12 cities, representing over 36 million city residents, pledged to divest from fossil fuel companies and advocate for greater sustainable investment as part of their commitments to accelerating a green and just recovery from COVID-19. Signatories pledged to use their financial might to promote a just and clean energy transition through concrete actions at the city, national, and international levels.
C40, a network of the world’s largest cities with commitments to divest as ways of addressing climate change, announced recently that the newest signatories to “Divesting from Fossil Fuels, Investing in a Sustainable Future” include Berlin, Bristol, Cape Town, Durban, London, Los Angeles, Milan, New Orleans, New York City, Oslo, Pittsburgh, and Vancouver. The declaration champions fossil fuel-free, green finance as a key strategy for rebuilding equitable, sustainable urban economies and increasing resilience against future crises.
The “Divesting From Fossil Fuels, Investing in a Sustainable Future” declaration is a critical next step towards realizing the vision for a Global Green New Deal, announced last October at the C40 World Mayors Summit in Copenhagen, Denmark. Endorsed by a broad coalition of business and labor leaders, youth activists, and civil society representatives, the Global Green New Deal reaffirms a commitment to protecting the environment, strengthening the economy, and building more equitable communities through inclusive climate action.
Through the Global Green New Deal, cities look to cut emissions from the sectors most responsible for the climate crisis – transportation, buildings, industry, and waste – to keep global heating below the 1.5°C goal of the Paris Agreement.
The announcement that these cities would join 96 other C40 cities around the world was unveiled at a virtual Climate Week NYC 2020 event.
Cities signing on to the new declaration commit to build momentum for fossil-free and sustainable investment by:
- Taking all possible steps to divest city assets from fossil fuel companies
- Increasing financial investments in climate solutions to help promote decent jobs and a just and green economy
- Calling on pension funds to divest from fossil fuel companies
- Advocating for fossil-free and sustainable finance by other investors and all levels of government
- Promoting the importance of strong, long-term climate policies and demanding greater transparency
To deliver a green and just recovery, cities are using their commitments to divest as part of their unique influence to drive high-return investments in the green economy. Already, these are estimated to yield average returns of 6.9% per year for sustainable funds, as opposed to 6.3% per year for traditionally invested funds.
Mayors recognize that these forward-thinking investment strategies have significant potential to create jobs, safeguard against climate risk, and facilitate a decisive shift to the clean energy economy.
Trends In Energy Investment
According to Energy Policy Tracker, more than $200 billion in COVID-19 recovery funds are being pledged to fossil fuels, though risky investments in coal, oil, and gas are key drivers of the climate emergency. Continued investment in fossil fuels drives emissions that endanger the Paris Agreement goals, jeopardize efforts to limit temperature rise to 1.5°C, and threaten to lock dangerous carbon emissions into economies, especially as governments determine preferred pathways to a covid-19 recovery.
This year alone, the International Energy Agency (IEA) predicts demand for oil will fall by 9%, coal by 8%, and gas by 5%, while solar is expected to grow by 16% and wind by 12%, representing an enormous opportunity for economic growth. Energy investment is set to fall by one-fifth in 2020 due to the COVID-19 pandemic, with pre-crisis expectations of modest growth have turned into the largest fall in global energy investment on record. The 2020 energy investment is at almost $400 billion in capital spending compared with 2019.
Let The Mayors Speak About Their Commitments To Divest
In recent years, city leaders have pushed forward bold sustainable finance initiatives to help accelerate the clean energy transition and align investment behind resilient cities of the future.
In 2018, Mayor Khan and Mayor de Blasio established the Divest/Invest Forum, a first-of-its-kind partnership network devoted to helping urban leaders accelerate effective, efficient divestment and green investment. Earlier this year, C40 mayors also called on national governments to make commitments to divest in response to the COVID-19 pandemic.
The Mayor of London, Sadiq Khan, said:
“The climate emergency remains one of the biggest threats we face. Citizens around the world are demanding action and it’s time for cities to ditch fossil fuel investments and accelerate green investments that drive low carbon jobs. In London we have demonstrated that divestment is possible and indeed essential for our future. Through our work with New York and C40, I’m delighted to bring together 10 more cities to join us in taking Divest/Invest action. Global collaboration will help us shift away from fossil fuels, confront challenges and drive climate action. As the world recovers from COVID-19, we need to work together to ensure a fairer, fossil-fuel-free green recovery.”
Bill de Blasio, Mayor of New York City, said:
“In New York City, we know that taking action on climate change is not optional. As we recover from COVID-19, we must make our cities even stronger. That’s why we’re committed to a green recovery and divesting from fossil fuels, while creating jobs in our communities with investments in clean energy, resilient infrastructure, and environmental justice to secure a livable future for our grandchildren.”
C40 Chair and Los Angeles Mayor Eric Garcetti said:
“We’re in a make-or-break decade for the preservation of our planet and our livelihoods, and C40 Cities are leading the transition to a society and economy that don’t rely on dirty fossil fuels. Our declaration makes a clear statement: if we’re serious about a sustainable, just, and prosperous future, we have to put our money where our mouth is, remove public dollars from companies harming the Earth, and power our cities with bold investments in low-carbon industries.”
The Mayor of New Orleans, LaToya Cantrell, said:
“As a member of the Global Mayors COVID-19 Recovery Task Force and the Mayor of a city that is at the forefront in the battle against climate change, I am proud to sign on to this pledge to divest from carbon-intensive assets. The City of New Orleans embraces clean technologies and a green future, and we are committed to leveraging our financial resources for a more equitable and sustainable economy.”
The Mayor of Pittsburgh, William Peduto, said:
“Working with the C40 team and the network of cities coming together to foster responsible investment practices has been a great asset for our efforts. When we began our work to develop Pittsburgh’s third climate action plan, we realized that our pension fund is one of the most critical tools in advancing a just and clean energy transition, and one that is simply a good economic investment strategy, too.”
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