Investors Fight Back Against Climate Wreckers

Investors Fight Back Against Climate Wreckers

Change is happening in the economy – and it’s gathering pace. Image: By Markus Spiske on Unsplash

Investors are using their shareholdings to force polluting companies to change their ways and cut carbon emissions.

Two strands of action are being taken by investors against the planet’s biggest and most polluting companies to try to coerce them into complying with climate targets.

One group, known as the divest/invest movement, and including forty of the world’s largest cities, is acting on ethical grounds, simply selling members’ shares in polluters and investing in green alternatives.

Members of the second group are hanging on to their profitable holdings but attempting to use their financial clout to persuade companies to stop killing the planet.

The first group began in 2012, basing themselves on the principles so successful in achieving divestment in South Africa during the apartheid era, which Nelson Mandela acknowledged put great pressure on the regime. DivestInvest says the number of organisations involved has grown to 1,101, which between them promise to withdraw US$8.8 trillion (£6.7tn) from fossil fuel companies.

It is a diverse group of organisations from 48 countries including banks, insurance companies, trade union and other pension funds, universities, cultural organisations and local authorities, which are unloading their shares in oil companies and other heavy polluters that profit while making little effort to curb their contribution to climate change.

Seeking maximum return

The second group, Climate Action 100+, represents more than 370 investors with over $35tn in assets. Many of these “investors” are managed funds held on behalf of thousands of individual shareholders who expect maximum return on their investments.

The managers of these funds say this duty to their investors means it is difficult to sell off shares in profitable companies, so the sensible option is to get the companies to reform.

They think this is also in the best interests of their funds, because climate change is a long-term threat to companies’ financial health and therefore to their investments. So, the argument runs, persuading polluters to change their ways to protect the planet is in everyone’s interest.

Both groups are claiming success. The trump card for the first group is that they believe fossil fuel companies, particularly coal and oil producers, will have to leave most of their “reserves” in the ground if the planet is not to heat by more than 2°C above pre-industrial levels, the internationally agreed limit.

The group argues that when the big oil companies like Shell, BP and Exxon count these reserves as assets they are deluding themselves and their shareholders, and the true worth of their companies is far less than they claim. DivestInvest calls them stranded assets.

“We are now at a tipping point. A significant number of companies have made bold commitments to achieve net zero emissions”

There is already strong evidence that this argument is having an effect on coal companies, with a string of bankruptcies in the US because sales have slumped as the power stations they supply have been unable to compete.

The movement cites some influential backers. “The fossil fuel industry is set to lose $33tn in revenues by 2040, including $27.9tn in oil and gas alone,” says Mark Lewis, global head of sustainability research at BNP Paribas Asset Management.

Sarah Butler-Sloss, founder director of Ashden, which supports sustainable energy enterprises worldwide, says: “Through DivestInvest, you can avoid the risks facing the fossil fuel sector, limit the wider climate risks, and make attractive returns from the clean economy.”

Among the lessons it draws from the experience so far of the campaigners, the Rapid Transition Alliance stresses two. It says:

“Finance is the lifeblood of the global economy. Withdrawing it from the coal, oil and gas sector pulls the plug on the fossil fuels that drive climate change. That leaves a challenge to ensure that divested funds get reinvested into low carbon transition, such as renewable energy.

Controversy continues

“Investors understand the language of risk and increasingly recognise that putting money into a potentially unusable commodity – fossil fuels which cannot be safely burned due to climate targets – runs the risk of their ‘assets’ being stranded, and therefore the loss of their investment.”

There is still controversy, though, because many in the oil industry predict that demand for their product will continue to rise for a decade or more. Others argue that there is already over-production of oil, keeping the price at less than $60 a barrel, and meaning that even setting aside the arguments about climate, extracting a large proportion of the “assets” in the ground is unlikely ever to be economic.

But although BP and Shell are said to be already “cooperating” with Climate Action 100+, fossil fuels are only part of the story. Steel, mining, and all sorts of manufacturing industries are also heavy polluters. The investors are focusing on 161 of the world’s largest polluting companies in which they are shareholders.

Apart from getting them to curb emissions, obviously a core issue, the investors are demanding that companies stop campaigning to cast doubt on the science of climate change, funding climate deniers and attacking campaigners.

The group says it has secured record support for action on climate at company meetings, with many companies committing to reaching net zero emissions. Carbon emissions are already falling, it says, although acknowledging that progress is nowhere near fast enough.

Improving on Paris

Already 70% of the 161 companies have emission reduction targets, and 9% have targets that are in line with or better than the maximum 2°C rise agreed at the Paris climate talks in 2015.

Stephanie Maier, director of responsible investment at HSBC Global Asset Management and a steering committee member at Climate Action 100+, said: “We are now at a tipping point. A significant number of companies have made bold commitments to achieve net zero emissions, with others increasingly following suit.

“Given the urgency of the situation, the role of investor engagement is critical in ensuring we build on this momentum.”

However Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change and also a steering committee member at Climate Action 100+, was more cautious.

“We have much more to do before business is on track to meet the goals of the Paris Agreement”, she said. “We must now build on the momentum achieved to date if we are to succeed in addressing the climate crisis and safeguarding investments on which the futures of millions of pensioners depend.” − Climate News Network

About The Author

brown paulPaul Brown is the joint editor of Climate News Network. He is a former environment correspondent of the Guardian and also writes books and teaches journalism. He can be reached at [email protected]


Recommended Book:

Global Warning: The Last Chance for Change
by Paul Brown.

Global Warning: The Last Chance for Change by Paul Brown.Global Warning is an authoritative and visually stunning book

This Article Originally Appeared On Climate News Network

Related Books

Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming

by Paul Hawken and Tom Steyer
9780143130444In the face of widespread fear and apathy, an international coalition of researchers, professionals, and scientists have come together to offer a set of realistic and bold solutions to climate change. One hundred techniques and practices are described here—some are well known; some you may have never heard of. They range from clean energy to educating girls in lower-income countries to land use practices that pull carbon out of the air. The solutions exist, are economically viable, and communities throughout the world are currently enacting them with skill and determination. Available On Amazon

Designing Climate Solutions: A Policy Guide for Low-Carbon Energy

by Hal Harvey, Robbie Orvis, Jeffrey Rissman
1610919564With the effects of climate change already upon us, the need to cut global greenhouse gas emissions is nothing less than urgent. It’s a daunting challenge, but the technologies and strategies to meet it exist today. A small set of energy policies, designed and implemented well, can put us on the path to a low carbon future. Energy systems are large and complex, so energy policy must be focused and cost-effective. One-size-fits-all approaches simply won’t get the job done. Policymakers need a clear, comprehensive resource that outlines the energy policies that will have the biggest impact on our climate future, and describes how to design these policies well. Available On Amazon

This Changes Everything: Capitalism vs. The Climate

by Naomi Klein
1451697392In This Changes Everything Naomi Klein argues that climate change isn’t just another issue to be neatly filed between taxes and health care. It’s an alarm that calls us to fix an economic system that is already failing us in many ways. Klein meticulously builds the case for how massively reducing our greenhouse emissions is our best chance to simultaneously reduce gaping inequalities, re-imagine our broken democracies, and rebuild our gutted local economies. She exposes the ideological desperation of the climate-change deniers, the messianic delusions of the would-be geoengineers, and the tragic defeatism of too many mainstream green initiatives. And she demonstrates precisely why the market has not—and cannot—fix the climate crisis but will instead make things worse, with ever more extreme and ecologically damaging extraction methods, accompanied by rampant disaster capitalism. Available On Amazon

From The Publisher:
Purchases on Amazon go to defray the cost of bringing you InnerSelf.comelf.com, MightyNatural.com, and ClimateImpactNews.com at no cost and without advertisers that track your browsing habits. Even if you click on a link but don't buy these selected products, anything else you buy in that same visit on Amazon pays us a small commission. There is no additional cost to you, so please contribute to the effort. You can also use this link to use to Amazon at any time so you can help support our efforts.

 

enafarzh-CNzh-TWdanltlfifrdeiwhihuiditjakomsnofaplptruesswsvthtrukurvi

follow InnerSelf on

facebook icontwitter iconyoutube iconinstagram iconpintrest iconrss icon

 Get The Latest By Email

Weekly Magazine Daily Inspiration

POLITICS

A row of male and female speakers at microphones
234 scientists read 14,000+ research papers to write the upcoming IPCC climate report
by Stephanie Spera, Assistant Professor of Geography and the Environment, University of Richmond
This week, hundreds of scientists from around the world are finalizing a report that assesses the state of the global…
image
Climate explained: how the IPCC reaches scientific consensus on climate change
by Rebecca Harris, Senior Lecturer in Climatology, Director, Climate Futures Program, University of Tasmania
When we say there’s a scientific consensus that human-produced greenhouse gases are causing climate change, what does…
Court Takes Industry Bait, Caves to Fossil Fuels
Court Takes Industry Bait, Caves to Fossil Fuels
by Joshua Axelrod
In a disappointing decision, Judge Terry Doughty of the U.S. District Court for the Western District of Louisiana ruled…
G7 Embraces Climate Action to Drive Equitable Recovery
G7 Embraces Climate Action to Drive Equitable Recovery
by Mitchell Bernard
At Biden’s urging, his G7 counterparts raised the bar on collective climate action, pledging to cut their carbon…
Climate change: what G7 leaders could have said – but didn't
Climate change: what G7 leaders could have said – but didn't
by Myles Allen, Professor of Geosystem Science, Director of Oxford Net Zero, University of Oxford
The four-day G7 summit in Cornwall ended with little cause for celebration from anyone worried about climate change.…
How world leaders' high-carbon travel choices could delay climate action
How world leaders' high-carbon travel choices could delay climate action
by Steve Westlake, PhD Candidate, Environmental Leadership, Cardiff University
When UK prime minister Boris Johnson took a one-hour flight to Cornwall for the G7 summit, he was criticised for being…
Nuclear industry’s propaganda war rages on
by Paul Brown
With renewable energy expanding fast, the nuclear industry’s propaganda war still claims it helps to combat climate…
Shell ordered to cut its emissions – why this ruling could affect almost any major company in the world
Shell ordered to cut its emissions – why this ruling could affect almost any major company in the world
by Arthur Petersen, Professor of Science, Technology and Public Policy, UCL
The Hague is the seat of government of the Netherlands and also hosts the International Criminal Court. NAPA /…

LATEST VIDEOS

The Great Climate Migration Has Begun
The Great Climate Migration Has Begun
by Super User
The climate crisis is forcing thousands around the world to flee as their homes become increasingly uninhabitable.
The Last Ice Age Tells Us Why We Need To Care About A 2℃ Change In Temperature
The Last Ice Age Tells Us Why We Need To Care About A 2℃ Change In Temperature
by Alan N Williams, et al
The latest report from the Intergovernmental Panel on Climate Change (IPCC) states that without a substantial decrease…
Earth Has Stayed Habitable For Billions Of Years – Exactly How Lucky Did We Get?
Earth Has Stayed Habitable For Billions Of Years – Exactly How Lucky Did We Get?
by Toby Tyrrell
It took evolution 3 or 4 billion years to produce Homo sapiens. If the climate had completely failed just once in that…
How Mapping The Weather 12,000 Years Ago Can Help Predict Future Climate Change
How Mapping The Weather 12,000 Years Ago Can Help Predict Future Climate Change
by Brice Rea
The end of the last ice age, around 12,000 years ago, was characterised by a final cold phase called the Younger Dryas.…
The Caspian Sea Is Set To Fall By 9 Metres Or More This Century
The Caspian Sea Is Set To Fall By 9 Metres Or More This Century
by Frank Wesselingh and Matteo Lattuada
Imagine you are on the coast, looking out to sea. In front of you lies 100 metres of barren sand that looks like a…
Venus Was Once More Earth-like, But Climate Change Made It Uninhabitable
Venus Was Once More Earth-like, But Climate Change Made It Uninhabitable
by Richard Ernst
We can learn a lot about climate change from Venus, our sister planet. Venus currently has a surface temperature of…
Five Climate Disbeliefs: A Crash Course In Climate Misinformation
The Five Climate Disbeliefs: A Crash Course In Climate Misinformation
by John Cook
This video is a crash course in climate misinformation, summarizing the key arguments used to cast doubt on the reality…
The Arctic Hasn't Been This Warm For 3 Million Years and That Means Big Changes For The Planet
The Arctic Hasn't Been This Warm For 3 Million Years and That Means Big Changes For The Planet
by Julie Brigham-Grette and Steve Petsch
Every year, sea ice cover in the Arctic Ocean shrinks to a low point in mid-September. This year it measures just 1.44…

LATEST ARTICLES

trees to plant for climate2
Plant These Trees To Improve City Life
by Mike Williams-Rice
A new study establishes live oaks and American sycamores as champions among 17 “super trees” that will help make cities…
north sea sea bed
Why We Must Understand Seabed Geology To Harness The Winds
by Natasha Barlow, Associate Professor of Quaternary Environmental Change, University of Leeds
For any country blessed with easy access to the shallow and windy North Sea, offshore wind will be key to meeting net…
3 wildfire lessons for forest towns as Dixie Fire destroys historic Greenville, California
3 wildfire lessons for forest towns as Dixie Fire destroys historic Greenville, California
by Bart Johnson, Professor of Landscape Architecture, University of Oregon
A wildfire burning in hot, dry mountain forest swept through the Gold Rush town of Greenville, California, on Aug. 4,…
China Can Meet Energy and Climate Goals Capping Coal Power
China Can Meet Energy and Climate Goals Capping Coal Power
by Alvin Lin
At the Leader’s Climate Summit in April, Xi Jinping pledged that China will “strictly control coal-fired power…
Blue water surrounded by dead white grass
Map tracks 30 years of extreme snowmelt across US
by Mikayla Mace-Arizona
A new map of extreme snowmelt events over the last 30 years clarifies the processes that drive rapid melting.
A plane drops red fire retardant on to a forest fire as firefighters parked along a road look up into the orange sky
Model predicts 10-year burst of wildfire, then gradual decline
by Hannah Hickey-U. Washington
A look at the long-term future of wildfires predicts an initial roughly decade-long burst of wildfire activity,…
White sea ice in blue water with the sun setting reflected in the water
Earth’s frozen areas are shrinking 33K square miles a year
by Texas A&M University
The Earth’s cryosphere is shrinking by 33,000 square miles (87,000 square kilometers) per year.
A row of male and female speakers at microphones
234 scientists read 14,000+ research papers to write the upcoming IPCC climate report
by Stephanie Spera, Assistant Professor of Geography and the Environment, University of Richmond
This week, hundreds of scientists from around the world are finalizing a report that assesses the state of the global…

 Get The Latest By Email

Weekly Magazine Daily Inspiration

New Attitudes - New Possibilities

InnerSelf.comClimateImpactNews.com | InnerPower.net
MightyNatural.com | WholisticPolitics.com | InnerSelf Market
Copyright ©1985 - 2021 InnerSelf Publications. All Rights Reserved.