Author: David

I am an environmental writer, journalist and speaker living in Cape Town, South Africa.

July community update – SA’s first big climate change court case, and Disobedience

IMG_4313We held our second community update for 2017 at 75 Harrington Street on Wednesday 26 July, with around 25 guests attending. (75 Harrington is a community hub and co-working space in the heart of Cape Town; our thanks to Steve Harris and his team, our hosts.

After we’d reiterated the basics of our divestment campaign, Christine Reddell, from the Centre for Environmental Rights, spoke about South Africa’s first big climate change court case – which saw our Minister for the Environment ordered to consider the climate impacts of the proposed Thabametsi coal power station in deciding whether or not to authorise its construction. The judgment confirmed that the information in the initial environmental impact assessment was inadequate for fully assessing the likely climate impacts of Thabametsi. The Minister is now obliged to consider a full climate change impact assessment, and public comment, before proceeding to authorise – or not.

CER believes the judgment will make it increasingly difficult to authorise coal power in South Africa, given their unavoidable impacts, our high levels of vulnerability to climate change, and the availability of cheaper, lower-impact alternatives (wind & solar).

The Thabametsi case is important to our divestment campaign because most of our big SA banks – Nedbank (the ‘Green bank’), Standard Bank, ABSA, and Rand Merchant Bank – are funding Thabametsi with our savings and investment,  despite most having proclaimed their concern over climate change. It’s also funded by the Development Bank of South Africa, supposedly committed to sustainable development, and the Unemployment Insurance Fund – which means that if Thabametsi is approved but later becomes a stranded asset, jobless South Africans stand to lose out.

We also screened the 350.org documentary Disobedience, which tells the stories of communities standing up against fossil fuels around the world – in the Philippines, the US and Germany in particular.

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Cape Town to divest!

Cape Town Mayor Patricia de Lille at a 2011 protest against the proposed 'Secrecy Bill'. Pic: David Le Page.

Cape Town Mayor Patricia de Lille at a 2011 protest against the proposed ‘Secrecy Bill’. Pic: David Le Page.

The City of Cape Town has committed to divesting from fossil fuels! Tucked away in a recent statement about the City’s green bonds, Mayor Patricia de Lille added:

I am taking this a step further and I have informed our Finance Directorate that we are going to divest from fossil fuel assets and companies in favour of greener and cleaner investments which are in line with our vision of a sustainable future. We are going to instruct investors looking after our money not to put our money into fossil fuel-related companies or for it to be used to fund the development of dirty and unsustainable projects. We want our investments to be aligned with our principles of resilience and sustainability.

Fossil Free SA, together with 350 Africa, has been campaigning for the city to divest since late 2016.

Also, following up on our May workshop, we’ve published an oped in Business Day on divestment: ‘Signs are the climate is right for divesting from the fossil fuel industry’.

Come to Fossil Free SA’s next community event on 26 July, 5.30 for 6pm, at 75 Harrington Street, Cape Town, to find out more about how you can join the global movement to divest from fossil fuels.

 

Kevin Coldrey: A personal South African divestment story

KevinColdreyI am an economist by training and worked in the industry for almost a decade before making the decision to change career paths. I am currently furthering my studies, this time focusing on climate change and sustainable development. I hope to use my experience in the corporate sector to drive the change that is needed, looking for ways to incentivise behaviour change financially.

Between 12 and 18 months ago I decided to divest out of fossil fuel-based companies as best I could. I was at the time invested in a resources unit trust in SA, a general equity unit trust in SA, a private share portfolio of SA stocks, and two separate offshore unit trusts.

The decision was based on two factors:

  1. I felt it was my responsibility to contribute to a low-carbon future, and
  2. the returns that I was earning through holding shares like Sasol was being hampered by the commodity downturn; and my outlook for the global energy economy was, and still is, that we will never see the same prices for fossil fuels as we had in the lead up to the global financial crisis because I believe we have turned a corner in renewable energy generation.

My divestment process was hampered by the limited options available to retail investors but I did the following:

  • I sold my holdings in the resources and general equity unit trusts in SA (the general equity unit trust included significant holdings in the likes of Sasol, Anglo American, BHP Billiton, etc).
  • I sold my private shares in fossil fuel-based companies.
  • I kept my two offshore investments as I wanted to hedge my exposure to the Rand which I still believe is due for a further devaluation.
  • I invested in the Nedbank Green Savings Bond which is a guaranteed fixed investment vehicle where all capital raised is earmarked for renewable energy projects in SA.
  • I bought shares for my private portfolio that I felt were less carbon-intensive and where I felt that they were operating in industries that will become more important in the future such as water and agriculture.

If you have a personal divestment story to share with us, please get in touch.

May workshop for investors and fund managers: ‘Fossil fuel divestment: Fad, necessity or opportunity?’

Summary

On 10 May 2017, Fossil Free South Africa convened a workshop for financial services professionals in Cape Town on fossil fuel divestment. The aim of the workshop was to build awareness of climate and carbon risk – and the divest-reinvest movement – amongst financial services professionals, and to catalyse the creation of divested funds and instruments. Judging by broad responses, we succeeded in the first objective, but the second objective – creating new funds – will take a great deal more work, though hopefully the necessary conversations have started. (The background reading for this workshop appears here.) Some video excerpts appear here.

Presentations

Discussion

After the presentations, we divided into four groups for a deeper discussion of some of the issues that had been raised. The discussion was covered by the Chatham House Rule, and is observed in these notes. These are some of the broad points that arose: (more…)

#KnysnaFires and #Capestorm should make South Africans think twice about their savings/investments in fossil fuel companies

Cape Town, 8 June:– It’s difficult to directly link individual extreme weather events like the Cape storm and Knysna fires to climate change.

But ever-increasing extreme weather events like these – and the Cape Town drought – are very much what has been predicted by scientists studying climate change.

Climate change is caused by global warming resulting from carbon dioxide emissions, most of which comes from burning oil, gas and coal.

In South Africa, most of this comes from Eskom, Sasol, and the rest of our coal industry: companies like Anglo Coal, Exxaro, BHP Billiton, Xstrata, Oakbay, and others.

Globally, companies like Shell, BP and Exxon Mobil work to block the development of cleaner energy like wind and solar. Even economics textbooks acknowledge proper climate policies are blocked by the natural resources industries.

If we want a secure future, we should stop investing in these companies.

Around the world, hundreds of institutions (now worth over $5 trillion), led by universities, but including cities like Paris, Melbourne, Oslo and Copenhagen are stopping their investments in fossil fuels.

It’s time to divest in South Africa. Tell your financial services provider you no longer want to be invested in destroying your own future, or in old energy companies that are rapidly losing value in the face of climate change regulation and energy technology change.

Tell your company pension fund trustees you no longer want to be invested in destroying your own future.

#Divest from fossil fuels. Invest in a sustainable future.

Subscribe to Fossil Free SA’s mailing list for more details. Read more about the scope and scale of the global divest-invest movement at gofossilfree.org/commitments.

Coal, oil and gas investments to be phased out, UCT Convocation votes

2 Mar 2017, Cape Town: On Tuesday 28 February, the Convocation of the University of Cape Town overwhelmingly passed a non-binding motion for the university to rid itself of all investments in fossil fuels within five years. Should the university council agree to this motion, it would make UCT the first African University to formally commit to divesting from fossil fuels.

Convocation is a statutory body of the university comprised of all graduates, vice-chancellors and academic staff, which can express opinions and selects six members of Council (the university’s highest decision-making body).

The divestment motion was proposed by David Le Page of Fossil Free UCT, Fossil Free SA and UCT’s own Ethical Investment Task Team. He reminded the gathering of Archbishop Emeritus Desmond Tutu’s 2014 call for UCT to phase out its fossil fuel investments. The motion was seconded by Dr Yvette Abrahams, who spoke of the severe impacts of climate change, especially on African women and vulnerable people, and urged the university to “practice what we teach”.

The UCT Vice-Chancellor, Dr Max Price, said he mostly supported the motion, but requested an amendment to the specific call for divestment within five years, arguing that it pre-empted the ongoing work of the Ethical Investment Task Team. His proposed amendment was narrowly defeated in a vote. Convocation then moved to pass the unamended version of the motion 107 to 25, with 15 abstentions.

Despite being non-binding, Convocation’s endorsement of divestment is significant, as it marks yet another call from the university community to the administration to align the university’s investments with its values. In November, students from the Green Campus Initiative and Climate Action Project met with the Vice-Chancellor to hand over 500 signatures from academics and students calling for UCT to divest.

Concerns that divestment could reduce the university’s income from its investments should not be dismissed, but unless the university discloses the content of its actual portfolios in accord with best practice for public institutions, have not yet been substantiated either. Fossil Free UCT urges the university to move to full disclosure, in accord with the draft recommendations of its own Ethical Investment Task Team, as soon as possible, to allow for more informed discussion of the matter.

Full text of the divestment motion passed by the UCT Convocation on 28 February 2017

The United Nations has called climate change “the largest, most pervasive threat to the natural environment and human rights of our time.” But international commitments to reducing carbon emissions still fall far short of what is needed to limit dangerous climate change. This  unprecedented danger to humanity has inspired a global ethical movement for divestment from fossil fuel companies. At the same time, current international commitments to reduce carbon emissions and rapid technological change have already led many fund managers to reconsider their investments in these potentially stranded assets, while a growing number of studies show that responsible investment portfolios typically offer returns on a par with or superior to, conventional investment portfolios.

The global movement for divestment from fossil fuels on both ethical and prudential grounds now includes over 40 UK and US universities, cities of the stature of Copenhagen, Melbourne, Seattle and Oxford, and the total value of funds that have committed to various forms of divestment now approaches $5 trillion.

Over the past three years, close to five hundred staff, students and alumni have called on UCT to divest, a call that has the strong support of the Department of Environmental and Geographical Sciences, where the University’s climate change research is centred.

This motion commends the University and Council for establishing the Ethical Investment Task Team, and calls for urgent progress in completing the Task Team’s work, in fully disclosing the University and UCT Foundation’s investments in accord with best practice, and in opening the University’s investment decision-making process to representations from all interested parties.

The University’s mission statement commits us to the values of engaged citizenship and social justice. In accord with those values, we now move that the University makes a binding public commitment to phase out, at the least, over no more than five years, all investments in fossil fuel companies listed in the Carbon Tracker Top 200, seeking where advisable alternative investments in renewable energy. We also urge action in making UCT’s own operations and infrastructure more sustainable and carbon neutral.

‘No jobs on a dead planet’

Why South African unions should stop investing in fossil fuels and lobby for a just, planned transition to a green economy.

Briefing compiled by Fossil Free South Africa, February 2017. Contact: David Le Page, david@fossilfreesa.org.za / +27845220968. PDF version here

More jobs: Yes, the fossil fuel industry creates jobs, but it also creates climate change, air and water pollution, substantial corruption, wars, social instability, economic crises and fuel shortages, and destroys arable land — all of which destroy jobs and human wellbeing. A greener economy will create more, better, safer jobs. According to the International Labour Organisation (https://goo.gl/rSryng): “…most studies show that a transition to a low-carbon economy will lead to a net increase in employment”. The Australian Council of Trade Unions (ACTU) has argued for “a planned closure of coal power stations – along with both a jobs and energy plan for the country”, saying it will “create a more prosperous and diversified economy”. (https://goo.gl/k4da08). Renewable energy is now capable of powering developing economies, indeed the whole world, without all the terrible costs of fossil fuels.

Threatened investments: Investments in fossil fuels are losing value in many markets. Even if they do not embrace the moral arguments for divestment, unions still have a fiduciary duty to the members whose funds they manage to understand, manage, and where appropriate, divest, to avoid the multiplying threats to investments in the fossil fuel industry. According to BlackRock, the world’s biggest asset manager: “Investors can no longer ignore climate change. Some may question the science behind it, but all are faced with a swelling tide of climate-related regulations and technological disruption.”

Health and the right to life: Researchers at UCT’s Energy Research Centre estimate that 27,000 premature deaths across South Africa annually (7.4% of all deaths) are currently due to high levels of fine PM (microscopic particles), mostly from burning fossil fuels… and often in poorer communities. Even without climate change, we would still need to shut down the fossil fuel industry.

Human and worker rights: Climate change is a profound threat to Africa. Climate change is a human rights issue, already killing hundreds of thousands of African children every year through malnutrition and disease. Climate change threatens food security. It threatens economic growth and stability, and thereby threatens workers’ job and savings.

The fossil fuel industry is facing multiple, critical threats:

  • Renewable energy (especially wind & solar) is now the fastest growing energy industry in the world.
  • China is moving fast to phase out coal, and its coal use has already peaked.
  • By some predictions, electric cars will mostly replace petrol/diesel in 20 years’ time.
  • The 2015 Paris agreement on climate change saw most countries agree to phase out fossil fuels.
  • Even without these changes, in 50-100 years time at the most, all accessible fossil fuel reserves will be exhausted anyway.
  • Transition away from fossil fuels is inevitable, but a managed, just transition is preferable.

Solidarity and tradition: “An injury to one is an injury to all.” The global divestment movement is led by many people of colour and people of faith, constituencies which overlap strongly with the union movement. The union movement has a social and historical responsibility to stand up for social justice, human rights and good governance. The fossil fuel industry, on the other hand, is extremely corrupt, threatening good governance and worker’s rights as well as human health and the environment.

A just transition from fossil fuels to a greener economy

A “just transition” would bring business, labour and government together to plan for a smooth move away from fossil fuels, as energy companies transform their business models. This transition is already beginning in other parts of the world, as, for example, offshore oil service companies move to servicing offshore wind power installations. Proposed ILO guidelines (https://goo.gl/jdaetC) for this just transition include re-skilling and training, social support and economic diversification. (more…)