by I’m one of 10 000 Australian academics who signed an open letter to Unisuper (our industry superannuation fund) calling for a policy of divestment from carbon-based fuels. The first step in such a policy has to be divestment from thermal coal. Purely on fiduciary grounds, getting out of thermal coal is now a matter of cashing out before the assets are completely unsaleable. Just in the last week, here’s a list of investors, ranging from small institutions to financial giants that have made announcements along these lines JP MorganMoody’s (saying that insurance companies should divest to reduce climate litigation risk)The Royal College of PsychiatristsThe Jesuit Order in the UK Creighton University (Jesuit University in the US)Bristol University (UK)Danish pension fund APG
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John Quiggin considers the following as important: environment
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I’m one of 10 000 Australian academics who signed an open letter to Unisuper (our industry superannuation fund) calling for a policy of divestment from carbon-based fuels. The first step in such a policy has to be divestment from thermal coal. Purely on fiduciary grounds, getting out of thermal coal is now a matter of cashing out before the assets are completely unsaleable. Just in the last week, here’s a list of investors, ranging from small institutions to financial giants that have made announcements along these lines
- JP Morgan
- Moody’s (saying that insurance companies should divest to reduce climate litigation risk)
- The Royal College of Psychiatrists
- The Jesuit Order in the UK
- Creighton University (Jesuit University in the US)
- Bristol University (UK)
- Danish pension fund APG (selling its holding in KEPC)
That’s certainly a partial list, indicating that divestment decisions are now being announced on a daily basis, with many more happening quietly.
As the Wall Street Journal reported today, the exodus has reached the point where many coal companies have only a handful of institutional shareholders. These institutions, are too put it mildly, exposed to a lot of risk. And, for any other investors, a divestment decision by one of the remaining institutional shareholders would imply a big drop in the share price and therefore a capital loss.
Part of this flight is the toxic reputational risk associated with coal. As coal industry magazine CoalZoom has observed, reporting a study by Alva Group the bushfire catastrophe has had a huge impact in this respect to the point that
public awareness and a latent activist momentum which may only take one more high-profile incident to trigger concerted action have been built.
Sooner or later (as Moody’s notes above) that concerted action will include attempts to recover the damage caused by carbon dioxide emissions first from emitters, and then from their financiers and insurers.