Fossil fuel divestment has gone on long enough that it seems England’s Prince of Wales, Charles, is even jumping on the bandwagon, amidst a number of other British individuals and institutions.
Prince Charles, Environmental Advocate
The news comes by way of a survey conducted by the Financial Times, which found that “seven foundations, including three of the Sainsbury family’s charitable trusts, say they have decided fossil fuel companies are ‘no longer sound investments’.” And though Prince Charles does not comment publicly on his investments, the Financial Times report a Buckingham Palace insider as saying that “his private investments and his charitable foundation do not have any fossil fuel holdings.”
Prince Charles has been a vocal proponent of climate action over the years. In 2011, Prince Charles, speaking to a Worldwide Wildlife Fund event, warned of a “sixth extinction event” as he asked people to cut down on consumption. At the event, Prince Charles also spoke of his long interest of the WWF: “Perhaps I warmed to your work from such an early age because, from the outset, you stood up for endangered species!”
The Sainsbury Family, Supermarkets to Environmentalism
The Sainsbury family, on the other hand, founded what is the UK’s second-largest supermarket chain. However, as the New Statesman note in a 2000 article, “Of the fifth generation Sainsburys – there are ten – not one works in the business founded by John James Sainsbury and Mary Ann Staples.” As such, the Sainsbury’s have used their wealth for a range of other activities, including the Ashden Trust, which has a £35.7 endowment, and is now beginning to divest from fossil fuels in favour of more environmentally friendly assets.
“We are concerned about protecting our financial returns over the long term and believe that fossil fuels are no longer sound investments,” the group told the FT, explaining that tumbling renewable energy costs and tougher climate regulations were likely to “strand” oil, coal and gas assets.
UK Education Institutions Leading the Way, Maybe
The Financial Times also highlighted The National Trust, the Church of England, and the universities of Oxford and Edinburgh as institutions currently reviewing their shares. However, the news is a little murky for Oxford, according to the Oxford University Fossil Free Divestment Campaign group.
In an update provided on April 28, the group states that “The Oxford University Fossil Free campaign is at a crucial stage,” adding that it is planning a number of events for Trinity term. The update comes over a month after the Oxford University Council met to discuss proposals for fossil fuel divestment, but put off any actual decisions until a further meeting.
However, peer pressure may be enough to convince Oxford University to divest, after news that SOAS, University of London (formerly known as the School of Oriental and African Studies) announced that they would be divesting from fossil fuels within the next three years, making “the university the first in London to fully divest.”
“SOAS is proud to become the first university in London to divest and we hope more universities will follow suit,” said Professor Paul Webley, Director of SOAS. Divestment from fossil fuels will enable SOAS to fulfill its responsibilities as an ethical investor, while continuing to ensure that the School’s investments deliver a financial return. This is in line with SOAS’ commitment to environmental sustainability and an important part of the transition towards renewable energy, which SOAS takes very seriously as an institution.
“As the harmful social and environmental impacts of climate change becoming increasingly clear, these initiatives ensure that SOAS is doing all it can to show leadership on this issue.”
HSBC Addresses ‘Increasing Fossil Fuel Risks’
Possibly the most important news to come out of April in terms of the fossil fuel divestment campaign, however, was Britain’s multinational banking and financial services company, HSBC, which released a report entitled, quite simply, Stranded assets: what next? with the tag-line, How investors can manage increasing fossil fuel risk.
The report’s authors believe that the risk of fossil fuels quickly becoming stranded assets is very real and very near. They note that “the risks of fossil fuel asset stranding could come from energy efficiency and advancements in renewables, battery storage and enhanced oil recovery,” and though “the timing of such structural events is difficult to predict,” investors must now determine what is the best strategy for dealing with possible stranded assets “that captures both climate commitment and fiduciary duty.”
Fossil fuel divestment is obviously an option, but the authors also suggests that “Holding onto stocks allows investors to engage with companies and encourage best practice” — a legitimate suggestion, given the inherent need for fossil fuel energy generation over the next two decades. However, as the authors notes, “there are reputational as well as economic risks to staying invested.”
In the end, there will come a point in time soon where the fossil fuel divestment campaign reaches a plateau in terms of those jumping on board, and those remaining behind in an attempt to “encourage best practice”; however, until that time comes — and there’s no way to gauge when that will be — a lot of energy will be spent encouraging investors to divest from fossil fuel companies in an effort to pave the way for a cleaner future.
Credit to BusinessGreen for providing access to HSBC Research’s report
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