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Ecologist Special Report: Divesting from investment in fossil fuels gains momentum in the UK

By Remo Bebié, Finance Dialogue - Ecologist, May 15, 2017

Bill McKibben, Author and co-founder of 350.org is categoric that one of the key ways to tackle climate change is through financial channels: "There is no question we are currently in a state of emergency on climate change. Day in day out people are dying from the effects of climate change. There are many ways to confront this emergency and divestment allows us to get in the way of the money financing the fossil fuel projects behind this crisis.

"The fact that the fossil fuel divestment movement has grown exponentially in the last few years is the best news ever. From the Pacific Islands to South Africa, from the United States to Germany, people are standing up and challenging the power of the fossil fuel industry."

And in the UK too, the divestment movement is now gathering momentum.

Only last week, 50 MPs announced their backing of a campaign calling on parliament's £612m pension fund to divest from fossil fuels.

Faith groups too are also increasingly moving out of fossil fuel investments. Earlier this month, more than a quarter of Britain's Quaker meetings pledged to divest and the Catholic Church is also taking stand ("the Catholic fossil fuel divestment movement has gained further momentum as nine more institutions pull out of fossil fuels, citing a "political impasse" around US withdrawal from the Paris Agreement." )

In late January, the Irish Parliament voted in favour of a law requiring the country's £6.8 billion Ireland Strategic Investment Fund to divest from all fossil fuels over the next five years. The story went viral on social media.

Three weeks ago, Norway's largest private pension fund, Storebrand, launched two new fossil free funds, bringing their fossil free fund portfolio to $1.2 billion. Storebrand also warned that the Norwegian government is overly exposed to fossil fuels through its $900 billion sovereign wealth fund, even though it has already taken significant steps to reduce exposure in the past.

Momentum is gathering at such a speed in the UK it appears to be approaching a tipping point: Waltham Forest and Southwark, two local government pension schemes for boroughs in London, have pledged to fully divest from fossil fuels within the last year, while Hackney's pension fund committed to cut its exposure by 50 percent, as the FT reported recently. Among the UK's Local Government Pension Schemes, these three are on the smaller range, each managing assets between £0.74 and £1.26 billion.  

But examples also include the £2.73 billion Environment Agency's Pension Fund, which is currently ranked second in the Asset Owner Disclosure Project's 2017 ranking (first in 2016) among the world's 500 largest asset owners. The fund is widely considered a global leader in terms of aligning investment strategies with the goals called for in the Paris agreement and reducing financial risks associated with the energy transition.

UK workplace pension scheme NEST, already progressive in terms of integration of Environment, Social and Governance (ESG) issues, has recently added a specific climate tilted fund to it's portfolio. NEST cited "addressing risks and capturing opportunities associated with the move to fight climate change" as reasons for launching the fund. 

Private institutions are taking note too: Last fall, HSBC Bank UK Pension Scheme chose a new climate tilted fund as the equity default option for its £2.6 billion defined contribution (DC) scheme. The scheme's CIO, Mark Thompson, expects the move to deliver "better risk-adjusted return, protection against climate change risks, and a more powerful ESG engagement policy within a passive mandate".

Furthermore, by April 2018, most UK local government schemes are due to be integrated into eight pools, each managing between £12 and £36 billion of pooled assets (see here for a good pooling overview by IPE). Implementation of divestment pledges for individual schemes will depend on the pool structure. The schemes of the London boroughs are already being pooled through London CIV, which recently wrote that it is "focusing on investment strategies the pension fund authorities have shown most demand for, namely: global equity income; sustainable equities; emerging markets and value strategies." 

Many other pools are now in the process of hiring executives: Brunel, the pool which contains the Environment Agency's Pension Fund, and LGPS Central have named new chairs within the last month. The London Pension Fund Authority (LPFA) is currently "seeking to recruit additional Board Members with knowledge and experience of either: 1) Environmental Social and Corporate Governance issues in a pension fund, with a strong commitment to delivering divestment from fossil fuels; or 2) strategic and sustainable infrastructure investment by pension funds, with a breadth of experience across all forms of infrastructure investment." 

All this indicates that more activity may be expected from the UK's public and private institutional investors. And public pressure is rising as well as various UK local government pension schemes are engaged by campaigners as part of the Global Divestment Mobilisation (GDM) with calls for fossil fuel divestment (see here for complete list of LGPS engagements within the Mobilisation).

Council Nurses Urge San Francisco To Divest from DAPL

By staff - California Nurses Association, March 15, 2017

Nurses from the San Francisco (SF) Metro Council attended an SF Board of Supervisors meeting to urge the city to divest from any banks and financial institutions who have investments in the Dakota Access Pipeline. The SF Metro Council nurses joined other activists present from the SF NoDAPL Coalition.

After 5 1/2 hours of other agenda items and public comment, The Board of Supervisors voted unanimously to pass the resolution to direct the treasurer/tax collector to update the social responsibility investment matrix to include a screen for all DAPL related investments.  This is a significant victory for our ongoing fight to get San Francisco to fully divest from DAPL and pull out their $10 billion from Bank of America.

Kaiser SF RN, Julilynn Carter spoke during public comment about her role as a nurse and how nurses care about public health and the impact climate change has had on public welfare. She also spoke about our collective need to recognize indigenous rights.

CalPERS, CalSTRS, UC Invested in Dakota Access Pipeline Despite Pledges of Sustainability

By Darwin Bond-Graham - East Bay Express, December20, 2016

Last Monday, two-dozen activists chanted, sang, and drummed outside Wells Fargo' San Francisco headquarters to demand the bank stop financing the Dakota Access Pipeline. Wells Fargo has drawn criticism for its central role in raising funds for the pipeline's construction. But banks aren't the only Bay Area institutions that stand to profit if the pipeline is completed.

The University of California and the state's two largest public pension systems, CalPERS and CalSTRS, are also invested in Energy Transfer Partners and the oil company Sunoco, which recently merged with ETP in a deal worth $20 billion. ETP and Sunoco are the companies building the Dakota pipeline.

According to the UC's most recent annual report for its employee-retirement system, it has $3.1 million invested in Energy Transfer Partners bonds.

CalPERS, the state's giant public-employee retirement system, has invested $57 million in Energy Transfer Partners. The retirement system also owns Sunoco bonds worth $1.8 million.

And the California State Teachers Retirement System, or CalSTRS, owns $34 million in Energy Transfer Partners bonds and another $12.8 million in Sunoco bonds.

"By buying these corporate bonds they're betting on the success of the pipeline," said Janet Cox of Fossil Free California, a group that advocates divesting from fossil fuels.

Teachers, students, and public employees have rallied for years to divest retirement funds and endowments from oil, gas, and coal. Results have been slow and mixed.

PA Public School Employees, DIVEST!

By Dianne Arnold, et. al. - Berks Gas Truth, November 11, 2016

If you are a current or retired PA public school employee, please consider signing the letter being circulated by a group of teachers who have started a divestment campaign. Below is the email they have sent to colleagues that contains the link to the sign on letter.

The letter is based on research we did that found that 49% of the PSERS holdings are in fossil fuels and that many of the drilling and pipeline companies doing  harm in Pennsylvania are on the list.

Dear Colleagues:

I am writing to you to ask you to join me in taking action today on a critical issue.  As you probably know, an overwhelming majority of climate scientists agree that continuing to burn fossil fuels is putting our planet’s future in peril unless we act decisively.  But, are you aware that 29 of the top 32 holdings in PSERS, our pension fund, are with fossil fuel companies? One of them, Energy Transfer Partners, has been cited for brutal treatment of Standing Rock Sioux members protecting sacred burial grounds and local water supplies from the proposed Dakota Access Pipeline.  In Pennsylvania, Energy Transfer Partners and other companies are involved in massive pipeline build-outs to move gas to shipping ports.

An increasing number of retirement plans in the United States and across the world are divesting from fossil fuels and doing so profitably. In fact, a portfolio heavily reliant on fossil fuels is not financially sound.

Please join me and a number of our fellow educators and retirees in taking 3 decisive steps.

  • Sign the online petition,https://bitly.com/PSERSDIVEST, demanding that PSERS begins to divest from fossil fuels.
  • Forward this e-mail and attached petition to all educators you know who are members of PSERS.
  • Share the petition on Facebook or whatever form of social media you use.

We will deliver this letter, with the list of supportive current and retired educators, at the next PSERS board meeting on December 7.

Not only is this a financial issue, but it is a moral issue as well.   Our actions now will impact our children today and all future generations.

Thank you.

Dianne Arnold, retired educator, Allegheny Intermediate Unit

Mike Kamandulis, retired instructor of Earth and Environmental Science, Penn State, DuBois

Robin Lowry, teacher, School District of Philadelphia

Anita Mentzer, retired teacher, Annville-Cleona SD

Max Rosen-Long, teacher, School District of Philadelphia

6 Ways to Fight Climate Chaos

By Out of the Woods - Novara Wire, May 24, 2015

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

Climate change is an issue so big it can be paralysing. It doesn’t help with the paralysis that proposed solutions tend to be either hopelessly inadequate (change your lightbulbs! buy local!), or hopelessly ambitious (just replace capitalism with global eco-communes!). Out of the Woods is a blog focused on research and theory; obviously, we think that’s important, but it does leave people asking, “OK, but what should we actually do?” In our view, the only meaningful way to fight climate change is to fight the people whose interests and choices are wrecking the climate. In that spirit, here are six ways to become part of the global movement against fossil fuels and climate chaos.

1 Join Blockadia.

From Elsipogtog to Balcombe, a movement Naomi Klein has dubbed ‘Blockadia’ is developing to prevent new fossil fuel extraction. In the case of Elsipogtog this is part of wider indigenous struggles for the land. These kind of struggles have been at their strongest when strong waged through alliances between local residents and environmental activists. Potential ‘Blockadia’ flashpoints in the UK include the ‘new dash for gas’, stopping new coal coming online, and preventing road and airport expansion. With the government opening up large swathes of this country for fracking, Blockadia could be coming soon to a place near you.

2. From divestment to non-cooperation.

We think that divestment campaigns are unlikely to have much impact. This is because many fossil fuel companies are not publicly traded corporations. Those that are don’t typically raise investment capital through the stock market.

That said, divestment campaigns may serve a movement-building function. They have been prominent in universities, where – in the other direction – a lot of funding goes from fossil capital to university research. There are also many cases of curricula tailored to the fossil fuel industry. Divestment campaigns could serve as a springboard to wider demands for non-cooperation with fossil capital. That could start to impact the development of new fossil fuel reserves.

If the world is to avoid climate chaos, new reserves absolutely have to stay in the ground. In fact, at this point the best case scenario is probably mitigating climate chaos. Climate change isn’t a possibility that might happen in the future: it’s happening now and will continue. What we’re fighting over is how fast and how bad climate change will be.

3. Green syndicalism.

‘Green syndicalism’ is a term coined by anarchist organiser-turned-academic Jeff Shantz to describe radical worker-based ecological organising. For example, in the 1970s the Building Labourer’s Federation in Australia implemented ‘green bans’ against ecologically-damaging projects, as recounted in the inspiring film Rocking the Foundations.

Another example is the historic joint ‘Local 1’ of eco-activists Earth First! and revolutionary unionists the IWW, which organised timber workers against the destruction of old growth forest in northern California in the 1990s. Green syndicalist tactics include sabotage, workers tipping off external activists, and activists occupying work sites as a pretext for workers to down tools in unofficial work stoppages.

Elements of these kind of tactics have been used in the UK, such as the McLibel Support Campaign linking up with McDonalds Workers Resistance in the early 2000s, and the occupation of the Vestas wind turbine factory in 2009, following factory-gate agitation by environmentalists. The basic tenet of green syndicalism is that the interests of capital are opposed to those of both workers and the environment. This provides a strong basis for a ‘red-green alliance’, to counter workers and environmentalists being played off against each other in a capitalist ploy of divide and rule.

Norway’s Largest Pension Fund Divests from Coal

By Beverly Bell - Fossil Free, November 19, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

Norway’s largest manager of pension funds, KLP, has decided to sell off all its investments in coal companies. KLP executives will instead invest half-a-billion kroner (around USD 75 million) in renewable energy ventures.

KLP manages the pension funds for the majority of Norway’s public sector employees. With its total assets of nearly NOK 500 billion ($84bn/€67bn) its clout in the investment world ranks second only to the Norway’s huge sovereign wealth fund, known as the oil fund.  Today’s decision sets an important precedent for the Oil Fund which is due to announce a decision on its investments in fossil fuels later this month!

Today KLP’s CEO Sverre Thornes announced that: “We are divesting our interests in coal companies in order to highlight the necessity of switching from fossil fuel to renewable energy.”   KLP has decided to invest NOK 500 million more in increased renewable energy capacity.

After a query from one of its local municipal clients, the township of Eid in the mountainous Norwegian county of Sogn og Fjordane, KLP said it has “assessed whether it is possible to contribute to a better environment by pulling investments out of oil, gas and coal companies” without affecting future returns on its investment portfolio.