lenders that might otherwise want to invest in oil sands projects will decide not to as a result of the Alberta government’s willingness to publicly criticize foreign investors it disagrees with. That’s a much harder question to answer.

Have some oil sands companies made significant progress on reducing carbon emissions, as Alberta’s government has said?

It depends how you define ‘significant.’ Joule Bergerson, a professor in the chemical and petroleum engineering department at the University of Calgary, told me that she’s seen reductions in carbon intensity — the amount of greenhouse gas emitted per unit of energy extracted — in the range of 15 percent to 20 percent.

The companies themselves report having made significant reductions. Cenovus told me in a statement that its greenhouse gas intensity had fallen 30 percent in 15 years. Suncor said in a statement that emissions intensity at its oil sands base plant was down more than 60 percent since 1990.

But Dr. Bergerson added that reductions on the scale we’ve seen so far aren’t necessarily going to change investors’ minds about quitting the oil sands because they still leave most of those projects well above the global average for carbon intensity. As she put it, those companies “are really trying, and putting their money where their mouth is in terms of developing new technologies.” Still, she said, it remains unclear whether they’ll be able to cut emissions enough to persuade other investors not to leave.

How willing were people in the industry and the Canadian financial community to speak with you?

I was surprised by how difficult it was to get Canadian investors and oil sands companies to talk to me. Aside from the Caisse de dépôt et placement du Québec, none of the large pension funds agreed to my requests for interviews. The biggest oil sands companies likewise declined my requests for interviews, though some agreed to respond to written questions.

When I mentioned that to the people I spoke with, many of whom asked not to be identified, the explanation was that nobody wants to be the next one to get targeted by the premier’s office. I would have asked Mr. Kenney about that, but his office declined my request for an interview. SOURCE

RELATED:

OPINION | What’s really holding back the oilsands? It’s not the bill of goods you’re being sold

A Win-Win Climate Solution Awaits

A Win-Win Climate Solution Awaits, Below2C

The year 2019 ended the hottest decade on record by being the year of climate emergency declarations. Globally, “one in ten people now live in a place which has declared a climate emergency,” reports The Verge. Canada declared a climate emergency in June of 2019.

Canada is locked-in to a Fossil-Fuel-Expansion Obsession

In spite of declaring a climate emergency, Prime Minister Trudeau continues to be all-in the for the fossils. Canadian taxpayers bought the Trans Mountain pipeline for $4.5 billion in 2018 and are now footing the bill for an expansion project whose cost estimates have ballooned to $12.6 billion from $7.4 billion. And it gets even worse.

Trudeau is now poised to announce the approval of the Teck Frontier project, a new giant Tar Sands mine—the largest ever—which will dump more than 4 million tonnes of carbon per year into the atmosphere until the 2060s. And yet just a few months ago in Madrid, Canada promised it will be at net-zero-emissions by 2050. This is very agonizing to watch. “They know [Trudeau and his cabinet] — yet they can’t bring themselves to act on the knowledge. Now that is cause for despair,” wrote Bill McKibben in TheGuardian.

Climate Solution? Energy Transition is the Answer

On January 3, 2020, Ottawa-based Abacus Data released a poll titled, “Energy transition: a widely accepted concept; Canadians want governments to work on it, not against it.” The poll shows that “75% say it [transition] is a global trend, beneficial for Canada in the long term. Most feel it is necessary and will happen.”

Yet business-as-usual persists, with most governments slow to announce bold emission control measures, and with some even in denial.

The Trudeau Government, caught in a bind between the fossil fuel economy and the need to transition to renewables, is not acting as quickly as Europe and Asia.

Europe has discovered that shifting a fossil fuel company to renewable energy can be surprisingly simple, because many of the needed technical and management skills are the same.

All of Norwegian oil giant Statoil’s wind energy department, for example, was recruited internally. Little was needed to retrain its engineers. If Statoil moved its offshore wind business into a separate company, it would be one of the 15 largest companies on the Oslo Stock Exchange.

And if the solar division of French oil company Total SA were separated from its parent company, it would be one of the world’s largest solar businesses.

With increasing divestment and the falling demand for oil, transition to ever-cheaper renewables is in the best interests of the industry.  Instead of buying pipelines and giving billions in fossil fuel subsidies to shore up an economically non viable “zombie” industry, Canadian citizens, through their governments, could take a smarter tack.

That is to give the industry government subsidies only on condition that it publish plans to transition to renewables at the rate of 8.5% a year. Compounded, the transition would be complete in 10 years, by 2030.

What about Alberta?

There are 60,000 old oil wells in Alberta with geothermal energy waiting at the bottom. And Southern Alberta and Saskatchewan form the sun belt of Canada, receiving over 2375 hours of sunlight a year. They could switch broadly to free unlimited solar energy, including concentrated solar power, which now serves communities in the US, Spain, Morocco, India and China.

Transforming the energy grid to upload all this power could be modeled loosely on FDR’s depression-based Rural Electrification Administration, still operating, and being copied in other countries.

All this development would stimulate the economy and increase employment.

Further procedural information is available on The Climate Mobilization website, and from daily Twitter reports of exciting worldwide innovations from Canada’s Mike Hudema (@MikeHudema), Stanford’s Mark Z. Jacobson (@mzjacobson), and Singapore’s green energy CEO, Assaad Razzouk (@AssaadRazzouk).

A Win-Win Situation for Climate

A win-win situation awaits us all: it simply requires political will, knowledge of existing solutions, and Canadian savvy and can-do.  We can and must collectively urge our governments to act quickly and dynamically to meet the emergency. SOURCE

 

‘Something Big Is Shifting’: As Georgetown Announces Fossil Fuel Divestment, Students Across US Demand Their Schools Follow Suit

The decision came after 90% of students who voted on a referendum voted in favor of divestment.

The Georgetown University board of directors announced Thursday it would divest from fossil fuels. (Photo: Ehpien/Flickr/cc)

Student-led anti-fossil fuel campaigns at universities across the country pointed to Georgetown University Friday as the school’s board of directors announced it would divest from fossil fuels and redouble its efforts to invest in renewable energy instead.

The university’s decision came after a sustained pressure campaign from Georgetown University Fossil Free (GUFF), a student group which submitted multiple proposals to the Georgetown Committee on Investments and Social Responsibility before the panel recommended the divestment this week. The school community also voted on a referendum regarding divestment on Thursday, withn more than 90% voting in favor.

GUFF issued a statement thanking the board of directors for its decision to divest and the school community for participating in the campaign.

“We are thrilled that our university has taken this important step in supporting climate justice, student voices, and financial accountability,” GUFF wrote.

Similar groups at other schools called on administrators to follow suit: MORE

Church of England Devises an Index for Climate-Conscious Investing

The church’s pension fund will invest 600 million pounds in companies ranked according to their efforts to meet the 2015 Paris agreement.

Royal Dutch Shell has worked closely with the Church of England in developing ambitious targets for reducing its carbon dioxide emissions.

Credit…Toru Hanai/Reuters

Many investors would like to use their money to help tackle climate change, but figuring out how has not always been easy. Now a fund that benefits 38,000 current and retired clergy and other employees of the Church of England could offer a potential solution.

The Church of England Pensions Board, which manages 2.8 billion pounds (or $3.7 billion), this week announced an index that rewards companies working to curb their carbon-dioxide emissions in line with the targets of the 2015 Paris agreement, and bars companies that are perceived as environmental laggards.

The church’s pension board is transferring £600 million to the new index, which it helped design with FTSE Russell, an index provider.

Companies that rate well under a series of metrics developed for the pension fund receive more weight in the index, meaning more of their shares will be purchased, while those that don’t score well will either receive reduced weight or be excluded.

Oil producers are not excluded from the index. Europe’s largest oil company, Royal Dutch Shell, which has worked closely with the Church of England in developing ambitious targets for reducing its carbon dioxide emissions, is included, as is Repsol, the Spanish oil company, which has also announced far-reaching goals.

Exxon Mobil, Chevron and BP, which have been less ambitious according to the index’s metrics, are at this point excluded.

Adam Matthews, the church fund’s director of ethics and engagement and a prominent activist on climate matters, has worked with companies like Shell to set targets for reducing emissions.

Companies face a choice to put “in place targets and strategies aligned to Paris” or “work against the long-term interests of beneficiaries and wider society and be excluded,” he said in a statement.

Exxon and other companies not included in the index could win their way back into the fold by setting appropriate targets, the church fund says.

Large investment firms are showing increasing interest in the risks and rewards of climate and other environmental issues. Enormous sums could potentially be used to influence corporate behavior. Laurence D. Fink, chief executive of BlackRock, which has nearly $7 trillion under management, recently vowed to put sustainability at the core of the firm’s investment approach.

Mr. Matthews is among those investment professionals who say it is incumbent on fund managers to understand the risks that climate change can pose to investors’ portfolios. The earnings and value of oil companies, for example, could plummet if climate-change concerns result in less consumption of these emissions-producing fuels.

Pension managers need to assess the risks of climate change to their investments to ensure they can provide for their beneficiaries in the future, Mr. Matthews said in an interview.

To remain invested in companies without “understanding how they are positioned in climate transition poses a real risk,” he said.

Mr. Matthews acknowledges that it will take time for oil companies to shift their investments away from fossil fuels to clean energy. Along these lines, he has helped set up a unit at the London School of Economics called the Transition Pathway Initiative. The initiative evaluates oil companies and other large emitters of carbon, such as steel producers and electric utilities, on the basis of their commitments to reduce their carbon output and the quality of their strategies for doing so.

The Church of England’s new index, which is currently for institutional investors, is trying to use the London School of Economics data to give investors exposure to companies that are positioned to perform well in the future on climate matters. Earlier generations of indexes relied on static information like fossil fuel reserves or emissions measurements.

“You have got forward-looking information, and that is quite groundbreaking,” said Faith Ward, chief responsible investment officer for the Brunel Pension Partnership, which manages around £30 billion for British government agencies and municipalities. SOURCE

 

How Much of Harvard’s $40 Billion Endowment Is Invested in Fossil Fuels?

Canadians should ask, “How much of your CPP is invested in fossil fuels?”  The Canadian Pension Plan and the CPP  Investment Board control $377 Billion in investments. Canadian banks and pensions promise climate action in wake of BlackRock divestment. The CPP has increased its renewable-energy investments a hundredfold since 2016. But how much has it divested?

It’s not all that important. Any amount is too much.

 

Credit…Nicholas Konrad

In my senior year at Harvard, I was invited to a dinner in honor of the writer Margaret Atwood, the recipient of the 2014 Harvard Arts Medal. On my way out the door I lingered, shrugged on my coat, took a deep breath and walked up to the university’s president at the time, Drew Gilpin Faust. We had met twice: once during her office hours and at an ice cream social.

“Please divest from fossil fuels,” I said, hoping to catch her off guard.

The president, at first seemingly happy to see me, rearranged her face. Her shoulders crept up toward her ears.

“You students don’t understand investments,” she said. Then she walked out of the room.

I have benefited immeasurably from Harvard’s investments in me. But recognizing where some of Harvard’s $40 billion endowment is invested was a cause of growing unease for me and some of my classmates. Students at other campuses were similarly concerned about the endowments of their schools.

Figuring out exactly how much of Harvard’s endowment is invested in oil, gas and coal companies is a near-impossible task. Harvard is required to disclose only direct investments in which the university owns shares of a specific company.

Harvard says its direct investments amounted to $394 million as of May 2019, or roughly 1 percent of the endowment total. Divest Harvard, a student group, determined that of that approximate amount, $5.6 million was invested in companies that produce or own reserves of oil, natural gas and coal, and large electric utilities powered by natural gas and coal.

Harvard doesn’t comment on its individual investments. But in 2015, the South Pole Group, a carbon finance consultant in Zurich, analyzed $989 million of Harvard’s then $36.4 billion endowment at the request of Divest Harvard and 350.org. Based on those investments, the group estimated that the overall endowment was responsible for annual emissions of 11 million tons of carbon dioxide, roughly equivalent to the annual emissions from Delaware.

It’s easy to get bogged down in the numbers, but the exact amount of Harvard’s fossil fuel investments or the emissions it is responsible for isn’t all that important. As the world faces a climate crisis, any amount of investment in companies that extract or burn fossil fuels is too much, especially by one of the world’s leading universities.

Lawrence Bacow, the university’s current president, explained in the Harvard Gazette last fall that rather than divest, the university believes that “engaging with industry to confront the challenge of climate change is ultimately a sounder and more effective approach for our university.”

But many students have not been content with that approach.

As part of a divestment campaign, in May 2014 an undergraduate, Brett Roche, was arrested by Harvard University police for blocking an entrance to Massachusetts Hall, where President Faust and members of the administration had their offices. In April 2015, during Harvard Heat Week, students, faculty, alumni and community members blockaded President Faust’s office once more. Last November, at the Harvard-Yale football game, climate change protesters stormed the field at half time, delaying the game for roughly an hour. To date, 532 faculty members have signed a petition in favor of divestment from fossil fuels.Everything You Think You Know About Housing Is Probably Wrong

The result? Nothing has happened.
Other campuses have had more luck. After pressure from student groups, Stanford announced in 2014 that it would not make direct investments in publicly traded companies whose principal business is coal mining. The University of Maine followed suit in 2015, divesting all direct holdings from coal companies. In 2017, Columbia University announced divestment from producers of coal burned to generate electricity.

 

Other schools have taken additional steps, divesting not only from coal producers, but also from oil and gas companies. These include Sterling College in 2013; the University of HawaiiUniversity of DaytonSyracuse University and the Rhode Island School of Design in 2015; and the University of Oregon in 2016. The University of California system announced last September that it would divest $13 billion of its $83 billion endowment and $70 billion of pensions from fossil fuel producers.

Recognizing that student activism hasn’t worked on its own, two Harvard College alumni from the class of 2018, Danielle Strasburger and Nathán Goldberg started thinking about the Harvard Board of Overseers election. Last year, they founded Harvard Forward, an alumni-run organization that aims to elect five recently graduated candidates to the board. The Board of Overseers mostly advises the university on strategic decisions, though it does have the power to consent to the election of members to the Harvard Corporation.

The average age of the five candidates is 28 — the same number of years that, on average, have passed since the current overseers were Harvard students. Their platform includes: “Complete and swift divestment of all university assets from fossil fuels.”

The board is composed of 30 Harvard alumni who sit for six-year terms. Each year in April, five new members are voted in by alumni. A nomination committee of the Harvard Alumni Association generally chooses eight candidates who will be added to the slate.

There’s another way in, though — though a petition process. To qualify, each candidate needs 2,936 signed nomination forms, equivalent to 1 percent of eligible voters (living Harvard alumni, with the exception of current professors, administrators and staff).

The first test will come on Feb. 1, the deadline to qualify for the ballot. When we spoke last week, Ms. Strasburger estimated that between 2,300 and 2,400 nomination forms had already been signed in favor of each candidate. They are nearly there.

This is not just about Harvard. And it’s also not just about whether you think divestment is a strategy that is worth pursuing, or whether it has an impact.

Rather, Harvard Forward is a model for building power by young people — of breaking the logjam within large institutions and making change happen.

This approach is not new. From 1985 to 1991, Harvard and Radcliffe Alumni/ae Against Apartheid campaigned for Harvard to divest its stock in companies operating in South Africa. The organization used the same nominate-by-petition system to elect four members to the board, including Archbishop Desmond Tutu, who stated that he would return his honorary degree unless Harvard divested entirely from South Africa. By the 1980s, Harvard did.

Younger alumni realized then that they needed a seat at the decision making table to create change. That is exactly what Harvard Forward is seeking.

On Jan. 15, Harvard Global Networking Night, over 100 volunteers for Harvard Forward — many of them alumni from the 1960s, ’70s and ’80s — attended 50 alumni events in 20 states and 20 countries with petitions in hand. That night alone, they gathered over 1,000 signatures.

Alumni can submit petitions to nominate the younger slate of candidates until the deadline on Saturday at 5 p.m. Harvard Forward has volunteers in 35 cities to collect forms at signature parties this week.

“A lot of people want to know how they can make an impact when it comes to climate,” Ms. Strasburger told me. “If you have a chance to influence a $40 billion endowment, that’s a pretty big deal.”

EDITORIAL: Investing in humanity — The BMJ’s divestment campaign

Health professionals and medical organisations must act now

How do we restore hope for humanity? Many of us feel despair at a disintegrating political consensus to save our planet from fire, flood, disease, and conflict. We feel trapped in our high carbon lives and disempowered by commercial influence of companies whose products damage the planet and people’s wellbeing.

Evidence for the effects of the politico-commercial complex is clear and alarming.1 On our current trajectory we will miss carbon emission targets and sustainable development goals, both agreed by international consensus.2 Populist politicians rubbish science confirming the harmful effects of climate change. Big business obfuscates, distorts, and denies evidence for the adverse effects of its products. When future historians, if such a future exists, look back on our stewardship of Planet Earth, what will be their judgment? That we allowed politics and profits to harm our home planet and ourselves?

Health professionals and medical organisations should not accept the world as it is. This is not a matter of playing party politics or anticorporate posturing. Taking action is a duty to the people we serve and to future generations. And we can act: by divesting from health harming industries. Divestment offers health professionals and medical organisations, for the duty is both individual and collective, an opportunity to influence politicians and industry towards behaviours that are better for the planet and people’s health (box 1).

What do we mean by divestment for health?

Divestment is the opposite of investment. It is the reduction or, as in this case, the complete removal of stocks, bonds, or investment funds that are unethical because of the harm to health.

The case for divestment from the tobacco industry is established. Tobacco products are harmful, and the industry’s history of manipulating science on the effects of tobacco smoke is well described.3The BMJ is a long standing opponent of the tobacco industry. We published a landmark study by Richard Doll showing a causal relation between tobacco smoke and lung cancer.4 We do not accept advertising or research funded by the tobacco industry in any of our journals.5

Fossil fuels

In a previous BMJ editorial, Law and colleagues argued that the case for divestment from fossil fuels is now clear cut.6 Extraction of fossil fuels damages our planet. Products of the fossil fuel industry harm health, causing global conflict, driving climate change through carbon emissions, and shortening lives through air pollution. Yet politicians refuse to relinquish their political and commercial links to fossil fuels, and fossil fuel companies manipulate science to downplay the ill effects of their business. This allows us all to continue the convenient fantasy that all is well with the way we live.

Consuming our planet’s fossil fuel reserves will ensure we miss carbon emission targets. Although the industry shows little sign of changing its strategy, the financial world is waking up to the threat to investments as well as to the planet. The governor of the Bank of England considers fossil fuels a risky investment because the demands of meeting the 2°C climate target will render the majority of oil, gas, and coal reserves “stranded” and “unburnable.”7 In 2017, at the One Planet Summit in Paris, the World Bank announced its intention to end financial support for oil and gas extraction in response to the threat posed by climate change.8 Recently, the European Investment Bank, the European Union’s lending arm and the world’s largest multilateral financial institution, stated its ambition to become the world’s first “climate bank” by ending its multibillion euro financing of oil, gas, and coal projects after 2021.9

With this editorial, we launch a campaign for divestment from fossil fuels. Our campaign is aimed at health professionals and medical organisations, since divestment is one way of exerting influence on politicians and industry on behalf of our patients and the public. An immediate objective of the campaign is to gain commitments from health professionals and medical organisations to divest from fossil fuel industries. Our long term ambition is that those commitments will be acted on in order to influence politicians and industry. Investment is a choice, and it is now easier to identify sustainable and ethically sound investments that will benefit rather than harm health.10 None of this lessens the responsibility of individuals and organisations to limit their own effect on climate. You will find more on our green journey at www.bmj.com/about-bmj/how-green-is-the-bmj.

The BMJ applauds organisations such as the Royal College of Physicians, the Royal College of General Practitioners, the Royal Australasian College of Physicians, the medical associations of America and Canada, and the BMA, our owner, for committing to divest from fossil fuels. For our part, we will not accept advertising or research funded by companies that produce fossil fuels. We will also explore how else our business might be dependent on fossil fuel companies and take steps to end any such reliance. The BMA has no direct holdings in tobacco or fossil fuel companies.

Our new policy towards the fossil fuel industry may seem a minor concession since we receive little or no revenue from this sector. But as our online usage grows rapidly to an increasingly diverse international audience we expect The BMJ will become a more attractive route to market for companies beyond our traditional pool of advertisers. We are clear that income from companies that produce fossil fuels is revenue that The BMJ does not want now or in the future.

Most importantly, we seek your commitment and invite you to sign our online declaration of intent to divest from fossil fuels (https://bit.ly/bmjdivestment) We urge you to follow up your commitment by implementing divestment in your personal finances and in the medical organisations that you belong to. We urge medical organisations to join us in taking a lead to create better health through divestment. We will allow medical organisations to record when they have successfully implemented divestment. Often, individuals and organisations are motivated to divest but don’t know how. In collaboration with the UK Health Alliance on Climate Change (which the BMA and BMJ help to fund) we offer guidance to help you successfully divest (box 2).11

Divesting your health organisation

Why should you?

Consider the environmental, health, and economic benefits. Fossil fuels are an increasingly risky investment and fossil fuel free indexes equalled or outperformed unsustainable alternatives for 5-10 years. To “do no harm,” health organisations must challenge damaging activities and not profit from them.

What does your portfolio look like now?

Before deciding on your divestment approach it’s important to understand the carbon footprint of your portfolio. Use tools such as the Montreal Pledge website to do so.

Freeze harmful investments now

We can’t afford to delay action to mitigate climate change. Start now by making no new investments and set a time limit to fully withdraw from the sector. Be transparent about your progress.

How to start the journey

There are many divestment approaches, and your organisation must consider its own inclusion and exclusion criteria and the milestones. Ask your fund manager about fossil fuel free indexes (including from FTSE and MSCI) and consider schemes such as the Transition Pathway Initiative. Engaging with companies whose business model relies on fuel extraction is of limited use—only divestment will stop extraction

Redirect your investment to industries that mitigate climate change and promote planetary health, such as renewables.

For full information visit UK Health Alliance on Climate Change website (ukhealthalliance.org/divestment)

RETURN TO TEXT

Next steps

We will consider what else to add to the divestment list. Other industries, however, may be more complex in terms of making a case for divestment. For example, how do we tackle the food and drink industries, many of whose products are beneficial to health but others contribute to the global crisis of non-communicable diseases as well as driving climate change? Even beneficial products can be harmful in excess and damaging to the environment. Workable criteria will help decide which other industries should join tobacco and fossil fuels as targets for divestment. We propose possible criteria in box 3. We welcome your views on these criteria and on our fossil fuel divestment campaign overall.

Possible criteria for divestment from an industry

  • Harm caused by the industry, either in the creation or use of its product(s), clearly outweighs the benefits

  • Industry manipulates the science to hide harmful effects

  • The industry is not essential for our existence or an alternative industry is available or can be developed

Hope is not yet abandoned in our world today; it is merely besieged. Divestment offers us an opportunity to end despair and disempowerment, to begin to reclaim our world from misguided political and commercial agendas. By divesting now we wish to restore hope for the future wellbeing of our planet and for human health. SOURCE

Why the Climate Movement’s Next Big Target Is Wall Street

Photo: Getty

Climate activists are taking on a new pipeline: The one that funnels money from Wall Street into planetary destruction.

A coalition of climate, environmental, youth, and indigenous organizations unveiled Stop the Money Pipeline, a campaign to “pressure banks, insurance companies and asset managers to stop financing fossil fuels and deforestation and start respecting human rights and Indigenous sovereignty,” late last week.

Banks, asset managers, and insurance companies may seem like less obvious targets than going directly after, say, oil and gas companies or the Trump administration. But Wall Street plays an essential role in the fossil fuel industry’s expansion. Staunching the flow of money could be an effective way to prevent more oil, gas, and coal from being dug up, which is exactly what has to happen (and then some) to avoid catastrophic climate change.

Though many banking institutions have branded themselves as green, the world’s top 33 largest banks collectively provided $1.9 trillion in financing for coal, oil, and gas companies since countries put forth the Paris Climate Agreement in 2015.

“There are only a few major companies like Exxon Mobil, who can self-finance a project and put up all the money themselves,” Jamie Henn, 350.org co-founder, told Earther.

And even oil majors like Exxon rely on capital from investment firms like BlackRock and insurance from companies like Liberty Mutual (that have also both adopted green branding), said Henn. “If we can knock out this pillar of financing for the fossil fuel industry, we can take out the entire industry itself,” he said.

There’s precedent for successful public pressure campaigns going after money that finances fossil fuel exploitation. The divestment movement led by 350.org has seen colleges and universities, cities, religious institutions, and pension funds to withdraw their investments from fossil fuel corporations. The climate divestment movement itself is modeled after the successful efforts to divest from apartheid South Africa in the 1970s and 1980s.

“When we launched that campaign, we were actually saying, ‘we’re not really looking to make a financial impact,’ we want to make a political impact with this work,” he said. “What surprised us is how much of a financial impact it actually made.”

In late 2018, the movement hit a milestone with 1,000 groups agreeing to divest from fossil fuels. The number has since risen to nearly 1,160 groups managing $12 trillion (though not all of it is in fossil fuels).

Henn said he realized the financial potential of the movement in 2016, when Peabody, the world’s biggest coal company, announced it was going bankrupt and listed divestment as one of the reasons why. A 2018 Goldman Sachs report shows it’s not just Peabody, noting that the “divestment movement has been a key driver of the coal sector’s 60% de-rating over the past five years.”

There are other recent successes beyond divestment as well. Due at least in part to public pressure, Goldman Sachs became the first major U.S. bank to stop funding oil drilling in the Arctic National Wildlife Refuge last month. An in July, Chubb announced it will be the first U.S. insurer to phase out its coal investments and insurance policies within the next three years. The four largest European insurance firms no longer cover coal power-related projects.

“So what we’re doing now is sort of taking this to the next level and going to the banks and insurance [companies] and the asset managers themselves,” said Henn, “to demand that they take action… against all fossil fuels.”

That action can’t come soon enough. The United Nations’ (UN) recent Production Gap Report shows that within a decade, planned fossil fuel production will “more than double what’s allowable to avoid 1.5 degrees Celsius of global warming.” This year’s UN climate talks in November will also focus specifically on the role of finance in furthering the climate crisis. By that time, the campaign hopes to see firm commitments from banks and insurers to not finance projects that worsen climate change, and to instead fund renewable energy and reforestation.

The organizations running the campaign—which launched at the last Fire Drill Friday protest hosted by Jane Fonda in Washington, DC—have identified three initial primary targets. One, JPMorgan Chase, is the top global financer of fossil fuels. It has poured $196 billion in financing to fossil fuel companies since 2016, roughly 10 percent of all fossil fuel financing from major global banks. And Lee Raymond, Exxon’s former CEO, is on their board. Despite such a seemingly large investment in fossil fuels, shifting away from financing projects wouldn’t kill Chase. Janet Redman, Greenpeace’s climate campaign director, told Earther that fossil fuels roughly seven percent of Chase’s business.

“So while that is an incredible amount of money and it means a lot to the planet,” she said, “some of these institutions can make small shifts in their portfolio—really less than 10 percent effectiveness—and accomplish a lot for the planet.”

Another, Liberty Mutual, is a top insurer of and investor in energy mega-projects like the Trans Mountain pipeline. The company invests over $8.9 billion in fossil fuel companies and utilities. They’ve also withdrawn coverage from and increased the costs of insurance for longtime customers in areas at risk of climate change impacts, such as wildfire-affected areas in California.

And then there’s BlackRock, the world’s largest asset management firm with nearly $7 trillion in assets worldwide. It’s also the largest investor in commodities linked to fossil fuels and deforestation. BlackRock CEO Larry Fink frequently calls on corporations to take on a “social purpose.” But his company is the world’s top investor in public oil, gas and coal companies, and is among the world’s top shareholders in companies that deforest the Amazon to produce and trade soy, beef, palm oil, pulp and paper, rubber and timber.

Stopping these investments would not only be good for the climate, but also for indigenous communities and other vulnerable people worldwide. The Liberty Mutual-backed Trans Mountain pipeline, for instance is routed through First Nations territories. And deforestation in the Amazon, such as that undertaken by BlackRock’s clients, has caused a human rights emergency for indigenous people. Those human rights violations are not only ethically unconscionable, but they could also leave investors open to legal action down the road.

Last Thursday, BlackRock announced that it’s joining the Climate Action 100+, a group of investors that manage assets worth over $35 trillion worth, which pressures the world’s biggest polluters to show how they will reduce their greenhouse gas emissions.

In the coming months, the Stop the Money Pipeline campaign will demand each of these targets divest from coal, oil, gas, and deforestation, while pressuring the federal government to strictly regulate the energy industry. Next Thursday, the campaign will be targeting Wells Fargo in Washington, DC for their fossil fuel finance and human rights violations, and on February 13, they’ll hold a nationwide day of action targeting college campuses and state pension funds urging divestment from fossil fuels.

They might not have to wait long to see results. After Blackrock’s shift last week, the firm’s CEO said in his annual letter that the world is “on the edge of a fundamental reshaping of finance,” and announced that the company will no longer invest in thermal coal.

But the firm and others have a lot of work left to do, so activists will be reminding them of that in the coming weeks. SOURCE
RELATED:

FOSSILS BRACE FOR SCRUTINY AS CARNEY WARNS HALF OF WORLD OIL RESERVES COULD BECOME WORTHLESS

sundem/Pixabay

Canadian fossils ended the year bracing themselves for closer scrutiny after departing Bank of England Governor Mark Carney declared that half of the world’s oil and gas reserves could become stranded assets, leaving millions of peoples’ investments “worthless”.

Appearing on a guest segment of the BBC’s Today program guest edited by #FridaysforFuture founder Greta Thunberg, Carney said the financial sector is “not moving fast enough” to divest from fossil fuels, and has not yet woken up to the looming crisis it faces, The Independent reports.

Carney, who previously served as governor of the Bank of Canada, is set to become the UN special envoy for climate action and finance in February.

In the interview, Carney was asked whether pension funds should dump their fossil holdings even if their returns are looking good at the moment, The Independent says. “Well, that hasn’t been the case, but they could make that argument,” he replied. “They need to make the argument—to be clear about why is that going to be the case if a substantial proportion of those assets are going to be worthless.”

Carney added that, “if we were to burn all those oil and gases, there’s no way we would meet carbon budgets. Up to 80% of coal assets will be stranded, [and] up to half of developed oil reserves.”

Which means financial firms “have to make the judgment and justify to the people whose money it ultimately is” in relation to divestment, he told BBC. “A question for every company, every financial institution, every asset manager, pension fund, or insurer—what’s your plan?”

Carney’s comments raised concern among Canadian fossil companies that his call for “further climate disclosures and climate risk assessments from global banks could increase scrutiny of investments in the Canadian oilsands and nascent liquefied natural gas sector,” the Financial Post writes. With the world’s third-largest oil reserves, “the Canadian oil and gas industry has long been at the centre of the debate about financial institutions and climate change, thanks in part to major European banks such as HSBC Plc and BNP Paribas announcing they would not invest in new projects in the oilsands. Large pension funds in Europe and North America have also signalled plans to divest their holdings in heavy oil companies—moves which have hurt the Calgary oilpatch.” MORE

 

 

Climate Movement Takes Aim at Wall Street, Because ‘Money Is Only Language Fossil Fuel Industry Speaks

“Stop the Money Pipeline” campaign demands that banks, insurers, and asset managers cut ties with planet-destroying companies.

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Stop the Money Pipeline, a new campaign from climate activists, aims to convince Wall Street to stop financing the fossil fuel industry. (Image: Stop the Money Pipeline)

Climate activists on Thursday announced a new campaign that aims to send a message to Wall Street: “Stop financing fossil fuels and deforestation and start respecting human rights and Indigenous sovereignty.”

“Money is the only language that the fossil fuel industry speaks.” —Ka Hswa Wa, EarthRights International

Organized by a coalition of climate, youth, and Indigenous groups, Stop the Money Pipeline will officially launch Friday at the final event in a weekly civil disobedience series that actor and activist Jane Fonda kicked off in October called Fire Drill Fridays.

Several vocal climate campaigners plan to join Fonda at the Friday launch, including celebrities Martin Sheen and Joaquin Phoenix, Indigenous leaders Tara Houska and Eriel Deranger, Greenpeace USA executive director Annie Leonard, and authors and activists Naomi Klein and Bill McKibben.

— Fire Drill Fridays (@FireDrillFriday)

Join the #FireDrillFriday 🔥 teach-in on Thursday with @Janefonda, @greenpeaceusa‘s @AnnieMLeonard, @350‘s @billmckibben, & @Indigenous_ca‘s @erieltd.

This will be the last teach-in before Jane returns to LA.

Tune in at 7pm ET: https://t.co/qX7b5UYr1x

Art by Sarah Epperson pic.twitter.com/wqPYR1rLT3

Artwork for Fire Drill Friday's Thursday teach-in hosted by Jane Fonda

January 8, 2020

Like previous weeks, before the Friday rally and protest there will be a Thursday night livestreamed teach-in, which will feature Deranger, Leonard, and McKibben.

McKibben co-founded the global environmental advocacy group 350.org, which announced Stop the Money Pipeline in a joint statement from organizers Thursday.

“A chorus of high profile voices—including scientists, the United Nations, European central banks, and the IMF—have all sounded the alarm about the role of the finance industry in driving climate destruction, but so far their calls for action have fallen on deaf ears,” the statement said. “The Stop the Money Pipeline mobilization will bring together a number of existing campaigns targeting the worst offenders in each part of the financial sector.”

“We cannot solve the climate crisis until banks and insurance companies step up and stop financing environmental destruction.”
—Liz Butler, Friends of the Earth U.S.

Liz Butler, vice president of organizing and strategic alliances at Friends of the Earth U.S., explained that “climate chaos is already decimating the world, from worsening wildfires to widespread flooding and devastating droughts. Wall Street banks and insurance companies are fueling this crisis by pumping billions of dollars into fossil fuel projects that destroy local communities and our environment.”

“We cannot solve the climate crisis until banks and insurance companies step up and stop financing environmental destruction. They must slash their financing for fossil fuel projects and end the abuses of frontline communities worldwide,” Butler added.

Carroll Muffett, president at the Center for International Environmental Law (CIEL), highlighted some conditions frontline communities currently face and the ongoing legal actions that aim to hold polluters financially liable for wrecking the planet.

“With Australia burning and Jakarta underwater, the science is clear that every new investment in fossil fuels is committing the world to climate chaos and human rights violations on a massive scale,” he said. “Fossil fuel producers are already being held accountable in courtrooms around the world. The financial sector should take note, take action or take cover.”

Other group involved in Stop the Money Pipeline include Rainforest Action Network (RAN), Sierra Club, Greenpeace USA, Sunrise Project, Future Coalition, Divest Ed, Divest-Invest, Native Movement, Giniw Collective, Transition U.S., Oil Change International, 350 Seattle, EarthRights International, Union of Concerned Scientists, Majority Action, The YEARS Project, and Amazon Watch.

While the campaign’s broad demand is that “banks, asset managers, and insurance companies stop funding, insuring, and investing in climate destruction,” the advocacy organizations have identified three primary and initial targets: JPMorgan Chase, BlackRock, and Liberty Mutual.

top targets

 

“As the world’s largest investor in fossil fuel companies, BlackRock is effectively financing disinformation campaigns that have delayed climate action for decades,” declared Kathy Mulvey, a campaign director at the Union of Concerned Scientists. “Investors need to expect more and tolerate less from fossil fuel companies—and tell them to swiftly get on board with climate action, or get out of the way.”

BlackRock announced Thursday that it is joining the Climate Action 100+ investor initiative. Members of the BlackRock’s Big Problem network responded by calling the move a “first step in the right direction” and urging the firm to “go beyond words and actually make meaningful changes to the way it wields its power.”

According to the tenth annual Fossil Fuel Finance Report Cardreleased in March 2019 by RAN and other groups, 33 global banks have collectively poured at least $1.9 trillion into the fossil fuel industry since world leaders adopted the Paris climate agreement in December 2015. The report card identified Chase as the bank that gave the most to coal, gas, and oil companies from 2016 to 2018.

“Our government won’t move on climate so we have to move our money. The fossil fuel industry can’t survive without its friends on Wall Street.”—Clara Vondrich, Divest-Invest

“Banks around the globe are betting against our future with every dollar they invest in fossil fuels,” Greenpeace USA climate campaign director Janet Redman said Thursday. “Money is the oxygen on which the climate crisis burns—and we need everyone to care where their money is being spent.”

As EarthRights International executive director Ka Hswa Wa put it: “Money is the only language that the fossil fuel industry speaks. For decades, the industry’s game has been to pursue profit recklessly while shifting the costs onto local communities. Today, we have come together to announce that the rules of the game have changed and fossil fuel companies will be held accountable.”

Organizers see Stop the Money Pipeline as the next phase of the global movement fighting for divestment from fossil fuels and investment in renewable energy, which has secured commitments from over 1,150 institutions with more than $12 trillion in total assets, according to a real-time tracker from 350.org’s Fossil Free project.

“The international movement calling for divestment from dirty fossil fuels is only growing louder and stronger, and major financial institutions should take note,” said Lena Moffitt, senior director of the Sierra Club’s Our Wild America campaign. “It’s time for them to stop pouring money into the projects that are driving the climate crisis and commit to investing in a future that benefits our communities, our economies, our health, and our planet.”

Divest-Invest director Clara Vondrich emphasized the added importance of pressuring major financial players to take action to address the climate emergency given that global governments continue to drag their feet.

“Our government won’t move on climate so we have to move our money. The fossil fuel industry can’t survive without its friends on Wall Street,” Vondrich said. “Without loans, insurance and investment, Big Oil dries up. Money talks, and we can walk. Wall Street caused the financial crash. We won’t let it cause the climate crash.” SOURCE

Canada Pension Plan investments rely on oil and gas companies overshooting climate targets, new report reveals

The investment board responsible for managing a staggering $400 billion in Canadian pensions contains directors of oil and gas companies and may be putting the financial future of public investments at risk in a carbon-constrained future

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Photo: WORKSITE Ltd. / Unsplash

he Canada Pension Plan Investment Board (CPPIB) has more than $4 billion invested in the top 200 publicly traded oil, gas and coal companies, according to a newly released report.

The report by the Corporate Mapping Project and the B.C. office of the Canadian Centre for Policy Alternatives looks at whether the investment board considers global warming when investing Canadians’ pension money.

The answer is a resounding “no,” said University of Victoria School of Environmental Studies associate professor James Rowe, one of the report authors and a co-investigator with the Corporate Mapping Project.

“As one of the largest investors in the country, they have a significant role to play in facilitating the needed energy transition and our report shows, unfortunately, they are not fulfilling that role at the moment,” Rowe told The Narwhal.

In order to stay within the 1.5 degree increase in global average temperature — committed to by Canada and  194 other countries in the 2016 Paris Agreement — fossil fuel extraction must be severely limited. But companies with Canada Pension Plan investments have reserves that, if extracted, would send emissions soaring.

“To stay within 1.5 degrees, these companies can extract only 71 billion tonnes of carbon dioxide, yet the companies the CPPIB is invested in have 281 billion tonnes in reserve, meaning they have almost four times the carbon reserves that can be sold and ultimately burned to stay within 1.5 degrees,” Rowe said.

Reserves are factored into company valuation, which means the board has invested billions of dollars in companies whose financial worth depends on overshooting their carbon budget, the report says.

Many of the investments are in coal companies — even though the Canadian government has acknowledged that phasing out coal is one of the most important steps in tackling climate change and meeting the Paris Agreement targets.

The Canadian Pension Plan Investment Board manages about $400 billion in investments, making it one of Canada’s largest investment pools.

Oil and gas companies face coming devaluation

Those looking forward to collecting their pension shouldworry about the risk of stranded assets as the world transitions to renewable energy and financial institutions worldwide divest themselves of fossil fuel investments, says the report, which notes the pension’s total investment in fossil fuel companies is considerably larger than the documented $4 billion. The exact amount cannot be estimated due to limited disclosure rules.

“Our worry is that Canadians, who rely on these funds for part of our retirement, are going to be affected by stranded asset risks,” Rowe said.

“Oil and gas companies are facing a significant devaluation in the coming years and so it makes sense to move out now rather than later, which is what we see other institutions doing, but the CPP has not,” he said.

The European Union recently passed a law requiring pension funds to factor climate risk in investment decisions and Norway and California have passed similar laws. The European Investment Bank, the largest multilateral lender in the world, has announced it will no longer be investing in fossil fuel projects after 2021.

Steph Glanzmann, one of the report’s authors and a recent University of British Columbia forestry graduate, said investments in the industry will no longer be profitable

as a new generation shifts away from fossil fuels.

“This is a moral and ecological failure and also a financial risk,” she said.

Investment board should disclose risk

The report recommends that the investment board carry out a portfolio-wide risk analysis and disclose the findings and that the fund should move towards fossil fuel divestment and reinvesting capital into renewable energy. It also calls on the Canadian government to require all public pension plans to fully disclose their fossil fuel holdings.

Many CPP investments are in the biggest companies working in the Alberta oil sands, which produces high-cost, carbon-intensive bitumen. The Alberta energy industry is working to convince investors that its oil and gas is produced sustainably as it scrambles to deal with an estimated $30 billion divested in the last three years, including Sweden’s central bank, which has said it will no longer invest in projects with large climate footprints.

The report found that most divestments are from countries that do not produce oil and gas and suggests that one reason Canada is slow to react could be because its oil and gas industry is so powerful.

“As we noted in the report, a number of board members of CPP are also board members of oil and gas companies and so the interests of fossil fuel companies are influencing the decision making at the CPP and that is dangerous for Canadian pensioners,” Rowe said.

Having these directors at the investment board table means the self-interest of companies contradicts the changes investors and governments need to make to address climate change, said Zoe Yunker, an author of the report and a research assistant with the Corporate Mapping Project.

“In Canada, the fossil fuel sector has been very successful at getting a seat at government decision-making tables, both provincially and federally and CPPIB board directors and staff are entangled with the oil and gas industry,” Yunker said.

The board’s mandate is to maximise long-term investment returns without undue risk, but the report looks at whether a failure to look at long-term climate change will mean heavy economic costs for future generations and whether it could make the organization vulnerable to a class action lawsuit brought on behalf of young Canadians.

A spokesperson with the investment board told The Narwhal via email, “CPPIB has an ongoing goal to be a leader in understanding the risks and opportunities presented by climate change. The energy transition is underway and as a long-term investor, we are mindful of these energy shifts and our portfolio reflects this.”

Notably, the organization recently made a $2.63 billion purchase of wind-farm operator Pattern Energy and a November board report says investments in renewable energy companies more than doubled to $3 billion up to June this year, up from $30 million in 2016.

CEO Mark Machin, in an interview with BNN Bloomberg earlier this month, said both renewable and traditional energy are appropriate for the fund’s portfolio.

“We will look at traditional oil and gas, whether it’s pipelines or other resources,” he told Bloomberg.

“As long as we can understand all the risks behind the investment, that the regulation may change, that preference may change, that geography may change. If we can understand those and can still be compensated sufficiently, then we’ll continue to make that investment.” SOURCE