Amid fake news, it's nice to hear that some are paying attention to real
news:
Peri
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Investment Funds Worth Trillions Are Dropping Fossil Fuel Stocks
http://www.nytimes.com/2016/12/12/science/investment-funds-worth-trillions-are-dropping-fossil-fuel-stocks.html?ref=business
By JOHN SCHWARTZ, DEC. 12, 2016
Investors controlling more than $5 trillion in assets have committed to
dropping some or all fossil fuel stocks from their portfolios, according
to a new report tracking the trend.
The report, released Monday, said the new total was twice the amount
measured 15 months ago — a remarkable rise for a movement that began on
American college campuses in 2011. Since then, divestment has expanded
to the business world and institutional world, and includes large
pension funds, insurers, financial institutions and religious
organizations. It has also spread around the world, with 688
institutions and nearly 60,000 individuals in 76 countries divesting
themselves of shares in at least some kinds of oil, gas and coal
companies, according to the report.
“It’s a stunning number,” said Ellen Dorsey, the executive director of
the Wallace Global Fund, which has promoted fossil fuel divestment and
clean energy investment as part of its philanthropy.
The movement has also received a boost from last year’s Paris climate
agreement, which set targets for reducing greenhouse gas emissions to
avoid the worst effects of climate change. The push for emissions
reductions underscored the potential for the industry to be faced with
reserves of fuels that cannot be burned if the targets are to be met — a
prospect known as “stranded assets.”
Ms. Dorsey argued that since its beginnings as a moral statement against
profiting from companies whose products were exacerbating climate
change, more institutions have come to detect vulnerabilities in fossil
fuel companies as the world shifts toward renewable sources of energy.
“This movement began as an ethical concern, was quickly matched with
financial concerns, and I think it’s now being increasingly recognized
as a fiduciary duty,” she said, with liability risks to trustees of
institutions who fail to recognize those weaknesses and act on them.
Divesting from coal, an industry in the midst of a long-term decline,
has proved to be relatively straightforward, and recent drops in the
prices of oil and gas have hurt the fortunes of those industries as
well.
Christopher D. Tucker, a spokesman for the Independent Petroleum
Association of America, said that the pro-divestment argument had been
strengthened by industry troubles. “This was always going to be a
kick-you-while-you’re-down strategy,” he said, “but we’re on the way up
now, so the case has gotten weaker.”
While the overall value of the funds announcing divestment is measured
in the trillions of dollars, the actual amount of investment that was
tied to fossil fuels within those funds is much smaller, because no
single industry sector predominates in most broad investment funds. Ryan
Strode, the director of Arabella Advisors, the group that produced the
report, said the precise value of dropped investments was impossible to
know. The group focuses on the overall value of the funds under
management with divestment pledges, he said, because “This is the
measure of the level of influence that these investors have on the
market.”
Many institutions remain unconvinced. Some universities, in rejecting
calls for divestment, have cited their fiduciary responsibility to
produce the greatest income from their endowments. Harvard’s president,
Drew Gilpin Faust, has said that the university supported research and
efforts to fight climate change, but that “The endowment is a resource,
not an instrument to impel social or political change. ”
With the election of Donald J. Trump, who has called climate change a
hoax and has pledged to reverse President Obama’s signature global
warming initiatives, activism will be more important, Ms. Dorsey said.
And, she added, if the new president wants job growth, continuing to
invest in renewable energy is the way to go.
“They should focus on the explosive industries where manufacturing jobs
are being created,” she said. “In a fact-driven world, it’s just very
clear.”
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