Published on May 16th, 2017 | by Joshua S Hill0
BMO Global Asset Management To Divest £20 Million In Fossil Fuel Investments
May 16th, 2017 by Joshua S Hill
The asset management company made the announcement on Monday, revealing that it would exclude all companies with fossil fuel reserves from its Responsible Funds range as part of a larger updated climate change policy. The divestment will take place immediately for the company’s Global and Emerging Market strategies within its Responsible Funds range, and will extend to the remaining three UK-based funds by January 1, 2020.
According to BMO, the new divestment policy “comes as investors in ethically screened funds increasingly look to avoid investing in companies involved in fossil fuel extraction, with over $5 trillion in institutional assets having some form of divestment strategy in place” — referencing figures from Go Fossil Free as of April of this year.
“If all current known reserves are extracted and burnt, we know that the world would not meet the 2 degrees temperature limit established under the Paris Agreement,” explained Vicki Bakhshi, Director in the Governance and Sustainable Investment team. “As such, we have come to the view that investment in companies with fossil fuel reserves is increasingly incompatible with the ethical and sustainability objectives of the Responsible Strategies range that we run.”
We know that shares in BHP Billiton will be among those shares sold as part of this new divestment policy, but little else is known currently. However, one interesting point to take away from all of this is the role that the Archbishop of Canterbury, Justin Welby, played in this move. The Church of England — of which the Archbishop of Canterbury is the most senior cleric — has already divested from companies making more than 10% of their revenue from thermal coal or tar sands. It is believed that Welby played an important role in BMO’s new policy as President of BMO’s Responsible Investment Advisory Council.
“This policy is a most impressive piece of work and puts BMO Global Asset Management in the front line as a leader on the issue of climate change,” the Most Revd Justin Welby said. “BMO Global Asset Management’s Responsible Funds range has a set of ethical and sustainability criteria governing which companies the strategies can invest in. These criteria are set by the Governance and Sustainable Investment team.”