It's being called the single biggest leap in fossil fuel divestment in history. On Tuesday, during Climate Week 2015, oil and gas divestment supporters and media gathered in a packed room at New York's Paley Center for Media to hear this year's tally of divestment commitments made by companies and private investments across the globe. With last year's count at $52 billion, and a modest number of companies and private investors signed up, the Divest-Invest campaign aimed to triple the number of commitments from universities, companies and individuals who previously relied on oil and gas investments as part of their portfolios.
The organization did far better than that assertive goal.
"To date, 430 institutions and 2,040 individuals across 43 countries and representing $2.6 trillion in assets have committed to divest from fossil fuel companies," says the organization. The surge translates to a 50-fold increase in divestment assets since last year's Climate Week.
Part of that boost was due to recent decisions by some 40 educational institutions to divest, either wholly or in part, from fossil fuels. The University of California, Georgetown University and Oxford University were among the largest. The $130 billion in divestments is representative of the impact that student protests are having across the world, said Alden Finney, a student and divestment organizer at the University of California.
"Students come to the table because they realize climate change is an injustice," Finney said.
Governments are also stepping up to the plate. Increasing pressure from constituents, and the financial impact of climate change, has been encouraging state and local governments to redirect their pension fund investments. One of the largest divestments occurred this month, when the California General Assembly voted to yank its $476 billion in pension fund investments from those companies that get at least half of their revenue from coal. And U.S. cities aren't the only local governments to have a change of heart. Australia's Capital Territory and the Australian city of Newcastle also backed away from oil and gas investments.
"The average emember of our valuation funds is 30 years old," said Simon Sheikh, CEO of the Fossil Fuel Free Super Annuation Fund in Canberra, Australia, and they want to ensure that their investments match their future retirement needs. "They want their pension funds to be right along beside them" when they retire, Sheikh told 3p.
On hand to lend support to the campaign was actor Leonard DiCaprio, who has announced that he has dropped fossil fuel investments from both his personal portfolio and the assets of his philanthropic organization, the Leonard DiCaprio Foundation. DiCaprio has been a leading supporter of the efforts to fight climate change, so the announcement is no surprise. But it helps to underscore a key point in this investment shift, said Dr. Ellen Dorsey, conference moderator and executive director of the Wallace Global Fund: Charities are making the change in large ways and shifting the balance in energy investment strategies.
"The philanthropic sector has been a substantial force in this movement," Dorsey said. More than 140 organizations have pledged divestment recently, adding another $10 billion to the tally.
Faith organizations in particular, says the Divest-Invest report, are stepping forward to encourage the transition from fossil fuel investments. "Faith leaders of diverse religions and creeds are demanding our world’s leaders take meaningful action to curb climate change at the U.N. climate negotiations in Paris in December." More than 120 different organizations, representing $24 billion, have made a commitment to switch to sustainable investments.
"For faith communities, the earth is our house and we want to pass it on at least as good as we received," said Rev. Fletcher Harper of Green Faith. He noted that it isn't just Christian communities that are stepping forward to call for divestment, but "Muslim and Hindu" communities as well. A coalition of Muslim leaders from 20 countries recently made an appeal for investors to divest from oil and gas industries.
Jewish communities, as well, have stepped forward to advocate for divestment. In February 2014, a consortium of faith-based organizations wrote to Pope Francis, calling on the Vatican to support divestment efforts. The request was co-signed by Rev. Harper and Rabbi Jonathan Keren Black, president of the Australian Religious Response to Climate Change, a multi-faith coalition. Similar calls have been heard here in the U.S., Canada and Israel.
The Executive Secretary of the United Nations Framework Convention on Climate Change, Christiana Figueres, opened the press conference by noting the significance of the announcement. It "shows the real strength of this momentum for change," Figueres told the audience. She said there are three underpinnings to shifting the world's economy away from fossil fuels and climate change, which she said has already been proven to be, in part, a by-product of fossil fuel carbon emissions.
The capital shift away from oil and gas investments "must keep pace with the scientifically-defined timelines" set for reducing global warming, Figueres said. And the shift must be "rapid but orderly."
Governments and investors must work hand-in-hand through strategies that incentivize this shift, such as carbon pricing, subsidies that incentivize change and other innovative options.
"Investing at scale in clean, efficient power offers one of the clearest no-regret choices ever presented to human progress," Figueres said at Climate Week.
Other speakers included but weren't limited to Rev. Lennox Yearwood, Jr., president and CEO of Hip Hop Caucus, who highlighted the effort of artists to bring discussion about fossil fuel divestment to the fore, and May Boeve, executive director of 350.org, who noted that as momentous as the $2.6 trillion announcement sounds, it's only a benchmark.
"We're not done," Boeve said decisively. There will be more public marches and calls for divestment across the world, including in Japan and the Vatican. There will also be efforts to spearhead the divestment of a dozen cities in the U.K.
"These numbers mean a lot of things," Boeve explained. But most importantly, it means businesses and investors aren't the only ones who need to take climate change and fossil fuel divestment seriously. "We need governments to divest also."
Image credit: Flickr/James Ennis