The campaign to persuade financial groups to divest shareholdings in fossil fuels firms has won a major victory, with one Dutch bank banning investments in ‘unconventional fuels’ and a Norwegian pension fund divesting from 19 companies.
Storebrand, a financial services group in Norway, said that it was pulling out of the investments in 13 coal and six oil sands companies to ensure “long-term stable returns” because these stocks will be “financially worthless” in the future.
“If global ambitions to limit global warming to less than 2 degrees Celsius become a reality, many fossil fuel resources will become unburnable and their financial value will be dramatically reduced,” Christine Tørklep Meisingset, a Storebrand spokeswoman, said in a press release.
“Exposure to fossil fuels is one of the main sustainability challenges facing business, so for us it is a logical and necessary step to adjust our investments accordingly,” she said.
Storebrand’s announcement came one day after a decision by Rabobank to cease lending money to unconventional energy extraction projects – typically involving shale gas and tar sands – because of the environmental and social implications.
A recent study of 141 US drinking water wells – most from Pennsylvania, where gas production increased by 69% in 2012 – detected methane in 82% of the samples. This suggested that nearby drilling had contaminated local water quality.
Earlier this year, Professor Nicholas Stern judged the risks of an economic crisis stemming from ‘carbon bubble’ investments in fossil fuels as “very big indeed”.
If global warming is to be avoided, environmentalists and scientists say that two thirds of the planet’s fossil fuel reserves must be left underground. But global stock markets continue to bet that it will not.
An economist by trade, Stern authored the 2006 Stern Review which set the then-UK government’s climate agenda
Climate Commissioner Connie Hedegaard has also lent her weight to the campaign, with a call for development banks to divest from fossil fuels shareholdings, as EURACTIV reported yesterday (8 July).