Fossil fuel industry still winning the investment war

The campaign to convince investors not to use their money to support the extraction and use of fossil fuels is failing to gain enough converts, experts say.

There’s sobering news for campaigners trying to persuade investors to withdraw their funds from the fossil fuel industry: UK experts say their efforts are unlikely to achieve enough quickly enough.

One expert, using the term often applied to the global energy industry, told a meeting in London: “The incumbency is winning the cold war.”

Senior members of asset management firms and carbon risk specialists were invited this week by a prominent British charitable foundation, Sainsbury Family Charitable Trusts, to discuss the prospects for disinvestment and the attitudes in the City of London to attempts to match investment policies with avoidance of climate change risks.

They say the continued confidence of the industry in the long-term viability of coal, oil and gas − despite the plunging cost of many renewable fuels − means that the UN climate change summit in Paris at the end of the year will fall short of its aims.

More face time

One participant, Mark Campanale, a former fund manager who founded the UK-based Carbon Tracker Initiative, told Climate News Network: “The key question is face time. The fossil fuel CEOs get far more face time with investors than they do with climate scientists, for example.

Do the companies have the right people on their boards? Their approach is to say: ‘There’s doubt about the science. We’re ready to grow.’ And so, by default, they go back to business-as-usual, and Paris will not hit a home run.

Mark Campanale, a former fund manager who founded the UK-based Carbon Tracker Initiative

“There are some signs of hope, but we’re not seeing the City, as a group, changing its attitudes.

“Do the companies have the right people on their boards? Their approach is to say: ‘There’s doubt about the science. We’re ready to grow.’ And so, by default, they go back to business-as-usual, and Paris will not hit a home run.”

There was praise from many speakers at the meeting for the disinvestment campaigners’ commitment and imagination − and especially for Bill McKibben, co-founder of the 350.org campaign, for “brilliantly unleashing the naive energy of a generation of students”.

Others questioned the language of the disinvestment campaign. One said: “The word ‘divest’ is campaigner talk, not a form of language that will advance the argument very far.” Instead, he suggested, it could be better to speak, in unthreatening language, of the need for “portfolio decarbonisation”.

But for many participants it was the basic facts and the simple arithmetic that the campaigners needed to assert.

One said: “The industry argues that the problem is cyclical, and that we’re now at the bottom of the cycle. But we need to know why, with crude oil now at US$55-60 a barrel, Shell is investing in projects that won’t break even until the price has gone back up to about $90 a barrel.”

Cleaner fuels

Another pointed to the rapid decline in the cost of cleaner fuels: “The economics of renewables are already much better than we’re often led to believe. You’re better off investing $100 billion in solar photovoltaics than in Canadian tar sands.”

The foundation that hosted the meeting supports Europeans for DivestInvest, part of a global movement that seeks to encourage charitable foundations and high net worth individuals to divest from fossil fuels and invest 5% or more of their portfolio in climate solutions − including renewable energy, clean technology, and energy efficiency.

In September 2014, more than 360 investors managing over $24 trillion in assets urged world leaders to agree to a strong global climate deal.

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