Climate change is the greatest challenge humanity has encountered. Warming in excess of 2°C will have catastrophic consequences [1]. In order to have a chance of staying below this maximum upper limit of warming 80% of known fossil fuel reserves must not be burnt [2].
The fossil fuel industry currently holds vast carbon reserves which if burnt would result in emissions 5 times larger than what it is deemed to be safe [2]. All available evidence suggests that fossil fuel companies intend to burn the reserves within their control. In addition, companies such as Shell are actively trying to discover new reserves, often in environmentally sensitive regions [3].
If it is wrong to damage the world we live in, then it is wrong to profit from that damage. Responsible investors should no longer be profiting from the destructive activities of these companies.
Hackney Council's pension fund currently has £42m invested in fossil fuel companies such as ExxonMobil and Shell [4]. This is at odds with the council's stated commitment to reduce the borough's contribution to climate change and to reduce its emissions by 80% by 2050.
Hackney Council exists to serve the people of the borough, and it must therefore acknowledge the significant risks that fossil fuel investments pose to local residents' financial security and future quality of life. Hackney Council should take a moral, political and economic stand by divesting our money from fossil fuel companies and choosing investments less at risk from climate change legislation and more compatible with our values.
Divestment from fossil fuels would make a powerful statement that the fossil fuel industry is morally and economically unviable, and that the people of Hackney wish to support an alternative, sustainable energy future.
Recent financial studies have shown that divestment from fossil fuels may have a small positive effect on investment portfolios in the short term [5]. Moreover, in the long term these fossil fuel investments will become increasingly risky as the cost of extraction increases and international treaties restrict the use of fossil fuels [2]. Not only does it make moral sense not to invest in the destruction of our planet, it also makes financial sense.
It is illogical to allow pension funds to endanger those whose futures they seek to protect. By divesting from fossil fuels, Hackney Council will join public institutions such as the British Medical Association, Glasgow University, Stanford University, Oxford City Council, Bristol City Council, Oslo, amongst many others, in leading by example to help create a sustainable future for the citizens of Hackney and beyond [6].
References
[1]http://bit.ly/1wqelqp
[2]http://bit.ly/1s9QgyC
[3]http://bit.ly/1r2Y2Qb
[4]http://bit.ly/1DUM1l5
[5]http://bit.ly/13D9fwr
[6]http://bit.ly/12xCgZg
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