Global eco-movement 350.org called on mayors at the start of the C40 Cities Mayors Summit on Tuesday to divest from the fossil fuels industry in order to end the sector’s grip on governments and financial markets, and hasten serious climate action.
The mayors, along with senior city officials and sustainability experts, are currently attending the three-day summit in Johannesburg, South Africa. This is a biennial gathering of the C40 Cities Climate Leadership group, a network of megacities around the world.
The group aims to advance urban solutions that address climate change, whether through individual initiatives or international collaboration.
Environmental group 350.org commended their initiatives but called for stronger leadership in supporting the growing divestment campaign in Europe, Australia and the United States.
Called the Fossil Free campaign, the divestment initiative has been gaining momentum since 350.org launched it in late 2012. There are now over 500 cities, universities and other organisations supporting the cause, which is to stop investing in firms that profit from fossil fuels, end direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds, and to freeze new investments in fossil fuel companies.
The goal is to achieve this within five years, and to show that fossil fuel investments are no longer sound ventures for the planet, said 350.org.
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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
Tim Ratcliffe, 350.org European Divestment coordinator
“By joining the momentum that has been generated by the fossil fuel divestment movement 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,” they added.
Tim Ratcliffe, European Divestment coordinator of 350.org, said: “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, and demonstrate their fiduciary responsibility by freezing new investments in fossil fuels immediately.”
Kim, in a speech at the World Economic Forum in Davos in January, had prodded leaders and financial regulators to address carbon-related activities. He said, “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.”
The World Bank, as an example, had announced in 2013 that it would no longer support any new coal-fired energy plants except in rare circumstances.
There have been similar divestments in Europe, such as by Dutch bank Rabobank, which decided to stop lending money to shale gas, tar sands and like energy extraction projects in July last year. This was immediately followed by Norwegian pension fund Storebrand, which removed 19 fossil fuel firms from its portfolio. This was a move to ensure stable returns in the long term, Storeband said.
The group 350.org admitted, though, that “while sale of stock might not have an immediate impact on a fossil fuel company, especially one as gigantic as Exxon, what it does do is start to sow uncertainty about the viability of the fossil fuel industry’s business model”.
In the United States, cities that have joined the fossil fuel divestment campaign include Seattle, San Francisco, Berkeley, Richmond in California, Boulder in Colorado, Ithaca in New York, among others.
However, more participation from cities are needed, said 350.org. Cities in the C40 coalition alone represent 10 per cent of global carbon emissions and 18 per cent of global GDP.
“Any mayor serious about taking action on climate change should be getting involved with this campaign,” the grassroots group said.
Divestment is one key solution that can help mitigate climate change, since stopping actual fossil fuel infrastructure projects like power plants, pipelines, and fracking is more difficult, they explained. Divesting will also help support the shift to clean enery and other sustainable investments. And while they are engaged in stopping “destructive projects”, pushing for the Fossil Free campaign will help “loosen the grip that coal, oil and gas companies have on our governments and financial markets,” they noted.
Germany, for example, may be a climate leader on the global stage, but its capital of Berlin is still reliant on coal and such carbon-laden investments, said Tine Langkamp, a 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.”
Similarly, Ratcliffe noted: “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.”
