Citing climate change as a major threat, one of the world’s largest insurance companies has pledged to drop its remaining investment in coal assets while tripling its investment in green technologies.
At a business and climate change conference held this week in Paris, AXA — France’s largest insurer — announced that it would sell €500 million ($559 million) in coal assets by the end of 2015, while increasing its “green investments” in things like renewable energy, green infrastructure, and green bonds to €3 billion ($3.3 billion) by 2020.
During the announcement on Friday, AXA’s chief executive Henri de Castries spoke about the threat that climate change poses to the environment, and the responsibility of insurance companies to deal with those threats. Last year, AXA paid over €1 billion ($1.1 billion) globally in weather-related insurance claims, citing climate change as a “core business issue” already driving an increase in weather-related risks.
Syracuse University announced Tuesday that it is formally divesting endowment funds from coal mining and other fossil fuel companies.
SU will continue to seek investments through its endowment in companies that are focused on developing new technology involving solar energy, biofuels and advanced recycling, according to an SU News release.
This commitment means that SU will not “directly invest in publicly traded companies whose primary business is extraction of fossil fuels.” External investment managers at SU will also be directed to halt investments in these public companies, according to the release.
The UN organisation in charge of global climate change negotiations is backing the fast-growing campaign persuading investors to sell off their fossil fuel assets. It said it was lending its “moral authority” to the divestment campaign because it shared the ambition to get a strong deal to tackle global warming at a crunch UN summit in Paris in December.
“We support divestment as it sends a signal to companies, especially coal companies, that the age of ‘burn what you like, when you like’ cannot continue,” said Nick Nuttall, the spokesman for the UN framework convention on climate change (UNFCCC).
Many reasons have been provided for the dramatic plunge in the price of oil to about $60 per barrel (nearly half of what it was a year ago): slowing demand due to global economic stagnation; overproduction at shale fields in the United States; the decision of the Saudis and other Middle Eastern OPEC producers to maintain output at current levels (presumably to punish higher-cost producers in the U.S. and elsewhere); and the increased value of the dollar relative to other currencies. There is, however, one reason that’s not being discussed, and yet it could be the most important of all: the complete collapse of Big Oil’s production-maximizing business model.
Now it’s time for the fossil fuel divestment movement to escalate and force our college administrators to answer that question. We’ve petitioned. We’ve met with our administrators. We’ve demonstrated our power with rallies and marches. Coming up on the four year anniversary of the first calls to divest, we are now in the same place as Harvard’s living wage campaign was in 2001, and as Columbia in 1968 and 1985. This spring, we are taking the next step to ask our administrators whose side they are on, because neutrality is no longer an option: either they will side with perpetrators of the climate crisis, or with the students, faculty, and alumni they claim to support. There is no middle ground.
Markets and governments are converging to address climate change. As scientific evidence and government actions strengthen, investors and financiers are reducing the exposure of their portfolios to risks from rising greenhouse-gas emissions. They are allocating more capital to low-carbon activities and less to carbon-intensive industries.
In September 2014, banks, insurance companies, charities, and pension, mutual and endowment funds announced that they would direct an extra US$125 billion per year until 2020 to investments that address climate change. Fossil fuels are being divested from by influential funds, including the Rockefeller Brothers Fund of New York, and universities in the United States, the United Kingdom and Australia.