Tuesday, October 23 , 2018, 7:10 pm | Partly Cloudy 66º

 
 
 
 

Letter to the Editor: Fossil Fuel Divestment — A Tsunami Under Way

The movement to persuade a large range of investment sources — foundations, endowments, charities, organizational and governmental pensions, universities, church groups — to rid their portfolios of fossil fuel producers is gathering momentum.

Those participating now include “the Rockefeller Brothers Fund; Stanford, Glasgow and Australian National universities; the British Medical Association; Norway’s Government Pension Fund Global, which has sold off 32 coal companies on climate and environmental grounds; AP4, the giant Swedish pension fund; and many other faith groups, local councils and asset managers. The World Council of Churches has committed not to invest.” “Syracuse University will remove $1.18 billion from direct investments in fossil fuel companies ...” (The Guardian).

Academics Stand Against Poverty, a global group of about 2,000 researchers who study poverty and development, has said: “What does it mean for universities to seek to educate youth and produce leading research in order to better the future, while simultaneously investing in and profiting from the destruction of said future? This position is neither tenable nor ethical. … As academics, we are in the privileged position to understand the risks posed by climate change and to make powerful statements in support of action. We support the student-led divestment campaigns at universities around the world.”

Those who want to do “the right thing” understand how similar these campaigns are to the ones that sought divestment in tobacco, arms and the practice of apartheid in South Africa. They value the health and lives of their progeny over profits. They respect the rights of persons successfully to resist oppressive governments or climate-damaging corporations.

But perhaps the 800-pound gorilla in this room is the prospective monetary collapse of fossil fuel investments.

As the effects of global warming become more and more evident — destruction by drought, wildfires, storms, flooding, diminishing food production, damage to seaside communities from rising waters, etc., etc. — it will inevitably become clearer that coal, oil and gas must be left in the ground. Government regulation will become more severe; the use of renewable fuels will intensify (global investment in renewables increased 17 percent in 2014). And when this inevitable, but readily foreseeable, scenario hits home, the value of these products and of their stocks and bonds will plummet.

Think this is a fantasy?

“ ... the governor of the Bank of England, Mark Carney, has warned that the 'vast majority of reserves are unburnable' and the bank itself is conducting an inquiry into the risk that inflated fossil fuel assets pose to the stability of the financial system.”

“ ... the president of the World Bank, Jim Yong Kim, urges: 'Be the first mover. Use smart due diligence. Rethink what fiduciary responsibility means in this changing world. It’s simple self-interest. Every company, investor and bank that screens new and existing investments for climate risk is simply being pragmatic.'”

“ … the Bank of England’s deputy head of supervision for banks and insurance companies, Paul Fisher, warns ... 'As the world increasingly limits carbon emissions, and moves to alternative energy sources, investments in fossil fuels — a growing financial market in recent decades — may take a huge hit.'”

“ … Hank Paulson … secretary of the Treasury under Bush and former CEO of Goldman Sachs: 'Each of us must recognize that the risks are personal. We’ve seen and felt the costs of underestimating the financial bubble. Let’s not ignore the climate bubble'” (The Guardian).

So for money managers the world over, and for you the individual investor, the inevitable question arises, as it always has: Are you a great timer of market turns? Did you see and avoid the market tumble of 2008?

Perhaps on reflection, you will do as I did. When I found that my mutual fund contained investments in conventional energy companies — the asset allocation of any fund can usually be found online — I asked a company representative which of that company's funds excluded fossil fuel producers from its portfolio. He told me none. I politely notified him that I was transferring my investment to a mutual fund company that did not invest in fossil fuels (see below). I further suggested that he pass up to his superiors my prediction that that company is going to be faced with this request increasingly in the future; that no responsible fund manager can ignore this phenomenon for long.

I have now now transferred my account from that source to Green Century Funds. This mutual fund company, recommended by Bill McKibben, has two funds that focus investment in environmentally responsible entities and do not invest in fossil fuel companies.

(1) Green Century Equity Fund, asset allocation only in stocks

Average total return: 1-Year (12.81%) 5-Year (13.58%) 10-Year (6.40%)
Total operating expense: 1.25%

(2) Green Century Balanced Fund, asset allocation in stocks and bonds.

Average total return: 1-Year (7.20%) 5-Year (10.29%) 10-Year (5.354%)
Total operating expense: 1.48%

A prospectus and further information may be had from the company website

Other than as a new investor, I have no relation or connection with Green Century. I receive no compensation of any kind for having posted this information.

I urge you to join me. Take similar action. And you can help everyone by providing information as to desirable “no fossil fuel” investment sources I've not discovered.

Go Fossil Free is an online source where you can find a campaign to join or learn more about those underway throughout the world.

But above all, please recognize that the very least you can do is to join The Guardian's huge email campaign asking the Bill and Melinda Gates Foundation and the Wellcome Trust to divest their significant portfolios of fossil fuel holdings. 

In the words of Bishop Desmond Tutu: “We can no longer continue feeding our addiction to fossil fuels as if there were no tomorrow, or there will be no tomorrow.”

In the words of Arthur Ashe: “Start where you are. Use what you have. Do what you can.”

William Smithers
Santa Barbara

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