A coalition of 17 philanthropic foundations, with combined assets of nearly $2 billion (£1.2 billion), has pledged to divest from fossil fuels in an effort to tackle climate change.
The announcement is the latest in a series of high-profile divestment moves from the financial community. The Joseph Rowntree Charitable Trust, the Sierra Club Foundation and the Russell Family Foundation are among those behind Divest-Invest Philanthropy, as the alliance is called.
The organisations involved say they plan to “invest in climate solutions and the new energy economy”. They add that simply making grants would lead to solutions falling short.
Their motivation is both moral and financial. They cite “compelling” economic research by the likes of the Carbon Tracker Initiative, whose studies have suggested as much as 80% of the world’s carbon reserves are “unburnable” because of climate change, as reason alone to pull out of all fossil fuel holdings.
The coalition’s website says, “We are foundations divesting from fossil fuels and switching to clean energy investments, joining college, health, pension and religious endowments doing the same.
“Ethically, our investments shouldn’t contribute to dangerous climate change. Financially, fossil fuel stocks are over-valued as most of their reserves cannot be burned. We can get good, safe returns while helping to build a new energy system.”
Ellen Dorsey, executive director of the Wallace Global Fund that is co-ordinating the initiative, told the New York Times that at the very least, the foundations’ philanthropic work should not be undermined by their environmentally-unfriendly investments.
She added, “If you owned fossil fuels in your investment portfolio, it became increasingly clear to foundations that they own climate change, and they’re potentially profiting from those investments.”
The launch of Divest-Invest Philanthropy adds weight to the divestment movement that has gained significant ground in recent months. The environmentalist Bill McKibben and his campaign group 350.org have led the drive, particularly in the US.
In 2013, Norwegian pension fund Storebrand broke ground when it revealed it was divesting from 19 fossil fuel firms. These stocks, it said, would be “worthless financially” in the future. Meanwhile, an alliance of 70 major investors with a collective $3 trillion (£1.85 trillion) of assets called on the world’s largest fossil fuels firms in October to explain how their business models squared with the need for dramatic carbon reduction.
The World Bank, the European Investment Bank, the European Bank for Reconstruction and Development, EU climate commissioner Connie Hedegaard and executive secretary of the UN Framework Convention on Climate Change (UNFCCC) Christiana Figueres are among those to have backed the divestment movement in the last year.
However, despite its increasingly high profile, many in the financial world continue to overlook the risks associated with holding such stocks.
A study from December by the Asset Owners Disclosure Project accused investment funds of failing to properly manage climate risks. It said this subsequently exposed investors to potentially huge losses in the future.
Divest-Invest Philanthropy says philanthropic foundations and investors should assess their exposure to climate risk, talk about mission-driven and sustainable investments and commit to divesting from fossil fuels at a pace “commensurate” with climate change.
Like our Facebook Page
Can You Maximize Your Profits While Investing Ethically?
Environmental Benefits of Living in Miami. Why Is It Worth Moving There?
5 Ways To Shift To Green Energy At Home
Advantages of Free-Range Farming for Eco-Friendly Consumers
What is Eco-Friendly Investing and How Can You Embrace It?
Green Software Ideas to Implement with an Offshore Development Team
5 Things Eco-Conscious Consumers Should Know About Private Wells
The True Environmental and Social Costs of Mined Diamonds
20 Incredible Facts Eco-Tourists Should Know About Dubai
5 Massive Benefits of Turning to Renewable Energy
6 Tips For Getting the Most from a Solar-Powered Home
7 Excellent Ways to Live a Greener Lifestyle in 2021
How the Property Industry Is Embracing Eco-Friendliness Across the Board
Sustainability in Construction: Methods to Mitigate Environmental Impacts
New Company is Driving ESG Infrastructure Development in Mining
10 Tips to Turn Your Next Holiday into an Eco-Friendly Celebration
4 Benefits of Commuting with a Bicycle as an Eco-Friendly Consumer
Some Important Facts about Eco-Friendly Glass Railings
Impact Proof of Stake Ethereum Mining on Power Industry Sustainability
7 Business Survival Guidelines All Eco-Friendly Entrepreneurs Must Follow
- Features12 months ago
Eco-Friendly Interior Design Is Easier Than You Might Think
- Features10 months ago
Eco-Friendly Hacks To Create A Durable Shop For Your Home
- Energy6 months ago
Eco-Friendly Homeowners Lower Carbon Footprints through Greater Air Conditioner Efficiency
- Features5 months ago
Seven Health and Safety Tips for Eco-Friendly Products in a Green Home