SNAPSHOT: Fossil Divestment Gains Momentum as Global Finance Begins to Realign
2018 saw major progress in the determined push for fossil fuel divestment and realignment of the world’s financial flows to drive faster decarbonization. But there was still more work to be done.
In September, just ahead of the Global Climate Action Summit in San Francisco, 350.org reported that the global fossil divestment movement had reached US$6.24 trillion in assets under management, a 120-fold increase over four years. And after years of seeing the campaign dismissed as impractical or unrealistic, there was a definite “said it couldn’t be done” tone to 350’s announcement. “Since it was first launched by students as a moral call to climate action in 2011, the fossil fuel divestment movement has grown tremendously in impact and scope, with new divestment commitments from a broad array of institutions ranging from medical associations, to religious institutions, to museums, which are dropping fossil fuel company sponsorships,” 350 noted. “In 2018, the movement also saw new growth outside the United States and Europe, with divestment commitments from Pakistan, India, Fiji, and Bangladesh.”
In the course of the year, Norway edged closer to a decision to drop the $40 billion in oil and gas stocks it holds in its $1-trillion sovereign wealth fund, the mayors of London and New York City urged their counterparts around the world to dump their fossil investments, and New York promised $5 billion in divestment by 2023. The Royal Bank of Scotland cut funding for Arctic oil and tar sands/oil sands projects and tightened up its loan criteria for coal. Irish parliamentarians voted to divest from fossil fuels, UK solar entrepreneur and advocate Jeremy Leggett said the iconic Lloyd’s of London was 25 years late in its decision to divest from coal, and the McGill University senate in Montreal voted in favour of divestment.
Fossil executives searched for public relations strategies to combat the growing divestment movement. BP CEO Bob Dudley called for trillions in new fossil spending and cast climate risk disclosure as a danger to his industry. Big institutional investors demanded a sharper climate focus as colossal fossils entered annual meeting season in late May, but Exxon shareholders still committed a “failure of epic proportions” by declining to set a higher standard for climate risk disclosure.
The big HSBC bank cut off investment in Arctic drilling, tar sands/oil sands, and most coal projects. The world’s biggest insurer, Allianz, dropped its coverage for coal projects, ING announced a new “science-based approach” to aligning its €500-billion lending portfolio toward the Paris targets, and the Financial Times called it a “welcome and logical development” that the insurance industry was backing away from coal and other fossils. “A pressing question,” the paper editorialized, “is whether there are some activities that the global insurance industry should not make possible. Climate campaigners are calling on insurers to stop providing cover for the coal industry, arguing that it is both a moral imperative and a matter of self-interest, given the rising costs to insurers of natural disasters and the havoc global warming could wreak on their business models.” An international campaign urged reinsurers to do the same, and the Institute for Energy Economics and Financial Analysis predicted that “other industrial behemoths” would follow the lead of Tokyo-based conglomerate Marubeni in stepping away from future coal projects.
Changing investor perceptions were pointing toward declining demand for oil. A big U.K. investment fund demanded that the chair of Loblaws resign over the company’s slow response to the climate crisis. Canadian banks were said to be swinging into action as investors demanded a closer look at the carbon risk in their portfolios, but 44% of Canadian companies were still failing to disclose that risk. Low-carbon stock indices were getting more mainstream attention from fund managers, and British Columbia faced scrutiny over its C$1 billion per year in fossil subsidies, largely devoted to building up its liquefied natural gas industry.
But against that uptick in activity, a Sierra Club report in early April showed private banks around the world, including Canada’s Big Five, increasing their fossil fuel investments by 11% and their tar sands/oil sands financing by 111% in 2017. A close connection to fossils was giving Canadian banks a continuing interest in the industry’s continuing growth, and too many big insurers were still undercutting the Paris Agreement with their coal and tar sands/oil sands investments. Multilateral banks were falling short as well, as dollars for fossil projects continued to flow, although the World Bank turned down financing for a new 500-megawatt coal plant in Kosovo, leaving the Kosovar government to seek financial support from the Trump administration.
The rewards for accelerated fossil divestment were clearly sweet. The Global Commission on the Economy and Climate concluded that the post-carbon transition would produce at least US$26 trillion in economic benefits through 2030, create more than 65 million low-carbon jobs, prevent 700,000 premature deaths, and deliver $2.8 trillion in government revenues in a single year. The second edition of French President Emmanuel Macron’s One World Summit delivered a flurry of new financing commitments during Climate Week in New York City, as an investor-led revolution began pulling financing away from fossil fuels. Environmental Defence climate and energy program manager Patrick DeRochie asserted that green investment and fossil divestment go hand in hand, and the CEO of the $300-billion Caisse de dépot et placement du Québec, Michael Sabia, urged big investors to get onboard a multi-trillion-dollar opportunity. Analysts expected breakaway growth for green bonds in 2018, and the Canadian Pension Plan Investment Board closed renewable energy investment deals in India and Ontario.
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With a set of three sweeping executive orders Wednesday, U.S. President Joe Biden launched an abrupt shift from four years of climate denial and inaction. The orders included measures to reduce the country’s greenhouse gas emissions, increase its reliance on renewable energy, accelerate government renewables procurement and research, restore scientific integrity, and begin addressing the searing inequities and environmental justice issues that had been allowed to fester under his predecessor’s watch.
GM Pledges to Phase Out Gasoline and Diesel Cars, SUVs by 2035
Giant U.S. automaker General Motors is declaring an end to new cars and SUVs with gasoline and diesel engines by 2035 and promising carbon-neutral operations by 2040, marking what the Washington Post calls “an historic turning point for the iconic American automobile company” and a “future full of new electric vehicles for American motorists.”
CNRL, Imperial, 11 Others Face Rating Downgrades Due to Competition from Renewables
Alberta fossils Canadian Natural Resources Ltd. and Imperial Oil are on a list of 13 big oil and gas companies that may face rating downgrades within weeks, and Suncor Energy was also assigned a negative outlook, after ratings agency Standard & Poors shifted its risk assessment for the entire fossil industry from “intermediate” to “moderately high”.
‘Net Negative’ Claims from Alberta Fossils Underscore Flaws with Carbon Capture
Two Alberta-based fossil companies are reporting that they’ve reached “net-negative” carbon emissions, thanks to carbon capture technology. But while the news sounds promising for CCS—which experts increasingly believe will be necessary to keep average global warming below 2°C—there are still concerns about how emissions reductions are calculated, and how CCS may reduce the incentive to actually reduce emissions.
Critics Weigh Merits of Soil Sequestration-Based Carbon Storage
Soil scientists, carbon credit start-ups, and now U.S. President Joe Biden want to enlist American farmers to fight the climate crisis through soil sequestration. Some, however, are questioning whether the benefits are as advertised, or if the initiative is a dangerous distraction from more proven, heavyweight carbon solutions like peatland restoration and forest protection.
Offsets May Give Big Polluters a ‘Get Out of Jail Free’ Card on Carbon Emissions
Some of the world’s biggest carbon polluters, including colossal fossils Royal Dutch Shell and BP, may be on the verge of receiving a “get out of jail free” card by exerting influence on the design of a new global market for voluntary carbon offsets, DeSmog UK reports.
Fossil Industry’s Oceans Project Falls Flat After Promising Major Plastics Cleanup
Citing lack of capacity, the fossil industry is walking away from its much-touted Renew Oceans project, a flagship in its pledge to spend US$1.5 billion over five years to help clean up the world’s most polluted rivers.
Biden to Pause Oil and Gas Leasing, Emphasize Environmental Justice in ‘Climate Day’ Executive Orders Expected Today
U.S. President Joe Biden is expected to pause new oil and gas leasing on federal lands and waters and unveil an ambitious plan to put environmental justice at the centre of his climate program in a series of executive orders to be signed later today.
Hydro-Québec Lands 88-MW Green Hydrogen Deal with Thyssenkrupp
Provincial utility Hydro-Québec has signed a deal with a division of Essen, Germany-based industrial conglomerate Thyssenkrupp to build one of the world’s biggest green hydrogen plants, an 88-megawatt facility in Varennes that will produce 11,100 tonnes of the product per year.
BlackRock Presses Businesses on Climate Disclosure as Campaigners Push BlackRock to Divest
BlackRock CEO Larry Fink is receiving media play for endorsing net-zero investments in his annual letter to investors, but taking fire from fossil divestment analysts who see little change in what one group calls the company’s “extremely weak coal commitment”.
TC Energy May Survive Keystone Cancellation Unscathed. Alberta Not So Much.
In the wake of U.S. President Joe Biden’s decision to cancel the Keystone XL pipeline, analysts say proponent TC Energy should be able to walk away from the intensely controversial megaproject relatively unscathed. But the same can’t be said for the Jason Kenney government in Alberta, whose eleventh-hour subsidy kept the pipeline alive long enough for Biden to shut it down.
BP Slashes Fossil Exploration Team from 700 to 100 as Shift to Renewables Takes Hold
Colossal fossil BP has cut its oil and gas exploration team from more than 700 geologists, engineers, and scientists to fewer than 100, as new CEO Bernard Looney begins reorganizing the company’s operations in response to the climate crisis.
Time to Move On from Keystone, Ambassador Says, as Biden, Trudeau Talk Climate Cooperation
With U.S. President Joe Biden making climate action a top priority for his new administration, and an analyst warning that the Keystone XL pipeline cancellation will stifle Alberta’s fossil industry for years, Canada’s U.S. ambassador is saying that it’s time to move on and focus on other opportunities in the bilateral relationship.
‘Gas Is Over’, EU Banker Declares, Casting Pall on Ontario Teachers’ Fund’s Net-Zero Plans
A European banking executive’s declaration that “to put it mildly, gas is over” is casting a pall over what should have been a moment of triumph for the Ontario Teachers’ Pension Plan (OTPP)—the release of a new net-zero emissions plan, just a month after the fund became majority owner of Italy’s second-largest natural gas pipeline network.
EVs Surge Toward Mass Adoption as Sticker Price Falls, More Models Enter Market
Two new analyses show electric vehicles approaching a “tipping point” for mass adoption, with global sales rising 43% last year, battery costs plunging, and the number of models available in the United States expected to triple over the next three years.
81% of ‘Removed’ Atmospheric Carbon is Reused to Extract More Fossil Fuel
The global operational capacity of carbon capture and storage (CCS) currently stands at 39 megatonnes (Mt) of CO2 per year, or roughly 0.1% of global annual emissions, with deployment slow and plagued by accidents. And despite its fervid marketing as a climate saviour, CCS today is primarily used merely to extract more fossil fuels.
‘Humiliated’ Kenney Demands Trade Sanctions, Could Sell Pipeline for Scrap as TC Shuts Down Keystone Construction
A “humiliated” Alberta Premier Jason Kenney demanded trade sanctions against the United States, TC Energy cut 1,000 construction jobs, Fox Business and the Wall Street Journal falsely claimed 10,000 to 11,000 jobs lost, and the Keystone XL pipeline was at risk of being sold off for scrap after President Joe Biden signed a Day One executive order cancelling the presidential permit for the intensely controversial fossil megaproject.
Flurry of Biden Executive Orders Returns U.S. to Paris Agreement, Begins Reversing Trump Deregulatory Agenda
News reports Wednesday heralded the dawn of a new era in U.S. climate, energy, and environmental justice policy, as President Joe Biden marked his first day in office by signing a wave of executive orders to begin rolling back four years of deregulation under Donald Trump.
Global Energy Transition Investment Grows 9% in 2020, Hits Record $501 Billion Despite Pandemic
Global investment in the energy transition hit a record US$501.3 billion last year, posting a brisk 9% increase in spite of the severe restrictions created by the COVID-19 pandemic, according to new data released this week by BloombergNEF.
Federal Green Economy Procurement May Kick Off in October, Government Relations Specialist Advises
A Toronto-based government relations specialist is advising clean transition entrepreneurs to tentatively mark October in their calendars for the first signs of federal procurement supporting a Build Back Better agenda.
Canadian Carbon Price Proponent Pushes Back on False Narratives
Those peddling the notion that Canada’s federal government is holding back some portion of the federal carbon tax from its citizens are pushing a false narrative, writes Toronto-based Clean Prosperity, in an analysis that lays out the plain truth: nine out of every ten dollars is returned via taxpayer rebates, with the remainder going to support local emissions reduction projects.
Fossils Create Less than 1% of Canadian Jobs, Making 20-Year Phaseout ‘Very Feasible’, Study Concludes
The Canadian economy has added 42 new jobs for each one it has lost in fossil fuels since 2014, and a 20-year industry phaseout would only reduce fossil employment by about 8,500 positions per year—as many as the country usually creates every 10 days—concludes economist Jim Stanford in an analysis published this week by Environmental Defence.
Biden Brings a Policy ‘Sea Change’, Podesta Tells GreenPAC Webinar
An aggressive program of executive actions and green investments, a White House staffed with “climate champions”, and a concerted effort to rebuild the U.S. government’s scientific capacity and morale will all begin to take shape today with the inauguration of President Joe Biden, former White House counsellor John Podesta said Tuesday afternoon, during a webinar hosted by Toronto-based GreenPAC.
Campaign Promises, Cabinet and Senate Leadership Put Climate at Centre of Biden Agenda
When Joe Biden and Kamala Harris are sworn in later today as the 46th president and 49th vice-president of the United States, they’ll take office with a raft of campaign promises and a team cabinet nominees and committee chairs that hold the potential to deliver fast, decisive action on the climate crisis.
TC Energy Touts ‘Zero-Emissions’ Plan, Kenney Threatens Court Action as Keystone Cancellation Looms
Calgary-based pipeliner TC Energy touted a “zero-emissions” approach to its fossil fuel transportation business, the federal and Alberta government vowed to continue the fight, and Premier Jason Kenney admitted his province stands to lose a billion-dollar gamble as the reality sank in that U.S. President Joe Biden is expected to cancel the Keystone XL pipeline after he’s sworn in later today.
84% of New U.S. Generating Capacity Will Deliver Fossil-Free Electricity This Year
Wind and solar will deliver 70% of new U.S. renewable energy capacity this year, compared to only 16% expected to come from natural gas, while battery storage will vault to 11% of the total, according to new data released last week by the U.S. Energy Information Administration (EIA).
Be Wary of Plans for Direct CO2 Removal, Greenpeace Warns Investors
While direct carbon removal (DCR) technologies like afforestation and direct air carbon capture are showing up in climate plans across the corporate world, it will be sharp emissions reductions, not DCR, that actually will keep a 1.5˚C climate target in view, Greenpeace UK warns in a new report.
Weak Climate Risk Disclosure Puts Canadian Businesses at Disadvantage
With Canadian companies continuing to flout climate risk disclosure regulations, even as many of their global competitors come clean, the CEO of one of the nation’s largest investment managers says the disconnect will come back to burn the economy, particularly as the country struggles to rebuild from the pandemic.
‘Smart Cities’ Hype Enters the Global South, after North American Projects Fall Short
While oft-criticized in North America for promising much and delivering little, the “smart city” concept is gaining a foothold in the Global South—a troubling development for those who worry about the incursions of Big Data, or see the projects as little more than oversized gated communities.
UNEP Calls for Better Funding to Speed Global Climate Adaptation
As the climate crisis accelerates and the Earth nears a fast-approaching “temperature tipping point,” the world’s nations need to speed up their adaptation planning and funding, the UN Environment Programme (UNEP) warns in its latest Adaptation Gap Report.
GM Canada Announces $1-Billion Electric Van Investment in Ingersoll, Ontario
Results of a ratification vote were to be released today after GM Canada and Unifor reached a tentative deal that will see the giant automaker invest C$1 billion to build electric vans at its CAMI plant in Ingersoll, Ontario.
New Exposé Reveals $171 Million in No-Bid Contracts on Site C Hydro Megaproject
Disgraced engineering giant SNC Lavalin and a former BC Hydro chief engineer were among the big winners when the provincial utility awarded C$171 million in sole-source, “no-bid” contracts for its controversial Site C hydropower megaproject, according to an exposé published by The Narwhal last week.
New Ministerial Mandate Letters Lay Out Federal Agenda on Climate, Green Recovery
While the government’s response to the COVID-19 pandemic is still necessarily taking up most of the oxygen on Parliament Hill, climate action and a green recovery figure fairly prominently in a new batch of ministerial mandate letters released last Thursday by Prime Minister Justin Trudeau.
McCarthy: 2021 Could Be ‘Pivotal Year’ for Climate Action
With climate action and ambition accelerating toward the end of last year, in Canada and internationally, and COVID-19 vaccine distribution under way, 2021 could be a pivotal year in the fight to get the climate crisis under control, writes Shawn McCarthy, senior counsel at the Sussex Strategy Group, in a post last week for Policy Options.
Science Must Determine Climate Targets, Business Execs Insist
Forward-thinking executives are calling on their peers in the business world to listen to science in a bid to avert catastrophic global warming. That means investing in low-carbon technologies, supporting carbon pricing, and putting a stop to hollow, disingenuous actions—like making far-future net-zero pledges with no plans or accountability systems in place.
Report Declares Carbon Capture and Storage a ‘Dangerous Distraction’
Anyone banking on carbon capture and storage (CCS) as the silver bullet that will allow for undisturbed continuation of the fossil fuel business had better have (extremely) deep pockets, reports Grist, citing a new study that declares the technology gobsmackingly expensive, wildly inefficient, and a dangerous form of climate-action delay.