$5trn divestment movement unites against Trump policies

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The $5trn fossil fuel divestment movement has upped its commitments today in a challenge to president-elect Donald Trump’s energy policies, with a coordinated set of announcements from around the globe.

Investment Association chair Helena Morrissey was among the UK-based financial chiefs at the launch of a new report on the scale of the divestment movement, which comes on the one-year anniversary of the Paris Agreement on climate change.

Divestment advocate Ellen Dorsey, executive director of the Wallace Global Fund, says supporters of the movement must step up following the “historic” US election.

“When governments fall short, people step up,” Dorsey says.

Trinity College Dublin is among the European institutions that will commit to divestment today. Its €168.7m endowment has been targeted by student campaigners urging the university to become a fossil fuel free investor.

Speaking on the momentum behind environmentally-responsible investing, Morrissey points out that the asset management industry viewed such policies as an obstacle to fiduciary duty several years ago, whereas now climate risk considerations are viewed as part of the fiduciary duty.

Moreover, asset managers are now finding opportunities in the onset of innovation connected with renewable energy, Morrisey says.

Last month, Legal & General launched the Future World fund, which invests in stocks tilted towards a low-carbon future, she pointed out.

In a separate announcement today, Microsoft co-founder Bill Gates announced the launch of a $1bn fund, which will tackle climate change by investing in clean energy projects.

Trump, who led the Republicans to victory in last month’s US presidential elections, has pledged to revive the country’s coal industry and proclaimed via Twitter that climate change is a hoax created by China.

But figures released today show that institutions and individuals controlling $5.2trn have committed to divestment, more than doubling over the last 15 months.

The analysis by Arabella Advisors shows 688 institutions and 58,399 individuals across 76 countries have committed to divest from fossil fuels.

When the annual report first launched two years ago the movement represented assets of just $50bn, Dorsey points out.

While the movement has historically been led by universities, foundations and religious organisations support is now being found from pension funds, private insurers and banks, representing $4.5trn in assets.

Dorsey says: “From Apartheid South Africa to the climate frontlines, finance is a proven lever for change. Governments should keep their promises, but investors must move their money.”

UN secretary general Ban Ki Moon and former ExxonMobil chief executive turned clean energy advocate Lou Allstadt, as well as charities and institutional investors also backed the commitment.

This week Bank of England governor Mark Carney is set to launch recommendations from the Financial Stability Board’s taskforce on climate risk.