Finance sector warms to fossil fuel divestments after Paris Agreement
LONDON: Global funds are signalling plans to pull out of fossil fuel investments at a significant pace, a study showed, one year on from the Paris Agreement to tackle global warming.
“Pension funds and insurance companies now represent the largest sectors committing to divestment, reflecting increased financial and fiduciary risks of holding fossil fuels,” according to legal group Arabella Advisors, which carried out the report on behalf of global movement DivestInvest.
Over the past 15 months, total assets held by institutions and individuals committed to divesting from fossil fuel companies has doubled to US$ 5 trillion, the report said.
It noted that since Paris, Dutch insurer Aegon has pledged to divest from coal, while Amalgamated became the first US bank to divest from fossil fuels.
The study noted however that some groups have chosen to divest from only one type of fossil fuel, for example coal over oil and gas.
“Other institutions have opted for a sector- based approach: divesting from companies that derive a significant portion of their revenue from coal and/or tar sands companies,” it added.
Publication of the report comes as President- elect Donald Trump looks to withdraw the United States, the world’s second-largest greenhouse- gas polluter after China, from the Paris global climate accord signed by 192 countries in December 2015.
“While... Trump has said he will seek to withdraw the United States from the Paris Agreement, sustained divestment advocacy can help maintain this pressure on US investors,” said Monday’s report.
Welcoming the findings, Christian Aid’s head of private sector engagement, Ken Boyce, said it was “encouraging to see that organisations which want to be responsible members of a future society are recognising this fact and refusing to invest their assets in projects which endanger the safety of our planetary home”.
The Paris Agreement seeks to beat back the threat of global warming, caused mainly by the burning of coal, oil and gas.
The pact calls for the rapid decarbonisation of the world economy – essentially a switch from carbon-intensive to clean energy, especially solar and wind. — AFP