Alastair Marsh
Mon, October 25, 2021
(Bloomberg) -- The pool of potential buyers for fossil-fuel stocks keeps shrinking and shrinking.
About 1,500 investment institutions overseeing a combined $39.2 trillion of assets are now committed to divesting from fossil fuels, according to a report issued Tuesday by DivestInvest. That’s a huge increase from $52 billion across 181 institutions in 2014, the first year the group tallied such commitments.
So far in 2021, the $16 billion Ford Foundation, started by the son of Henry Ford and now one of the largest private family foundations in the world, said it will cease to invest in fossil fuels. Harvard University made a similar pledge for its giant $42 billion endowment and Maine became the first U.S. state to order its public pension fund to sell off fossil-fuel holdings.
New York City’s pension funds have announced plans to divest about $4 billion worth of fossil fuel-related investments and Canada’s second-largest pension manager, Caisse de Depot et Placement du Quebec, has said it will sell billions of dollars worth of oil assets, including large equity stakes in Canada’s top crude producers, as part of a new strategy that aims to dramatically cut the emissions from its investments.
“The fossil-fuel divestment movement is growing at an accelerated clip, because the world has realized where the money flows determines our success in slowing climate change,” said Richard Brooks, climate finance director at environmental nonprofit Stand.earth. “More money simply needs to get out of financially risky coal, oil and gas companies, and switched over to companies driving climate solutions, including renewables.”
Dumping fossil fuels is a quick win for funds wishing to decarbonize portfolios, yet whether it also produces a positive outcome for the climate is fiercely debated. Simply selling fossil-fuel stocks doesn’t change the demand or use of fossil fuels, and in fact can lead to carbon-intensive companies being held predominantly in portfolios of investors that are less motivated to push for lower emissions.
Still, authors of the DivestInvest report said the movement can now “offer solid proof that divestment is a sound financial strategy” and that “fossil fuels are a bad bet financially.” Early adopters of divestment strategies are reporting positive financial results and more institutions “cite the financial reality that climate change will make fossil fuels obsolete and a renewable energy future inevitable,” according to the report.That chimes with the findings of a BlackRock Inc. report commissioned by New York City that said “no investors found significant negative performance from divestment, but rather have reported neutral to positive results.”
Dutch pension fund to divest from fossil fuel producers
Netherlands Climate Pension FundFILE- In this Monday, Oct. 4, 2021, file photo, Dutch police, second right and fourth right, top, break up a demonstration of Greenpeace climate activists who lowered themselves from a fuel storage tank during a protest at a Shell refinery in Rotterdam, Netherlands. The Netherlands' biggest pension fund announced Tuesday Oct. 26, 2021, that it will stop investing in companies that produce fossil fuels, saying the move that has long been demanded by members of the fund was prompted by recent climate reports by the United Nations and International Energy Agency. (AP Photo/Peter Dejong, file)Less
MIKE CORDER
Tue, October 26, 2021,
THE HAGUE, Netherlands (AP) — The Netherlands' biggest pension fund announced Tuesday that it will stop investing in companies that produce fossil fuels, saying the move — long been demanded by many members of the fund — was prompted by recent climate reports by the United Nations and International Energy Agency.
The ABP fund is a wealthy and influential investor that manages the pension savings of more than 3 million Dutch workers in the government and education sectors. It has some 15 billion euros ($17.4 billion) invested in fossil fuel production, almost 3% of its assets.
In a tweet, the Dutch branch of Greenpeace called the move “a huge victory for all the people who called on ABP to take climate action!”
The announcement comes just days before a U.N. climate conference known as COP26 opens in Glasgow. Many environmental activists, policymakers and scientists say the Oct. 31-Nov. 12 event marks an important and even crucial opportunity for concrete commitments to the targets set out in the 2015 Paris climate accord.
“We want to contribute to minimizing global warming to 1.5 degrees Celsius. Large groups of pension participants and employers indicate how important this is to them," ABP Chairman of the Board Corien Wortmann said in a statement.
“The ABP Board sees the need and urgency for a change of course,” she added. "We part with our investments in fossil fuel producers because we see insufficient opportunity for us as a shareholder to push for the necessary, significant acceleration of the energy transition at these companies."
The fund said it will invest in major users of fossil fuels — energy producers, the automotive and aviation industries — and, using its clout as a shareholder, “will encourage companies that use fossil fuels to become more sustainable.”
It said it will divest its fossil fuel holdings in phases with most expected to be sold by the first quarter of 2023.
Netherlands Climate Pension FundFILE- In this Monday, Oct. 4, 2021, file photo, Dutch police, second right and fourth right, top, break up a demonstration of Greenpeace climate activists who lowered themselves from a fuel storage tank during a protest at a Shell refinery in Rotterdam, Netherlands. The Netherlands' biggest pension fund announced Tuesday Oct. 26, 2021, that it will stop investing in companies that produce fossil fuels, saying the move that has long been demanded by members of the fund was prompted by recent climate reports by the United Nations and International Energy Agency. (AP Photo/Peter Dejong, file)Less
MIKE CORDER
Tue, October 26, 2021,
THE HAGUE, Netherlands (AP) — The Netherlands' biggest pension fund announced Tuesday that it will stop investing in companies that produce fossil fuels, saying the move — long been demanded by many members of the fund — was prompted by recent climate reports by the United Nations and International Energy Agency.
The ABP fund is a wealthy and influential investor that manages the pension savings of more than 3 million Dutch workers in the government and education sectors. It has some 15 billion euros ($17.4 billion) invested in fossil fuel production, almost 3% of its assets.
In a tweet, the Dutch branch of Greenpeace called the move “a huge victory for all the people who called on ABP to take climate action!”
The announcement comes just days before a U.N. climate conference known as COP26 opens in Glasgow. Many environmental activists, policymakers and scientists say the Oct. 31-Nov. 12 event marks an important and even crucial opportunity for concrete commitments to the targets set out in the 2015 Paris climate accord.
“We want to contribute to minimizing global warming to 1.5 degrees Celsius. Large groups of pension participants and employers indicate how important this is to them," ABP Chairman of the Board Corien Wortmann said in a statement.
“The ABP Board sees the need and urgency for a change of course,” she added. "We part with our investments in fossil fuel producers because we see insufficient opportunity for us as a shareholder to push for the necessary, significant acceleration of the energy transition at these companies."
The fund said it will invest in major users of fossil fuels — energy producers, the automotive and aviation industries — and, using its clout as a shareholder, “will encourage companies that use fossil fuels to become more sustainable.”
It said it will divest its fossil fuel holdings in phases with most expected to be sold by the first quarter of 2023.
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