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De Blasio went on to announce the city would start to divest its five pension funds, which held shares worth $5 billion in fossil fuel companies.New York’s action is the first outside California, where San Francisco and five other authorities have also sued a group of fossil fuel companies for damage related to climate change. None of these legal actions, citing “public nuisance”, have progressed much beyond the press release stage, but they are symptomatic of the increasingly aggressive tactics deployed by American environmentalists.

If the legal attacks do not look particularly threatening to the fossil fuel companies, the divestment movement seems, on the face of it, to be gathering momentum. Around the world, institutions worth up to $6 trillion have pledged themselves to divest all or part of their oil, gas and coal holdings. These are mostly publicly-owned pension funds or academic institutions. In the UK more than 60 universities, including Edinburgh, Bristol and Durham, have announced they are divesting, partially or completely. But the bigger names are holding out.

The University of Cambridge has come under particularly heavy pressure from students and staff to divest its £6.3 billion endowment fund. One of the British campaigning groups, People and Planet (those with long memories may recall its first incarnation as Third World First), says £370 million of the university’s money is invested in fossil fuel companies. The university receives research funding from BP, Shell, Exxon Mobil and others. The university’s governing body decided to divest, but, unprecedentedly, was overruled by its council, which sets policy. A divestment working group has been set up and is yet to report its final conclusions — despite being urged to come down on the side of divestment by such luminaries as Dr Rowan Williams, former Archbishop of Canterbury, and Professor Noam Chomsky, the eternal leftist theoretician.

The University of Oxford has adopted a subtler policy in dealing with the pressure from students and academics. It has divested from coal and tar sands — generally regarded as the worst of a bad lot — while maintaining its no doubt rewarding investments in oil companies. And it emphasises its commitment to renewable energy research as well as to investment in green energy companies.

The divestment movement on both sides of the Atlantic generates a great deal of heat but the actual effect on the companies concerned is negligible at best: the shares sold for idealistic reasons are bought by someone else, presumably of a less fastidious cast of mind. For the time being at least, divestment is unlikely to restrict the flow of capital into the targeted companies. And some more thoughtful environmentalists argue that divestment actually reduces their movement’s influence on companies. If you are not a shareholder, you cannot hold management to account, or engage them on future strategy.

An apparently more sophisticated actuarial argument is based on fossil fuel reserves becoming stranded assets. What does it matter if Exxon has 21.2 billion barrels of proven oil reserves if the global shift to zero carbon technology will not allow these reserves to be monetised? The pitch is thus: “Get out of these shares before they lose their worth.”
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June 29th, 2018
11:06 AM
Excellent informed points. Energy does not equal tobacco. It is essential to life and to modern life. Mr. Rockefeller would agree to divesting only after his billions were safe and secure. That is in fact the background of the decision of his pious descendants

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