Is the tide turning on fossil fuel divestment? Climate Week featured promises, by some big
mainstream investors, to start divesting from fossil fuels. Notable
announcements included the Rockefeller Brothers Fund, which was
built on the Standard Oil fortune. Europe has more than nine fossil fuel divestment campaigns underway.
And now Bank of England governor, Mark Carney, has
called for investors to report the long-term environmental impacts
of their decisions along with their financial results. He warned
that fossil fuel companies cannot burn all the reserves on their
existing books if the world is to avoid catastrophic climate
Unburnable fossil fuels
According to news reports, Carney told a World Bank seminar on
integrated reporting that the "vast majority of reserves are
unburnable" if global temperature rises are to be limited to
below 2C.The seminar was held during the World Bank's annual
informal climate ministerial on carbon pricing, which for the first
time was also attended by representatives from the corporate
community. Unburnable reserves would have little value, suggesting
that many fossil fuel investments may be over-valued at current
market prices. Meanwhile, the World Bank is leading an initiative
with 73 national governments, 11 regional governments, and more
than 1,000 businesses and investors to build support for a global
price on carbon emissions. A world wide price on carbon would also
be expected to affected the market price of fossil fuel
Fossil fuel divestment spreading
According to a September report from Arabella Advisors, 181 institutions and local
governments and 656 individuals representing over $50 billion
dollars have already pledged fossil fuel divestment. The
Rockefeller Brothers Fund's immediate focus is reported to be
on limiting its exposure to coal and tar sands, with the goal to
reduce these investments to less than one percent of the total
portfolio by the end of 2014.
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