What is Divestment
The goal of divest campaigns is to encourage the divestment of assets and capital investments that contribute to the financing of fossil energy exploitation, and as such to climate change. Public and private financial institutions invest billions in coal, oil and gas companies without considering the climate impacts of their investment decisions. These include state institutions, companies, pension funds, banks, insurance companies, universities, religious institutions etc. These investments not only contribute to the catastrophic impacts resulting from climate change but they are also subject to considerable financial risk. To limit global warming (2 degree goal), the majority of fossil energy reserves needs to stay in the ground, which reduces their financial value. A significant carbon bubble is looming. The share value of fossil fuel companies and global prices of fossil energy are determined in large part by the proven reserves and the assumption that these reserves can be used. To reach the 2 degree goal, regulatory measures are being and will continue to be put in place. This will limit the quantity of fossil reserves which can be burnt and in turn limit the value of the companies involved. Shares of such companies, will become so-called stranded assets. A study conducted by HSBC, shows that the value of companies and investments in the fossil sector could be as high as 40-60%.
The Divestment Movement
In March 2015, The Guardian and 350.org started the #keepitintheground campaign, in which they call upon the two largest global foundations – the Bill and Melinda Gates Foundation and the Wellcome Trust – to divest from fossil fuels. Although Gates has since stated that he does not plan to divest, in reaction to the campaign he pledged to invest 2bn U.S. dollars in renewable energy technologies.
Beyond this, the ecological risk of climate change, the financial risk of a carbon bubble and the issue of ethical responsibility have prompted companies and organisations – primarily in the USA and in parts of Europe – to turn their back on fossil fuels. Countless citizen and student initiatives, platforms and campaigns the world over are trying to convince investors to divest from fossil energy, and financial experts are also beginning to take the issue seriously.
Divesment in Austria
In the framework of EARTHtalks in May, NEONGREEN NETWORK organised both a press conference and a panel discussion on divestment. Additionally, a study is currently underway to assess the level of “carbon exposure” of investors in Austria. In cooperation with the Austrian Climate and Energy Fund, NEONGREEN NETWORK also initiated a divestment round-table, with the first meeting of Austrian environmental opinion-leaders scheduled to take place in summer 2015.
In autumn 2015 a public event is also planned:
A representative from The Guardian will be invited to Vienna, to report on the #keepitintheground campaign and international developments. A panel discussion will be held to present and discuss divestment options and strategies in Austria and the latest results of the ongoing study on the Austrian situation will be presented.