On Thursday 23rd June the UK voted to leave the European Union. Given the EU’s role in negotiating carbon quotas, driving renewable energy and regulating manufacturing it’s clear that this decision will have wide ranging ramifications for the fight against climate change.
But how does this decision impact on our efforts to challenge fossil fuel companies through divestment?
In past decades the UK has staunchly defended its right to set its own financial regulations, most prominently by keeping the Pound. There are some EU agreements which impact on UK investors**, but our view is that the biggest impact on divestment campaigning will be indirect.
In the immediate future it appears that the uncertainty created by the UK’s exit from the EU will reduce the value of investments, including those of the local government pension scheme. These funds exist to provide pensions to 4.6 million people, and those tasked with running the funds will understandably be focussed on shoring up their value.
We should be prepared for investors becoming increasingly risk averse.
One the one hand that could discourage them from listening to new voices like ours, and encourage them to lean on investments which have given reliable profits in the past – that means fossil fuels.
On the other hand investors that have heard our message about the deep risks posed by fossil fuel investments may take the opportunity to rid themselves of such risks – and divest.
In England and Wales a worsening of the outlook for these funds could impact on the UK Government’s proposals to reorganise and “pool” the funds’ investments.
The true picture will not be clear for some time.
What we do know is that in a time of confusion and potentially rapid change, the importance of the public and fund members being involved in how money is invested is greater than ever.
We strongly believe that that withdrawing from polluters and investing in sustainable industries will help funds weather this crisis. By moving money in this way we can also end the carnage caused by the fossil fuel industry.
If it should turn out that campaigning does get harder, that makes it no less vital. Brilliant progress has been made and we mustn’t lose heart.
– 350.org, Friends of the Earth (England, Wales and Northern Ireland), Friends of the Earth Scotland, Community Reinvest