The global divestment movement is gaining momentum around the globe, marked by Global Divestment Day on 13-14 February. We take a look at six reasons it makes sense to divest from fossil fuels and some of the alternative solutions already on offer.
Six reasons to divest from fossil fuels
1) Science says so
Victoria University of Wellington’s decision to divest was influenced by international research showing that climate change and ocean acidification will have major impacts on all lifeforms. “It’s important to us that the University aligns its investment decisions with the results of its scientific research and its public stance on climate change,” said Vice-Chancellor Professor Grant Guilford.
2) Responsible investments are outperforming mainstream funds
Overall responsibly invested funds in Australia and New Zealand (those that take environment, social and governance into consideration as well as financial performance of their investments) have outperformed their non-responsible counterparts over the long term. Read more here.
3) Support positive solutions that are creating a more sustainable future
There are lots of companies that are profitable and providing solutions that enable us to move beyond fossil fuels. These include petrol retailers that are investing in biofuels (Gull & Z Energy), clean tech companies, electric vehicle manufacturers and many others. By using your money to actively invest in these solutions you are helping them to continue the great work they’re doing in the world. Scroll down to the end of the article to find out who some of these companies are.
4) Fossil fuel investments could become volatile
Companies holding fossil fuel assets could plummet in value if global action is taken on climate change. An article from the Financial Times last year outlined that fossil fuel investments were “risky”. Britain’s Energy Secretary estimated that the move from a carbon economy to a climate economy could lead to $28 trillion US in lost revenue for the fossil fuel industry.
5) Be a leader in Aotearoa
Fossil fuel investment is rife in New Zealand – even our New Zealand Super Fund is involved, investing around $440 million in fossil fuel direct equity investments across 454 companies, including a NZ$24.5 million dollar investment in Exxon Mobil. The divestment movement is gaining momentum internationally with 24 universities around the world, including SBN member Victoria University of Wellington; 37 cities, including Dunedin City which became the first New Zealand city to divest last year; and numerous other organisations including the New Zealand Anglican Diocese, have committed to divesting.
6) Drive the demand for change
When the banks, pension funds and equity managers consistently start to hear that their customers are demanding non-fossil fuel investments, this investment suddenly becomes a risky option. To follow the money, those entities will have no choice but to divest and diversify what they offer. Even the heirs to the Rockerfeller Foundation squillions are taking action. They withdrew $50 billion US from fossil fuel investments last year, despite the fact that their fortune was made by oil.
Thanks to our members, including Greenpeace, in helping with the compilation of this list.
Alternative energy solutions
Fortunately many NZ businesses are ahead of the game and are already investing in alternative solutions – so make sure you support them. Here are some examples:
- Gull has been selling biofuels at the pumps in New Zealand since 2007. It has sold more than 24 million litres of biofuels across the country, delivering a reduction of 57,000 tonnes of carbon emissions.
- Z Energy is working to reduce New Zealand’s reliance on its products and to reduce its customers’ carbon intensity. It will be rolling out commercially-available biodiesel later this year.
- Mighty River Power has swapped 70% of its vehicle fleet to electric vehicles, with 1000 expected in Auckland by the end of 2015.
- SolarCity has just launched solarZero, an initiative where customers can have solar panels installed for free and purchase solar power at a fixed monthly fee that’s lower than the grid rate. Other solar energy companies include PowerSmart Solar, Reid Technology, Solarcraft, SolarKing and Sunergise International.
- Philips Lighting is leading the transformation from traditional lighting to energy efficient lighting solutions such as LED.
- Energy Alternatives provides integrated energy solutions for homes and business based on investment in clean technology.
- Energy and Technical Services provides energy management services including advice and auditing.
- Energy Solution Providers helps large organisations reduce energy usage through smart data management.
- Greenkeeper Systems has a software tool to conserve energy consumption on desktops.
You can check out the Sustainable Business Directory to find more businesses creating smart solutions in New Zealand.
SBN has a work stream on Accelerating Smart Transport in NZ in which we’re working with businesses to progress practical solutions to reduce reliance on fossil fuels. These include:
- Working with businesses to increase the use of biofuels by 20%
- Working with our members to integrate electric vehicles into their fleets
- Developing an online cycling resource to create safe, effective cycling infrastructure
- Creating working hubs: shared workspaces for local people to use instead of commuting into town, starting with a model hub in Hobsonville.
We’re also working with financial institutions to help them understand responsible investment and have an active role in it. You can find out more about our project on Sustainable Investment here.
Last week we took a look at five ways your business can join the clean energy revolution. Next week we’ll explain what to look for in your financial investments to make sure you’re investing responsibly.