Updates

We delivered their ask for 1000 signatures

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In October 2013, students from various institutions came together to campaign against our university’s investments. We wanted to have a democratic say in the way our university acts and functions, and we wanted to question the politics made by fossil fuel companies all over the world.

We started our campaign with a petition. We wrote opinion pieces, and were soon interviewed by two local newspapers. In one of the resulting pieces, the financial accountant of our university was interviewed. His comment was that there must be a strong and broad support for the campaign. The sustainability director was also interviewed. Here’s what he said:

“There is a difference between if ten or a thousand people thinks this is an important question.”

After this statement, that number started to appear as a goal. A thousand. When we have a thousand signatures, the university might actually consider this a wide-spread and relevant students’ opinion. So here’s what we did:

Gothenburg University has around 40 000 students, and the campuses are spread all over town. We wanted to reach out with the Fossil Free message to the whole of the university. During one week, we decided that we would try to be present on as many campuses as possible. We also created a Facebook event called “1000 signatures against the fossil fuel industry”. The event spread quickly among the university’s students, and when out on campuses, we really felt that a majority of the students we spoke to agreed with the ethical arguments of the campaign and also eager to make a change. Our campaigning week out on the campuses left us with a lot of optimism!

Now, two weeks after we launched this effort, we’ve reached 1000 signatures. Reaching our goal – a thousand signatures – feels incredible. The question is: What next? Well, when they ask, we deliver. When we ask, will they deliver?

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Today we participated as panelists in a seminar arranged by the Sustainability Unit of the University. The seminar was about sustainable investing and the Fossil Free campaign. During the seminar we presented our demands – we imagine that this seminar will give us lots of momentum. When asked, everyone in the audience agreed that the university should divest – students and employees equally.

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Spring 2014 might actually be the spring when Gothenburg University goes Fossil Free.

Written by
Moa Karlsson, Gothenburg University

A New Beginning: Getting a ‘NO’

Campaigns in the US Fossil Fuel Divestment movement have been working hard for almost two years now. Through building power on campus and negotiating with administrators, campaigns have built strong foundations – even when told ‘no’ on divestment.

Does getting a ‘no’ on your campaign mean that your campaign is over?

No. It means we are just getting to the good stuff. Public ‘no’s from major universities have done nothing but drive the conversation more and more in the media, and help activists dig in deep for the long haul fight of climate justice organizing.

The good stuff:
1. Discover new opportunities. Coming back from a ‘no’ requires you to dig deeper, strengthen existing relationships, and build a more diverse coalition. As you become more grounded in the realities and intersections of your campus and community, new opportunities to collaborate will emerge.
2. Give ourselves the permission to escalate. We can create a strategy built on bold actions that demonstrate our power and pull specific decisionmakers back to a point of decision and advance the campaign.
3. Create the public narrative the divestment movement is seeking. Good stories have compelling ‘choice points’ – and this is ours. We can choose to walk away – or we can choose to reveal the deep-seeded, and often hidden, power the fossil fuel industry has over our institutions, elected officials, and communities. Add in reports like the IPCC Impacts document – and we are proving that we have both credibility and momentum on our side.
4. Build Power through Secondary Victories. A ‘no’ forces us to be more creative with our organizing strategy. Check out Chloe’s piece on what happened at Harvard today: Harvard became the first higher education institution in the US to join the UN Principles for Responsible Investment. They also signed onto the Carbon Disclosure Project, and (yes, there’s more) created a Climate Change Solutions Fund to invest in renewable energy technologies. Harvard is giving $1 million to the fund this fall, and they’re raising an additional $19 million.

Harvard is recognizing that their investments do have an impact…but still investing millions in climate destruction as we take these productive steps forward. So here’s Divest Harvard’s response: http://divestharvard.com/divest-harvards-response-to-harvards-plan-to-confront-climate-change/. These secondary victories build momentum and power as we ramp up to bigger and bolder asks.

So what do we do? Get creative, start linking up with other campaigns, get trained, and dig deep on with on campus organizing. We need to be constantly building power and showing that power to win, whether it is targeting secondary movement targets or primary on campus targets.If you are wanting to define escalation, hear powerful stories, plan bold action, and gain the resources to take your campaign to the next level [like this action planning template] : get on the NEST calls 9 pm EDT/6 pm PDT every other Tuesday starting April 8th. [The following two calls are on April 22nd and May 6th.] Call number is 605.475.4000 and code 193981#.NEST Call Meme.jpg

Calling on Wash. U. to cut ties with Peabody Energy

Student activism looks very different in 2014 than it did just 5 years ago, when I began organizing as a student at Washington University in St. Louis. Students are less trustful of their colleges’ authority, and are more willing to take bold action to counter it. When a few friends and I dropped 5 banners in 2010 at an energy conference on campus, I felt like I was taking a major risk.

It began like this. In 2009, Greg Boyce, the CEO of Peabody Energy–one of the worst of the worst fossil fuel companies, had just been appointed to our board. In exchange, Peabody had given a large chunk of money to the school to do research on “Clean Coal”. I capitalize this phrase because it is a concept that exists only in marketing, not in reality. From that point on, students began resisting our University’s ties to the industry. This culminated in 2010 at the University’s conference on “America’s Energy Future.” It was a glorified advertisement for the coal and nuclear industries, and we students wanted to call it what it was — an exchange of our University’s academic (and perhaps ethical) reputation for funding.  We interrupted the conclusion of the conference (an open meet-and-greet) with 80 angry students and 5 banner drops. The campaign against Peabody has progressed since then through political action with a ballot measure in St. Louis, and more recently, with students leading a call to Wash U for complete divestment from the fossil fuel industry.

Like the campaign, our movement has progressed since 2009, too. 5 years later, dropping banners is child’s play. Students are walking out of classstaging sit-ins in their administrative buildings, and are locking themselves to the White House fence to call for climate sanity.  Perhaps it’s because we are now half a decade past the economic crisis of the late aughts with little hope for a full recovery or easy employment to counter mountains of student debt. Perhaps it’s that in tough economic times, many universities eschew their high-flying moral mission statements in favor of the safety of a good corporate deal (bring on the funding!). Or maybe it’s that 1,000+ brave souls rang in a new era of civil disobedience in our movement sitting in front of the White House to stop the Keystone XL pipeline in 2011.

But I think the real difference is that young people are stuck between a rock and a hard place. The consequences for speaking out or taking bold action against our institutions pale in comparison to the consequences of inaction. This week’s IPCC report confirms (again) that the impact of climate change will be much, much worse than we can fathom. It’s clearer than ever that our system is broken. And yet, institutions like my own Alma Mater, Wash U, continue to unblinkingly support the fossil fuel industry through seats on their boards, the gleeful acceptance of research dollars, and by churning out graduates eager for any jobs to pay off their debt in a failing economy.

The truth is, our young lives are dominated by fear — and that fear can paralyze us, or it can break down the barriers that keep us from authentic action. That’s why I’m so pleased to repost this article from Washington University’s student paper, written by a group of students unafraid to call out Wash U’s untenable ties to Peabody Energy. Read on for more of the details of Peabody’s behavior and what students see as the necessary response.

Wash U students — a few years graduated and a few hundred miles away, I stand with you in your fight!

Calling on Wash. U. to cut ties with Peabody Energy

Op-Ed written by Rachel Goldstein, David Binstock, Madeleine Balchan, Jamal Sadrud-Din, and reposted from Student Life, the campus newspaper of Washington University in St. Louis

In light of recent behavior by Peabody Energy, we are disappointed to see this corporation continuing to act in its own self-interest, in staunch opposition to the will of the people and at the expense of the public good. We are calling on this university to end its partnership with Peabody Energy.

On Feb. 11, as a result of a suit filed by Peabody, a judge ruling placed a temporary injunction on the city-wide “Take Back St. Louis” ballot initiative. This initiative, which was brought to the Board of Elections with 36,000 signatures, called for the city to end tax incentives to fossil-fuel extraction corporations, and invest public money and lands into renewable energy and sustainability initiatives. Peabody filed for suit against the initiative, claiming discrimination, and the judge ruled in their favor, citing equal protection to constitutional rights under Citizens United, a Supreme Court ruling of which even President Obama has been outwardly critical. This legal action has kept the initiative off of the April 8 ballot.

Elsewhere, in Saline County, Ill., Peabody’s expansion of a mining operation is threatening the local farming community of Rocky Branch. Despite strong opposition from the community, Peabody has continued its aggressive logging of the proposed site, and is attempting to take control of and divert important local roads. Community members are so threatened that they are now blockading the roads to deter Peabody. Residents are also worried about the fate of their town if coal mining operations expand, having witnessed and tolerated the blasting, hazardous coal dust, and polluted waterways of the neighboring Cottage Grove strip mine.

These are not the first instances of unethical or exploitative behavior by Peabody, but it provides an opportune moment for the Washington University community to reflect on its relationship with unscrupulous corporations. (more…)

World’s biggest investment fund doubles investments in renewables

The Norwegian government announced today a mandate for the country’s sovereign wealth fund to nearly double its investments in renewable energy amounting to $5-8.3 billion.

That’s great news! In the words of 350.org co-founder Bill McKibben: “Even those nations that made their fortune on oil are starting to see it’s not the future – the race to the exits is starting.”

Norway’s sovereign wealth fund also referred to as oil fund (most of the country’s proceeds from oil and gas went into it), is the world’s biggest investment fund valued at $840 billion USD. It owns 1.2% of the world’s listed stocks. Decisions on the fund’s investments can therefore be a real game changer with global implications.

It’s great that Norway is moving more money into renewables but there is little point if they’re spending huge sums of money digging up more fossil fuels at the same time. Now we need to see leadership from Norway by quickly divesting from fossil fuels and diverting that money towards renewables.

The Norwegian Parliament has set up a an expert group to assess whether the fund should phase out investments in coal, oil and gas, which currently represent 10% of the fund’s value.

The wealth fund’s remit is to make investments that benefit future generations. In the past it has excluded harmful industries such as nuclear weapon producers and tobacco companies from its portfolio.

7 Reasons to Sell Your Coal, Oil and Gas Stocks [Infographic]

Seven reasons to sell coal, oil and gas stocks

Click to enlarge

Most people think that coal, oil and gas stocks issued by companies like Shell, Exxon, Chevron, Arch Coal and others are reliable investments.  In the past five years, however, a number of trends are challenging that conventional wisdom.

Well-known and reputable financial firms in the U.S. and abroad have published reports highlighting a number of ways fossil fuel companies may have peaked as good investment options.  Just in the past month, the $850 billion Norwegian sovereign wealth fund — money earned from oil extraction — announced it would consider screening out fossil fuels for purely financial reasons.  And the British Parliament warned the Bank of England that it should consider the threat that climate change poses to its investments.

Regardless of what warnings experts offer, some experts and lay-investors alike will be resistant to change. They’ll prefer to rest their faith in the status quo – that “if it’s worked up until now, it’s probably a safe bet.”  On the other hand, memory of the devastating impact of the housing bubble and the consequent recession may be enough to spur investors to heed these new warnings.

Experts’ arguments for why coal, oil and gas stocks are not the investments they once were fall into a few categories: Seven reasons to sell coal, oil and gas stocks -- cover

1. Fossil fuel stocks have underperformed for several years

You won’t find the oil and gas industries listed among Morningstar’s top 20 best-performing stock sectors over the past year (or three years or five years).  And coal is near the bottom of the list!  What sectors are doing better? Computer systems, pharmaceuticals, apparel manufacturing…even solar has done better in the past year.

Citations:

a)     Morningstar.com, Cap-Weighted Industry Returns. http://news.morningstar.com/stockReturns/CapWtdIndustryReturns.html  (The Oil & Gas Refining and Marketing sector is excepted because it does not extract or hold fossil fuel reserves.)

b)     Trillium Asset Management, Extracting Fossil Fuels From Your Portfolio. Lists major profitable companies which could mirror coal, oil and gas stocks as far as return.  http://www.trilliuminvest.com/news-articles-category/recent-commentary/extracting-fossil-fuels-from-your-portfolio-a-guide-to-personal-divestment-and-reinvestment/

 

2. Studies show screening out fossil fuels is safe

Studies by financial firms show that the risk added by taking coal, oil and gas stocks out of retirement funds is very low.  A study by the Aperio group puts the added risk (just risk) at 0.0101 percent.

Citations:

a)     Aperio Group, Do the Investment Math: Building a Carbon-Free Portfolio, 2013. http://www.aperiogroup.com/system/files/documents/building_a_carbon_free_portfolio.pdf (p.4)

b)     Impax Asset Management, Beyond Fossil Fuels: the Investment Case for Fossil Fuel Divestment, July 4, 2013. http://www.impaxam.com/media/178162/20130704_impax_white_paper_fossil_fuel_divestment_final.pdf

c)      Advisor Partners,  study (free registration to view it) http://www.advisorpartners.com/fossil-fuel-divestment-risks-and-opportunities/

 

3. Fossil-free portfolios are performing well

A number of individuals and organizations, like Unity College, Sterling College and the Wallace Global Fund, have divested from fossil fuels already, and they’re doing better than the market average.  Several financial firms have run simulations showing that if you had screened coal, oil and gas stocks out of your portfolios five to ten years ago, you’d have gotten as good of a return — or better.

Citations:

a)     Unity, Fall 2013. “[D]ivesting from investments in fossil fuels have not harmed Unity’s portfolios.” http://issuu.com/unitycollege/docs/fall_magazine/1, p18.

b)     Aperio Group, Do the Investment Math: Building a Carbon-Free Portfolio, 2013. http://www.aperiogroup.com/system/files/documents/building_a_carbon_free_portfolio.pdf (p5)

c)      Stephanie Leighton, email, January 15, 2014: “At Trillium Asset Management, Fossil Fuel Free portfolios have performed in line with the S&P1500 benchmark —net of fees — since inception in January of 2007.”

d)     Impax Asset Management, Beyond Fossil Fuels: the Investment Case for Fossil Fuel Divestment, July 4, 2013. Impax Asset Management tracked the past seven years of international equity markets, showing that if fossil fuel companies are removed from the MSCI World index, then the resulting portfolio would have made 2.3% per year. A portfolio with fossil fuel companies like Exxon and Chevron would net an average annual return of 1.8% for the same period. http://www.impaxam.com/media/178162/20130704_impax_white_paper_fossil_fuel_divestment_final.pdf (p.5)

e)     MSCI looked at the impact of excluding companies owning carbon reserves from the MSCI All Country World Index (MSCI ACWI). It determined that over a five-year period the active return differential was 1.2% better for the same index without the fossil fuel investments. (June 2013; updated December 2013) http://www.msci.com/resources/factsheets/MSCI_ESG_Research_FAQ_on_Fossil-Free_Investing.pdf (p.5)

f)      MSCI published a broader analysis in December 2013 looking at several investment scenarios that reduced exposure to fossil fuels, and a backtest of a fossil fuel divestment scenario outperformed the MSCI ACWI benchmark. http://www.msci.com/resources/factsheets/MSCI_ESG_Research_Issue_Brief_Options_for_Reducing_Fossil_Fuel_Exposure.pdf (p.3)

 

4. Coal is in decline

Given that all the cheap coal has been mined, and that the U.S. and other countries are imposing clean-air and emissions restrictions on power plants and mines, financial experts are downgrading the investment prospects for coal.

Citations:

a)     Goldman Sachs, The window for thermal coal investment is closing, July 2013. http://thinkprogress.org/wp-content/uploads/2013/08/GS_Rocks__Ores_-_Thermal_Coal_July_2013.pdf

b)     Wall Street Journal, Chinese Demand for Coal is Cooling, September 22, 2013. http://online.wsj.com/news/articles/SB10001424127887324886704579052970699081290

c)      Seeking Alpha, King Coal: Fading U.S. Coal Exports Does Not Augur Well for the Industry, September 19, 2013 (free registration required). seekingalpha.com/article/1703072-king-coal-fading-u-s-coal-exports-does-not-augur-well-for-the-industry

d)     Bloomberg, Coal Seen as New Tobacco Sparking Investor Backlash: Commodities, November 20, 2013.  http://www.bloomberg.com/news/2013-11-20/coal-seen-as-new-tobacco-sparking-investor-backlash-commodities.html

e)     University of Oxford, Smith School of Enterprise and the Environment, Stranded Assets Programme, Stranded Down Under:  “In summary, for a number of reasons China’s coal consumption is unlikely to grow as fast as expected. As China has a significant influence on coal prices this will result in downward pressure on coal prices. ” http://www.smithschool.ox.ac.uk/research/stranded-assets/Stranded Down Under Report.pdf (p.65)

f)      ThinkProgress, Goldman Sachs Sells Its Stake In What Would Be The Largest Coal Terminal On The West Coast, January 8, 2014. http://thinkprogress.org/climate/2014/01/08/3132821/goldman-sach-divests-coal/

g)     Investing Daily, The Outlook for 2014, January 7, 2014: “There are a few US coal [Master Limited Partnerships], many of which have seen their market caps decimated in the past 2 ½ years. Most MLP investors should avoid this sector, as more restrictive EPA regulations and competition from natural gas and renewables will continue to put pressure on coal producers.” http://www.investingdaily.com/19171/the-outlook-for-2014/

h)     Energy China Forum, China shift may mean coal days are numbered, August, 21, 2013: “Mr Paolo Coghe warned that if the Chinese economy was slowing down, China could become a net exporter of coal, which would be very negative for prices.” http://www.energychinaforum.com/news/74804.shtml

i)       Washington Post, Coal’s burnout: Have investors moved on to cleaner energy sources?, January 1, 2011.  “’Coal is a dead man walkin’,’ says Kevin Parker, global head of asset management and a member of the executive committee at Deutsche Bank. ‘Banks won’t finance them. Insurance companies won’t insure them. The EPA is coming after them. . . . And the economics to make it clean don’t work.’” http://www.washingtonpost.com/wp-dyn/content/article/2011/01/01/AR2011010102146.html

 

5. Natural gas’ future is unpredictable

Hydraulic fracturing (fracking) technologies led to a recent boom in natural gas extraction in the U.S., but natural gas’ future doesn’t look so bright.  With fracking putting more local water supplies at risk of contamination, homeowners, insurance companies, and local governments have begun to fight back. As citizens and governments rein in an industry gone wild, gas won’t be as good an investment.

Citations:

a)     Financial Times, Shale boom leaves investors underwhelmed, January 5, 2014. http://www.ft.com/intl/cms/s/0/127effba-73ca-11e3-beeb-00144feabdc0.html (free registration required)

b)     Bloomberg, Shale Grab in U.S. Stalls as Falling Value Repels Buyers. August 18, 2013. http://www.bloomberg.com/news/2013-08-18/shale-grab-in-u-s-stalls-as-falling-values-repel-buyers.html

c)      Philly.com, Pa. Supreme Court jolts shale industry. December 21, 2013. http://articles.philly.com/2013-12-21/news/45419865_1_gas-act-act-13-marcellus-shale-coalition

d)     Rolling Stone, The Big Fracking Bubble, March 1, 2012: http://www.rollingstone.com/politics/news/the-big-fracking-bubble-the-scam-behind-the-gas-boom-20120301

e)     Headwaters Economics, Long-Term Energy Development Has Negative Impacts on Western Counties, December 2013: “[W]hen fossil fuel development plays a role in a local economy for a long period of time there are negative effects on per capita income, crime rates, and educational attainment.”   http://headwaterseconomics.org/energy/western-counties-fossil-fuel-development

f)      Food and Water Watch, The Social Costs of Fracking: A Pennsylvania Case Studyhttp://documents.foodandwaterwatch.org/doc/Social_Costs_of_Fracking.pdf

g)     There a number of studies either completed or underway which show methane emissions could potential negate any climate benefits from a shift away from coal and even accelerate climate impacts in the long run. http://www.climatechange2013.org/images/uploads/WGIAR5_WGI-12Doc2b_FinalDraft_All.pdf http://link.springer.com/article/10.1007%2Fs10584-011-0061-5

h)     The White House, A Strategy to Cut Methane Emissions, March 28, 2014.  http://www.whitehouse.gov/blog/2014/03/28/strategy-cut-methane-emissions

i)       Food and Water Watch, Anti-Fracking Movement Map, accessed March 20, 2014.  http://www.foodandwaterwatch.org/water/fracking/fracking-action-center/map/

j)       CBS Los Angeles, City Council Passes LA ‘Fracking’ Ban, February 28, 2014. http://losangeles.cbslocal.com/2014/02/28/city-council-to-vote-on-la-fracking-moratorium/

k)     Boulder Weekly, The fracking/real estate conundrum, December 12, 2013.  http://www.boulderweekly.com/article-12047-the-fracking_real-estate-conundrum.html

 

6. Renewable energy will soon be cheaper than fossil fuels

By 2020, in most places, it will be more profitable and faster to install renewable energy than to build a coal, oil or gas plant.  This will reduce the value of coal, oil and gas stocks.

Citations:

a)     International Energy Agency, Renewable Energy Medium-Term Market Report 2013. “[O]nshore wind and solar PV – have reached, or are approaching, competitiveness in a number of markets without generation-based incentives. In some markets with good resources, the levelised cost of electricity (LCOE) for onshore wind is competitive or close to competitiveness versus new coal- and natural gas-fired power plants.” http://www.iea.org/Textbase/npsum/MTrenew2013SUM.pdf

b)     TheEnergyCollective.com, Why have IEA Renewables Growth Projections Been So Much Lower Than the Out-Turn?, October 14, 2013. http://theenergycollective.com/onclimatechangepolicy/286586/why-have-iea-s-projections-renewables-growth-been-so-much-lower-out-tur

c)      Bloomberg, Renewables Investment Seen Tripling Amidst Supply Glut, April 21, 2013. http://www.bloomberg.com/news/2013-04-21/renewables-investment-seen-tripling-amid-supply-glut.html

d)     Energy Post, How the IEA exaggerates the costs and underestimates the growth of solar power, March 4, 2014.  http://www.energypost.eu/iea-exaggerates-costs-underestimates-growth-solar-power/

e)     RenewEconomy, Bugger the utilities: wind and solar will be built anyway. July 25, 2013 http://reneweconomy.com.au/2013/bugger-the-utilities-wind-and-solar-will-be-built-anyway-74216

f)      ThinkProgress, Solar is Ready Now, “Ferocious Cost Reductions” Make Solar PV Competitive, June 9, 2011. http://thinkprogress.org/romm/2011/06/09/241120/solar-is-ready-now-“ferocious-cost-reductions-make-solar-pv-competitive/

g)     Wall Street Journal, Norway to Raise Oil Fund’s Exposure to Renewable Energy, March 13, 2014.  http://online.wsj.com/news/articles/SB10001424052702304914904579437082858746804

h)     U.S. Energy Information Administration, Levelized Cost of New Generation Resources in the Annual Energy Outlook 2013, January 28, 2013. http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

 

7. When the carbon bubble bursts, fossil fuel stocks will plunge

Fossil fuel companies hold five times more coal, oil and gas reserves than can be safely burned without creating out-of-control climate change and more extreme weather.  With countries establishing policies to curb climate change, these reserves most likely can never be burned.  According to financial analysts at HSBC, Citi, the London School of Economics, and others, this will reduce the value of fossil fuel stocks by 40 to 60 percent.  Remember how the housing bubble and subsequent recession forced people to delay their retirements when their pensions lost value?  Experts estimate that this “carbon bubble” is at least twice as large.

Citations:

a)     The Guardian, Carbon bubble will plunge the world into another financial crisis – report, April 18, 2013. http://www.theguardian.com/environment/2013/apr/19/carbon-bubble-financial-crash-crisis

b)     HSBC Global Research, Oil and carbon revisited: Value at risk from ‘unburnable’ carbon reserves, January 25, 2013. http://gofossilfree.org/files/2013/02/HSBCOilJan13.pdf

c)      Standard & Poors, What A Carbon-Constrained Future Could Mean For Oil Companies’ Creditworthiness, March 1, 2013. http://www.carbontracker.org/wp-content/uploads/downloads/2013/03/SnPCT-report-on-oil-sector-carbon-constraints_Mar0420133.pdf

d)     Financial Times, Investors warn moves to curb climate change will hit fuel demand, October 24, 2013. http://www.ft.com/intl/cms/s/0/28b61824-3cb9-11e3-a8c4-00144feab7de.html

e)     Salon.com, Beware of the carbon bubble: The biggest threat you haven’t heard of yet, December 23, 2013.  http://www.salon.com/2013/12/23/beware_of_the_carbon_bubble_the_biggest_threat_to_the_environment_you_havent_heard_of_yet/

f)      Financial Times, Norway spurs rethink on fossil fuel companies, March 4, 2014.  http://www.ft.com/intl/cms/s/0/4b1c89dc-a313-11e3-ba21-00144feab7de.html