Accelerating International “Divestment”
In recent years, there have been a handful of successful divestment campaigns and a number of major banks and financial institutions have cut investments for high carbon projects and diverted their capital to low carbon projects around the world. At the COP21 Climate Summit in Paris, more than 500 institutions, including financial groups, universities, and public pension funds decided to pull funding from fossil fuel projects; this amounted to over USD 3.4 trillion.
Led by Europe and the United States, many organizations, including financial institutions, have accelerated the divestment movement in order to reduce future risks from climate change. The risks stem not only from climate change, but also from the financial market. When regulations to control CO2 emissions get tightened, the value of assets from fossil fuel business and investments for high carbon projects will drop. These risky assets are called “stranded assets”, which now trigger a change in investment behavior.
On the other hand, there is no obvious signs of divestment in Japan’s economic or financial fields. The Japanese market still follows the line of logic that “Japanese power generation technology is the most efficient and can contribute to the reduction of CO2 in the world.” However, it is not compatible with the Paris Agreement which agreed zero emissions. Despite the belief in Japan that the country is “the most energy-efficient in the world”, it still promotes coal-fired energy. As a result, international community see Japan has been left far behind the global movement, and cannot change.
In light of the Paris Agreement, we have to look at how Japanese energy and coal policy will change in the future.
Example of Divestment* in the World
ING, the biggest bank in the Netherlands, announced it is withdrawing from financing new coal power and mining projects (2015/11/28)
Nineteen (19) French cities have endorsed divestment.
Also the French parliament has endorsed divestment: the French National Assembly adopted a resolution encouraging investors, companies (especially those in which the states owns shares) and local authorities not to invest in fossil fuels anymore. The resolution is the first step to formalizing the policy as law. (2015/11/25)
Ten UK universities, including the University of Surrey, the University of Arts in London (UAL) and Oxford Brookes University, with endowments worth £115m are in the process of moving their money out of fossil fuels ahead of crunch UN climate change talks in Paris later this month. (2015/11/10)
The world’s largest German insurance company, Allianz, has announced its decision to undertake a major divestment action from the coal sector. (2015/11/24)
Citigroup, the parent company of Citibank which is the third biggest bank in the United States, has committed to take a significant though partial step away from banking coal. (2015/10/5)
A parliamentary committee of the Norwegian Parliament voted for instructing the US$900 billion Norwegian Government Pension Fund Global (GPFG) to reduce its exposure to fossil-fuel risk by divesting more of its coal-related holdings. (2015/5/27)
The University of Oxford has ruled out future investments in coal and tar sands from its multi-billion pound endowment. It has thorough screening and due diligence processes designed to select investments that produce long term high returns but also avoid high social and environmental risks. In the UK, the University of Cambridge announced its investment policies on ahead. (2015/5/18)
The Bank of America to end its support for coal projects the company unveiled its new coal phase-out policy at its annual general meeting. The Bank of America is the first international financial institution to become “no-fossil fuel bank”. (2015/5/7)
Harvard University invests its $36 billion endowment and a coalition known as Students for a Just and Stable Future (SJSF) has called for the Harvard Management Company to divest from fossil fuel companies. A coalition known as Students for a Just and Stable Future (SJSF) has called for the Harvard Management Company to divest from fossil fuel companies. They target the top 200 publicly traded fossil fuel corporations. (2015/4/18)
Respecting demonstration of students, the Stanford University Board of Trustees has decided to not make direct investments of endowment funds in coal-mining companies considering investment shift to the cleaner energy in the future. A student-led organization known as Fossil Free Stanford, which is part of a national divestment campaign, will continue their campaign to achieve full divestment from fossil fuels. (2014/5/6)
Divestment is the opposite of an investment. It means getting rid of stocks, bonds, or investment funds that are unethical or morally ambiguous. Divestment campaign addresses to investors to switch off particular capitals, bonds and investment funds. Momentum for divestments have been widely spread into the universities, public funds and various institutions/organizations in Europe and the United States.
Bloomberg, Want to Burn Coal and Save the Planet? Japan Touts a Solution (2015/11/10)