On 12 December, 2018, the second anniversary of the adoption of the Paris Agreement, French President Emmanuel Macron, World Bank President Jim Yong Kim, and UN Secretary-General António Guterres convened world leaders for the One Planet Summit. Its purpose was to reiterate how shifting financial wealth away from the fossil fuel industry will contribute to a low-carbon future that will benefit people and livelihoods today and in the future. It was an extraordinary event. World leaders interspersed with Hollywood stars, business moguls and citizens from all parts of the world waiting, often for several hours, for their turn to speak. Theresa May sat for three hours on the stage for her allotted slot. One by one, top world diplomats, former California governor Arnold Schwarzenegger, business leaders like Michael Bloomberg and even former U.S. Secretary of State John Kerry insisted that the world will shift to clean fuels and reduce emissions regardless of whether the Trump administration pitches in or not.
This show, this spectacle was the platform for Macron, Kim, and Guterres to fill a gap in global leadership on climate change. President Macron personally contacted national and business leaders to urge them to make a commitment, warning them that they should “Think long and hard; if you make a commitment, we will hold you to it.” Their speeches were forthright and unequivocal. I wondered if the text from Guterres’ speech was lifted directly from the Divest Invest website: “It is also a fact that fossil fuels remain heavily subsidized – meaning we are investing in our own doom. I have heard it said that the Stone Age did not end because we ran out of stones. We don’t have to wait to run out of coal and oil to end the age of fossil fuels. We need to invest in the future, not the past.”
Many organisations made bold commitments. AXA, the world’s third-largest insurance company, announced further reductions of coal investments by an additional 2.4 billion euros (£2.13 billion). And the World Bank — to meet its Paris commitments faster — said it would stop financing projects involving upstream oil and gas beginning in 2019. The Powering Past Coal Alliance was launched by the U.K. government and brings together 58 actors including eight governments and 24 businesses from around the world, united to speed up the transition away from coal and towards renewable energy. Six of the largest Sovereign Wealth Funds with assets of $15 trillion (French Republic, Kuwait, Norway, Qatar, New Zealand, Saudi Arabia and the United Arab Emirates) have formed a group to develop a framework to guide their investment decisions in line with the Paris Agreement.
In his opening remarks to the summit, President Macron did not mince his words. “We’re losing the battle,” he said. “We’re not moving quickly enough.” The new commitments do not yet fill the gap between the rhetoric of Paris and the goals to limit climate change to less that 2?C. As Macron also said, “We all need to act.”
This agenda is now moving very quickly – social and political acceptability of the use of fossil fuels is changing rapidly. Since the summit, New York City has announced plans both to divest its pension fund from fossil fuels and to bring legal action against five major oil companies. They will seek damages for the costs of infrastructure improvements that they argue are necessary to contend with the effects of climate change. This remarkable announcement characterizes the significance of the shift in public and political opinion and opens the way for more divest invest decisions and law suits. The city’s announcement also brings the total assets under management (AUM) now pledged to divest from fossil fuels to $6 trillion.
2018 and 2019 are two important years to build support for the Paris Agreement. COP24 will take place in Poland in November 2018 and nations will be invited to increase their commitments in their national plans to meet the goals of the Paris Agreement. By the end of 2019, the world must start to reduce greenhouse gas emissions and the use of fossil fuels.
During the next two years, it is vitally important that our political and business leaders get the message that the majority of people in the world want them to act in accordance with the Paris Agreement and that they will be held responsible for the humanitarian and economic consequences of climate change if they fail to do that. At the same time, it is essential to shift a significant proportion of the world’s wealth away from fossil fuels and carbon intensive sectors to climate solutions, including energy access in ways that protect people’s savings and pensions. The draft IPCC report due for publication in October this year states that global warming is on track to breach the toughest limit set in the Paris climate agreement by the middle of this century unless governments make unprecedented economic shifts from fossil fuels.
Divest Invest remains a very effective tool to build the political mandate for this economic shift and move capital away from fossil fuels to climate solutions.
Our goal is to help set up the world for a transition to a cleaner, fairer world powered by sustainable energy that has limited climate change to less than 2?C. By the start of 2020, our goal is for $15 trillion AUM to be pledged to be divested from fossil fuels. This will require new commitments from leading world cities, insurance companies and sovereign wealth funds. We also need endorsement of moral leaders and social influencers – faiths, major trusts and foundations, universities and trusted individuals – and we hope that trusts and foundations around the world will collaborate in a major announcement on Divest Invest at the climate change summit being organised by the Governor of California this September. To be part of this, please get in touch: email@example.com
Sian Ferguson is Trust Executive at the Sainsbury Family Charitable Trusts.
Keywords: climate change