The fossil fuel divestment movement has come a long way and this increasingly includes mainstream institutions. Banks, insurance companies and investors are all making the case that fossil fuels are dying. Now we are seeing another wave of divestment from municipal governments and academic institution that make it even harder to ignore the impending demise of fossil fuels. The city of New York is divesting roughly $5 billion in city workers’ pension funds from fossil fuel companies. Recently lawmakers that city introduced a resolution that formally demands that the banks, asset managers and insurance giants with which the city government does business divest from oil, gas and coal. This move comes at a time when the oil crash of 2020 is provoking a record number of bankruptcies in the fossil fuel sectors and Banks like JPMorgan Chase, are preparing to seize their assets.
This move is part of an evidence-based approach to position the largest city in the U.S. at the forefront of efforts to combat climate change. Confronting the capital the props up dirty energy bodes well for climate action and for an emerging banking industry that rejects fossil fuels.
Like New York City, Oxford university is seeking a leadership position in climate conscious investments. Oxford is the most recent academic institution to divest. They passed a divestment resolution in April. The resolution requires its endowment fund (with assets valued at over £3bn) to fully divest from fossil fuel companies and avoid future investments in fossil fuel based funds that do not show evidence of plans to zero out their CO2 emissions. The move has been described as an “absolutely historic divestment win” and it is due to the students who were part of the Oxford Climate Justice Campaign. Oxford is a world leading research institute on net zero science, finance and economics. The divestment resolution is one part of a draft sustainability plan for the university.
Investors are also divesting from fossil fuels. One of the most noteworthy is the Rockefeller family. The fund, which manages roughly $130 million, said it would immediately divest holdings in oil, coal companies and tar sands. What makes this divestment so noteworthy is the fact that they earned their fortunes in oil. In 1870 John D. Rockefeller founded Standard Oil which later became Exxon. Citing both practical and moral considerations, the Rockefeller family have decided that now is the time to divest from fossil fuels including Exxon.
“While the global community works to eliminate the use of fossil fuels, it makes little sense — financially or ethically — to continue holding investments in these companies,” the fund said in a statement. “There is no sane rationale for companies to continue to explore for new sources of hydrocarbons.”
In announcing the decision they indicted Exxon for what they called the company’s “morally reprehensible conduct”. They specifically pointed to Exxon’s efforts to conceal information and mislead the public. “Evidence appears to suggest that the company worked since the 1980s to confuse the public about climate change’s march, while simultaneously spending millions to fortify its own infrastructure against climate change’s destructive consequences and track new exploration opportunities as the Arctic’s ice receded,” the fund said. For years members of the Rockefeller family have been calling on Exxon to stop its funding of climate denial. This includes Former Virginia Senator Jay Rockefeller and economist Neva Rockefeller Goodwin.
There are now more than 1,000 institutions that represent over $8 trillion in assets have committed to divestment and more than 43 cities have passed resolutions or ordinances to partially or fully divest from fossil fuels. There are 15 insurers with over $4 trillion in assets that have committed to reducing investments from coal, according to a report by Unfriend Coal and a 2019 Goldman Sachs report stated, “our global energy team believes that the coal divestment movement has been a key driver of the coal sector 60% derating over the past five years.”
Although a laudable part of the solution, we cannot expect that divestment from fossil fuels will end dirty energy. However, when combined with a modern day plague, the efforts of governments, investors, banks, insurers and academic institutions are clearly helping to expedite the demise of a dying industry.