New York City plans to divest $5bn from fossil fuels and sue oil companiesPublished by MAC on 2018-02-04
London lagging far behind
It may be a little premature to assert - as one environmentalist has done - that "New York City [has become] a capital of the fight against climate change on this planet".
However, its plan to divest $5 billion in fossil fuel investment and sue companies like Exxon Mobil, BP and Shell, for their contributions to adverse climate change (no coal companies are cited) puts some other major cities to shame
Among these is London, whose mayor is accused by two environmental groups of procrastination in implementing his earlier pledge to disinvest its Pension Fund of all holdings in fossil fuels by 2020.
Currently, the UK capital has assets in oil, gas and coal that amount to almost £70 million.
New York City plans to divest $5bn from fossil fuels and sue oil companies
Mayor Bill de Blasio: ‘It’s up to the fossil fuel companies whose greed put us in this position to shoulder the cost of making New York safer and more resilient’
Oliver Milman in New York
12 January 2018
New York City is seeking to lead the assault on climate change and the Trump administration with a plan to divest $5bn from fossil fuels and sue the world’s most powerful oil companies over their contribution to dangerous global warming.
City officials have set a goal of divesting New York’s $189bn pension funds from fossil fuel companies within five years in what they say would be “among the most significant divestment efforts in the world to date”. Currently, New York City’s five pension funds have about $5bn in fossil fuel investments. New York state has already announced it is exploring how to divest from fossil fuels.
“New York City is standing up for future generations by becoming the first major US city to divest our pension funds from fossil fuels,” said Bill de Blasio, New York’s mayor.
“At the same time, we’re bringing the fight against climate change straight to the fossil fuel companies that knew about its effects and intentionally misled the public to protect their profits. As climate change continues to worsen, it’s up to the fossil fuel companies whose greed put us in this position to shoulder the cost of making New York safer and more resilient.”
De Blasio said that the city is taking the five fossil fuel firms – BP, Exxon Mobil, Chevron, ConocoPhillips and Shell – to federal court due to their contribution to climate change.
Court documents state that New York has suffered from flooding and erosion due to climate change and because of looming future threats it is seeking to “shift the costs of protecting the city from climate change impacts back on to the companies that have done nearly all they could to create this existential threat”.
The court filing claims that just 100 fossil fuel producers are responsible for nearly two-thirds of all greenhouse gas emissions since the industrial revolution, with the five targeted companies the largest contributors.
The case will also point to evidence that firms such as Exxon knew of the impact of climate change for decades, only to downplay and even deny this in public. New York’s attorney general, Eric Schneiderman, is investigating Exxon over this alleged deception.
What is divestment?
New York was badly rattled by Hurricane Sandy in 2012 and faces costs escalating into the tens of billions of dollars in order to protect low-lying areas such as lower Manhattan and the area around JFK airport from being inundated by further severe storms fueled by rising sea levels and atmospheric warming. De Blasio’s office said climate change is “perhaps the toughest challenge New York City will face in the coming decades”.
New York’s lawsuit echoes a similar effort on the west coast, where two California counties and a city are suing 37 fossil fuel companies for knowingly emitting dangerous levels of greenhouse gases. One of those firms, Exxon, has complained that it has been targeted by a “collection of special interests and opportunistic politicians” as part of a “conspiracy” to force the company to comply with various political objectives.
The legal action and the divestment draw perhaps the starkest dividing line yet between New York and the Trump administration on climate change. Under Trump, the federal government has attempted the withdraw the US from the Paris climate accords, tear up Barack Obama’s signature climate policies and open up vast areas of America’s land and waters to coal, oil and gas interests.
De Blasio and the city comptroller, Scott Stringer, have come under pressure for several years from activists to rid New York’s pension funds of any link to fossil fuels, with some environmentalists claiming the city has been too slow to use its clout to tackle climate change.
Stringer admitted the divestment will be “complex” and will take some time but said the city’s pension funds could promote sustainability while also protecting the retirement of teachers, police officers and other city workers.
“New York City today becomes a capital of the fight against climate change on this planet,” said Bill McKibben, co-founder of climate group 350.org.
“With its communities exceptionally vulnerable to a rising sea, the city is showing the spirit for which it’s famous – it’s not pretending that working with the fossil fuel companies will somehow save the day, but instead standing up to them, in the financial markets and in court.”
Christiana Figueres, former UN climate chief and architect of the Paris climate agreement, added: “The exponential transition toward a fossil-fuel-free economy is unstoppable and local governments have a critical role to play. There is no time to lose.
“It’s therefore extremely encouraging to see NYC step up today.”
New York joins cities such as Washington DC and Cape Town in divesting, along with universities such as Stanford in California and Oxford in the UK. The Rockefeller Brothers Fund, notable for its links to the past oil wealth of John D Rockefeller, has also sought to divest.
London ‘put to shame’ by New York fossil fuel divestment
Campaigners say London mayor has fudged a similar manifesto promise to divest the city’s remaining pension funds from fossil fuels
Divest London has protested over divestment plans.
15 January 2018
London has been put to shame by New York’s decision to divest city pension funds from fossil fuel companies, according to climate campaigners who accuse the mayor, Sadiq Khan, of fudging a similar promise he made during his election campaign.
Global efforts to drive investment away from oil, gas and coal were given a major boost last week when the biggest city in the US announced plans to sell off its $5bn holdings in fossil fuel assets and sue the world’s most powerful oil companies over their contribution to dangerous global warming.
As the home of Wall Street, this had enormous symbolic value and added to the momentum provided last year by divestment proposals from the Norwegian central bank (which runs the world’s largest sovereign wealth fund), and the World Bank’s promise to end funding for oil and gas extraction.
The mayor of London - the world’s other great financial centre - has also pledged action. In his manifesto, Khan said he would “take all possible steps to divest the London Pension Fund Authority (LFPA) of its remaining investments in fossil-fuel industries by 2020.”
City Hall has quietly sold off about half of its fossil fuel assets, but divestment campaigners complain that London’s policies are muted, ambiguous and full of loopholes that could be copied by other institutions.
“While progress is being made in the UK, the New York announcement puts some of the commitments, especially London’s to shame and shows what’s possible with good leadership,” said Danielle Paffard of 350.org, the NGO that has spearheaded the global divestment campaign. “Khan has chosen an approach which essentially lets fossil fuel companies off the hook - both with weak exclusion criteria and by refusing to celebrate and make a political statement with it - while appearing to have ticked off one of this environmental manifesto promises.”
Frustration was evident in November, when environmental activists from Switched on London and Divest London disrupted Mayor’s Question Time to protest at the fact that London still has fossil fuel assets worth £69m and its actions are half-hearted.
City Hall says this criticism is unfair because London pension fund investments in fossil fuel companies have dropped from £130m in 12 months to £69m in 2016-17, which contrasts to the $5bn still invested by New York.
“In London the mayor is delivering one of the strongest and most ambitious divestment plans of any world city, as he promised in his manifesto,” said a spokesperson for the Mayor of London. He will ensure the LFPA honours his commitment to divest from fossil fuel industries and implements all necessary divestment by 2020.”
However, the boldness of the move by New York - which follows similar actions in Berlin, Paris, Copenhagen and Sydney - puts pressure on London to set a more ambitious example for other authorities and institutions in the UK.
Local authorities hold more than £16bn of shares in fossil fuel companies, but with a handful of exceptions - such as Southwark and Waltham Forest - few have promised to divest.
Momentum is mixed elsewhere. One-third of UK universities have divestment policies. The Catholic Church has shed record amounts on holdings in fossil fuels and several Church of England bishops have called for investment to be pulled from ExxonMobil because it misled the world about climate change.
Debates continue among many major investors with critics of divestment arguing a shift away from fossil fuels can be technically difficult, financially challenging or less effective than remaining in shareholders meetings and trying to influence policy from the inside.
The UK government is due to remove one major legal obstacle this year by ending “fiduciary obligations” on pension companies to maximise investment returns. Instead they will be allowed to make decision that that “mirror members’ ethical concerns” and “address environmental problems”.
Campaigners hope the pledge by New York mayor, Bill de Blasio, to use the city’s “loud voice and deep pockets” in the fight against climate change will inspire cities, towns, universities, churches and companies to follow suit.