As the C40 Cities Climate Leadership Group Mayors Summit starts today in Johannesburg, South Africa, 350.org calls on Mayors attending the summit to heed calls for climate action, and join the growing divestment movement spreading rapidly across the US, Europe and Australia.
Since the summit brings together Mayors from around the world to advance urban solutions to global climate change through individual efforts as well as international engagement and collaboration, cities should not invest in companies that profit from fossil fuels, the main cause of climate change.
“With duty to look after the public finances of the worlds’ major cities, Mayors should follow the recent advice given by Jim Yong Kim, President of the World Bank [1], and demonstrate their fiduciary responsibility by freezing new investments in fossil fuels immediately,” said Tim Ratcliffe, 350.org European Divestment Coordinator. “While the many actions to tackle the climate crisis that the C40 network has already taken are highly commendable, if the public money that these mayors are responsible for continues to be invested in burning more fossil fuels, this good work will be rendered worthless.”
Cities within this C40 network represent 297 million people, 18 percent of global GDP and 10 percent of global carbon emissions [2]. Consequently, since cities consume a vast majority of the world’s resources, they are largely responsible for climate change. It is time for C40 to take on new leadership and be part of real, long-term solutions by joining the growing, global divestment movement.
Divestment can have a serious impact and send an important message allowing public officials to act locally to play an important role in mitigating the climate crisis by aligning their financial power with their climate intentions. As the recent report by Smith School of Enterprise and the Environment states, “The stigmatisation process, which the fossil fuel divestment campaign has now triggered, poses the most far-reaching threat to fossil fuel companies and the vast energy value chain.” [3] Any Mayor serious about taking action on climate change should be getting involved with this campaign.
Since 350.org launched the divestment campaign in the autumn of 2012 the movement has spread to over 500 universities, cities, states and religious institutions across the United States, Australia, Canada and Europe, with dozens of cities and institutions already committing to divest. In the US cities already on board with fossil fuel divestment include (among others): Seattle, WA, San Francisco, CA, Berkeley, CA, Richmond, CA, Boulder, CO, Bayfield, WI, Madison, WI, State College, PA, Eugene, OR, and Ithaca, NY. [4]
By joining the momentum that has been generated by the fossil fuel divestment movement on worldwide, local governments throughout cities can make a strong and profound statement – that profiting from climate disruption and its ever-increasing human toll is morally bankrupt and fiscally imprudent.
Europe is already seeing divestment kick off; last July, Norwegian pension fund Storebrand and Dutch bank Rabobank took steps in that direction [5], and Sweden’s cluster of state pension funds are coming under increasing public and political pressure to take into account the growing risk of stranded assets in fossil fuels [6]. These initial efforts to reduce the risk by abandoning coal assets (as in the case of Storebrand) are a great start, but more is needed through further divestment at the city level for example.
“While Germany is viewed as a climate leader on the international stage, the city of Berlin, with it’s continued reliance on coal and continued investments in fossil fuels through its public banks and institutions presents an interesting contradiction to this image,” said Tine Langkamp, divestment organiser in Germany, “We call on the Berlin mayor, Klaus Wowereit, to follow the example of city leaders, such as Seattle mayor, Michael McGinn, and commit to making Berlin fossil free over the next five years.”
Recent developments showcase the impact the divestment campaign is beginning to have on the financial community. Most recently 70 global investors, managing over $3 trillion of assets, have demanded the oil, gas and coal companies asses the risks that climate change poses to their business plans [7]. And just last month, during a summit of financial leaders held at the United Nations, Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), joined the voices calling on investors to get out of high carbon assets [8].
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NOTES TO EDITORS
[1] This January, as the world’s political, business, and financial elite met at the World Economic Forum in Davos, Jim Yong Kim, President of the World Bank, in his speech A Climate Call to Action: Make 2014 the Turning Point touched on the carbon bubble and portfolio risk. “Through policy reforms, we can divest and tax that which we don’t want, the carbon that threatens development gains over the last 20 years,” said Kim, “Financial regulators need to lead, as well. Sooner rather than later, they must address the systemic risk associated with carbon-intensive activities in their economies, made clear, of course, by price signals. Start now by enforcing disclosure of climate risk and requiring companies and financial institutions to access their exposure to climate-related impacts.” He continued, “the so-called ‘long-term investors’ must recognize their fiduciary responsibility to future pension holders who will be affected by decisions made today. Corporate leaders should not wait to act until market signals are right and national investment policies are in place.”
[3] The Guardian Campaign against fossil fuels growing, says study
[4] Further information on the GoFossilFree divestment campaign can be found here:
gofossilfree.org/ and a list of commitments from colleges and universities, cities, counties, religious institutions, and other institutions can be found here: gofossilfree.org/commitments/
[5] BusinessGreen Storebrand ditches fossil fuel assets in pursuit of ‘long term, stable returns’
[6] Financial Times Swedish pension funds urged to dump fossil fuel holdings
[7] The Guardian Investors demand oil, coal and power companies assess climate change risks
[8] BBC World Get your cash out of fossil fuel backed funds says UN climate chief