Friday 14 February is Valentine’s day. Please send our ‘Stop in the name of love!’ card to East Sussex Pension Fund chair Gerard Fox (in time for 14 Feb) to tell him: ‘It’s time to stop funding climate change.’
Here’s a way to do this in four easy steps:
1. Download and print off this card: https://divesteastsussex.files.wordpress.com/2020/02/valentinecard.pdf
2. Fold it twice so that it says ‘Stop in the name of love!’ on the front and ‘It’s time to stop funding climate change’ on the inside.
3. Sign your card and add your own message as well if you want. See here and below for more some useful background information. Be polite: abusive messages are counterproductive and could be used against the campaign.
4. Put it in an envelope and post it to ‘Cllr Gerard Fox, Hobdens, Wellbrook Hill, Mayfield, East Sussex, TN20 6HH’ in time for 14 February. You might want to write ‘Not to be opened until 14 February’ on the outside.
East Sussex County Council (ESCC) has declared a “climate emergency” but continues to invest £145m of local peoples’ pensions in the giant oil and gas companies that are driving our current climate crisis – companies like Exxon and BP.
These investments are clearly incompatible with any form of climate emergency declaration. They also pose a significant financial danger to the Fund and the Council’s current policy of ‘engaging’ with these companies isn’t working. Ditching these investments (‘divestment’) would remove this danger while enhancing the Fund’s long-term returns by helping to align it with a 1.5°C world.
Damaging our climate
Burning fossil fuels (oil, coal & gas) is the main driver of climate change. Massive reductions in carbon emissions will be necessary before 2030 if the world’s governments are to follow through on their stated commitment (‘the Paris agreement’) to hold global warming to ‘well below’ 2ºC. The vast majority of proven reserves of fossil fuels will have to remain in the ground unburnt.
Yet despite this, the oil and gas industries are forecast to spend $4.9 trillion over the next decade on new oil and gas fields – none of which is compatible with limiting warming to 1.5°C.
A financial danger
The Governor of the Bank of England, Mark Carney, has warned that investors in these industries face ‘potentially huge’ losses from climate change action that could make vast reserves of oil, coal and gas ‘literally unburnable’. According to one recent analysis: ‘Oil and gas companies risk wasting $2.2 trillion by 2030 if they base investment decisions on current emissions policies … instead of planning for continued momentum towards a low-carbon world and [the] ensuing reduced demand for fossil fuels.’
A global energy transition from fossil fuels to low-carbon energy is already underway9. Investors in oil and gas will lose money at the point of peak demand for these commodities10. Carbon Tracker forecast that this will happen in the 2020s.
Engagement isn’t working
The Council’s policy of ‘engaging’ with fossil fuel companies isn’t working. It has no meaningful benchmarks or timelines, little to show in way of achievements and no clear escalation strategies for companies that fail to respond.
Despite many years of ‘engagement’ not a single major oil company has re-aligned its business model with a 2ºC world. Moreover, there are no precedents for a company changing its core business model following pressure from shareholders.
The divestment alternative
Plenty of mainstream alternative investment options now exist which have no or very low fossil-fuel investments. Over 1,100 institutions around the world – collectively managing over $11 trillion – have already made some form of divestment commitment, including several UK pension funds. For example, Southwark Pension Fund made a divestment commitment in December 2016. Since then it has reduced its exposure to fossil fuel companies from roughly 4.8% of the Fund to under 1%.
What needs to happen now
Divest East Sussex is calling on the East Sussex Pension Fund to: (a)immediately freeze any new investment in thetop 200 publicly-traded fossil fuel companies; and(b)divest from its existing investments in these companies within five years.
A fully footnoted version of the above is available here.