The world’s biggest fund manager, Blackrock, and global index provider FTSE have teamed up with US environmental charity Natural Resources Defense Council to launch a set of new fossil-free indices in what the Financial Times describes as “a sign that a global campaign against fossil fuels is entering the financial mainstream”.
This is the first time a leading index group specifically excludes fossil fuel companies; and Blackrock is not some small, green socially responsible fund. They are the world’s largest asset manager charged with $4.32 trillion in assets and managing more than 7,000 portfolios. When they put forward a fossil-free fund, you know this movement is going mainstream.
The divestment campaign is moving rapidly sending shockwaves through the system. FTSE managing director Kevin Bourne is quoted as saying: “This is one of the fastest-moving debates I think I’ve seen in my 30 years in markets.”
With the new FTSE index, it’s never been easier to divest. Investors have no excuses to continue channeling funds into fossil fuels with options to divest right in front of them.
The move was prompted by the Natural Resources Defense Council (NRDC), which helped to develop the new set of standards. The fossil-free indices will exclude companies that extract or explore fossil fuels.
Peter Lehner, NRDC executive director, said: “So far it’s been relatively niche players that have divested and that is why this launch is game-changing. What this aims to do is bring the opportunity for fossil fuel-free investing mainstream.”
350.org co-founder Bill McKibben applauded the NRDC:
“NRDC was born in the fire of the first Earth Day, and even as they’ve become a powerful institution that original DNA shines through: with this move they’ve shown great leadership in transforming the divestment debate.”
“They’ve stood up to the oil barons, and they’ve stood up for science: if we’re to slow climate change we have to leave most of our carbon reserves in the ground,and that means we’ve got to take all of our money and our support away from this reckless industry.”