"Major Pension Funds Push Fossil Fuel Companies To Address How They’ll Deal With Climate Change"
CREDIT: AP/Jeff Chiu
Leaders of some of the largest pension funds in the U.S. are calling on fossil fuel companies to detail how they will manage the switch to cleaner energy, worried that the companies won’t be as profitable in the future as the world shifts away from oil and coal and towards clean energy.
The 70 funds are asking 45 of the world’s largest oil, gas, coal and electric companies to conduct detailed studies of how policies to curb climate change will impact the fossil fuel business. The funds notified the fossil fuel companies of their wishes last month, and asked for the studies to be finished by spring 2014. The push is being led by Ceres, a network of investors, companies and public interest groups that’s been outspoken about climate change’s threats to the insurance industry in the past, and the Carbon Tracker Initiative, whose goal is to “improve the transparency of the carbon embedded in equity markets.”
Carin Dehne-Kiley, the director of Corporate Ratings for Standard & Poor’s, told the AP that the financial clout of the pension funds makes it more likely that the fossil fuel companies will comply with their requests. So far, 30 fossil fuel companies have responded to the pension funds’ letters, but it’s unclear so far how many will agree to complete the studies.
The request comes as pressure on governments, organizations and universities to divest their stock from fossil fuel companies increases. This week, the Ann Arbor city council in Michigan approved a resolution to divest its stock from fossil fuels. A recent University of Oxford study found that the campaign for fossil fuel divestment is growing more quickly than any previous divestment campaign and could end up being a significant threat to fossil fuel companies.
“Stigmatisation poses a far-reaching threat to fossil fuel companies — any direct impacts of divestment pale in comparison,” Ben Caldecott, a research fellow at the University of Oxford and an author of the report told the Guardian. “In every case we reviewed, divestment campaigns were successful in lobbying for restrictive legislation.”
But not all news has been good news on the divestment front — this month, Harvard University announced it would not be purging its investments of fossil fuels.