Follow the Money: An Unlikely Coalition Fighting Fossil Fuels

Last week in Cape Town, over 1,110 institutions from around the world, with more than $11 trillion in assets under their management, committed to divest from fossil fuel investments.

Cape Town: Last week, a motley coalition of development bankers, insurance and investment companies and pension funds, together with religious groups and NGOs working on climate change and energy mitigation, gathered in Cape Town and announced that over 1,110 institutions around the world, with more than $11 trillion in assets under their management, had committed to divest from fossil fuel investments.

The names include institutions such as Norway’s Sovereign Wealth Fund, the Rockefeller Brothers Fund, Amundi Asset Management, Caisse des Depots (the French public financial institution), New York and Cape Town cities, KfW (Germany’s development bank), the Tate Museum, Allianz Insurance and the World Council of Churches. Banks such as Credit Agricole in France are cutting financing for fossil fuel projects, while insurance companies such as Axa are ending underwriting for coal projects worldwide.

There were more startling announcements by religious groups at the Finance Summit in Cape Town. The Fiqh Council of North America, with over 180 Islamic community groups as members, announced a ruling to immediately divest from fossil fuel and invest in renewable energy, a ruling that Dawood Zwink, vice president of the Islamic Society of North America, called a ‘fatwa’ against fossil fuel investment.

In addition, 22 new Christian organisations under the Global Climate Catholic Movement also committed to divestment. The Indian link, however slim, is a start with the Hindu America Foundation and the Art of Living Foundation agreeing to create an investment index ‘consistent with dharmic values’ that exclude investments in fossil fuels, deforestation and industrial animal agriculture.

Also read: Why Non-Party Stakeholders Could Be Torchbearers of Climate Change Fight

The idea of divestment from fossil fuel stocks is to end coal energy, thus bringing down carbon emissions quickly, while accelerating the transition to renewable energy. The social divestment movement behind this action has progressed as rapidly as the financial numbers being disinvested.

The movement has snowballed amongst the youth of the world, pioneered by the US, after Pennsylvania-based Swarthmore College’s students in 2015 called on their University Endowment Fund to immediately divest from fossil fuels. A group of foundations led by the Wallace Fund subsequently got together with the students to help the movement grow.

In 2012, the global NGO 350.org joined a road tour across 21 cities and 300 campuses in the US and with stops across Asia, Australia and Europe to launch the Fossil Free campaign.

Oxford University student Julia Peck. Photo: Keya Acharya

At Oxford University in the UK, 25-year-old MPhil student of endangered languages, Julia Peck, escalated the Fossil Free campaign right to the doorstep of the 3.4-billion-pound Oxford Endowment Fund, forcing Oxford to divest from fossil fuel investments.

Of Oxford’s 25 colleges, five have divested so far, with others to follow suit, now that the college’s main endowment fund has done so.

Peck came to Cape Town to share her experience. When asked how she managed to find the time to pursue her studies, she said with an innocent smile, “I study better when I have achieved something.”

The Cape Town summit itself was a seemingly unlikely mix of people not usually seen together in the same official circles. Organised by 350.org with partners like Green Faith – a US-based multi-religion group led by an Anglican priest Reverend Fletcher Harper – and another global campaign group called ‘Shine’ which works on ending energy poverty, the summit had 300 guests from 44 countries, representing philanthropic institutions, banking, economists and financial analysts together with representatives from faith groups and NGOs.

The proceedings were bemusing, with presentations interspersed with singing and swaying, not unlike American Christian gatherings, all interspersed with hard financial numbers.

The global fossil free movement is unlikely to have the similar kind of runaway participation or success in India, either with its youth and academies or civil society organisations, given the country’s current political climate of stymieing social movements.

Chairman Dave Archambault, the former tribal chairman of the Standing Rock Sioux Tribe in North Dakota, US, shares his story at the Financing the Future divest-invest summit, 10 September 2019. Photo: Elijah Ndoumbé/CC BY-NC-SA 2.0

But Ajaita Shah, CEO and founder of the Jaipur-based Frontier Markets, believes Indian companies to be one of the leaders in the movement to invest capital in renewable energy initiatives. Her company, which focuses on women as the centre of energy decisions in the household, became profitable in just three years, has 4.9 million rural customers for its clean energy products in Rajasthan and is scaling up shortly to rural Uttar Pradesh, Bihar and Odisha.

Shah says her company’s successful business of rural marketing has now got the attention of banks and equity investment funds in India. “People now see us as a new economy,” she said. “I don’t talk about community participation and financial aid to rural India; I talk about profit.”

The divestment movement has a long way to go yet. While 350.org has written commitments from organisations, there is no system of tracking, yet, where the divested money is now going into, or how much of it is actually going into renewable energy investments.

“The movement was focused on stopping money to fossil fuels. We will now look at how the money can go to end-user low-income energy initiatives,” said Alex Rafalowicz of 350.org, Columbia.

Kumi Naidoo, a South African human rights activist and secretary-general of Amnesty International, believes people are central to the climate change crisis, since it is not solely an environmental issue.

“The only accelerated change strategy we have is to follow the money,” he said.

Keya Acharya is a Bangalore-based freelance journalist, president of the Forum of Environmental Journalists in India.