The #InvestFossilFree Campaign
How? Through your pensions and investments
Many of us are investing in the biggest agents of climate change – fossil fuel companies – without realising it, through our pensions and investments. At Fossil Free South Africa, we’re trying to change that. Many of us can “vote” against climate breakdown using our savings – and we’ll probably get more secure returns to boot.
Fossil fuel divestment is a global movement calling for people to withdraw money from investments in fossil fuel companies. With over $40 trillion in endowments and portfolios joining in, it challenges the fossil fuel companies that are contributing the most to climate breakdown. Divesting from climate-breaking investments frees up capital for reinvestment in safer, cleaner, and more ethical options. Divestment is hard in South Africa. But we believe showing asset managers there is demand for fossil-free investments can change that. We’re not asking asset managers to divest 100% overnight – just to create more fossil-free options for the many people who now want them.
What can I do?
Sign a letter to your asset manager/s telling them you support the creation of fossil-free ethical investment funds in South Africa here
Learn more about the #InvestFossilFree campaign below
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#InvestFossilFree Campaign Background
The #InvestFossilFree Campaign aims to build and consolidate public support for fossil-free investment funds by engaging with the clients and decision-makers of leading SA asset managers: Allan Gray, Coronation, Investec, Old Mutual, Sanlam, Stanlib, and the Public Investment Corporation (GEPF).
Some of these asset managers have often told us their clients aren’t interested in this kind of fund. Others haven’t asked. When you sign the letters, you prove them all wrong.
What will we do with the letters?
- We will send these letters to the asset managers,
- request constructive meetings, and
- hopefully give you an opportunity to join meetings to engage in constructive face-to-face dialogue
- If they refuse meetings and still don’t act, we will consider actions such as non-violent protests to build public awareness of these issues and draw attention to their irresponsibility.
We have a track record of success – we led the movement to persuade the University of Cape Town to divest.
Watch our campaign video and view the notes to the video here.
More information and background
Who are we?
We are Fossil Free South Africa, a campaign for fossil fuel divestment and sustainable reinvestment, working to push the fossil fuel industry to clean up its act or close down. Together with students, we helped persuade UCT to divest in 2022. We aim for a just transition for very rapid decarbonisation of our society, via practices and investments that will help secure our human rights, a stable climate and sounder finances.
Divest-invest is a global movement of concerned citizens. Here in SA:
- In 2017 and 2019, we held in-depth workshops with asset managers and retirement funds (asset owners) on divestment.
- In 2018, we ran a social media spotlight campaign which ran alongside our petition to South Africa’s top asset managers, calling on them to provide fossil-fuel-free investments. The campaign highlighted those fighting for a fossil-fuel free future, as well as those most affected by our fossil fuel economy which is causing climate breakdown and violating human rights, and included an advert in the Business Day calling on asset managers to act (but they didn’t).
- In 2019 we started the #InvestFossilFree campaign and started collecting signatures from SA’s top asset manager clients.
- In 2021, we sent a letter to Alan Gray with 115 signatories. Alan Gray refused to create a fossil-free fund. We plan to follow up on this while continuing to collect more signatures and sending letters to other asset managers.
- In 2022, our lead divestment campaign pushed UCT to commit to divestment, and we are now engaging other SA universities.
Frequently Asked Questions
Continued investment in fossil fuels poses the following grave risks to both investors and society at large:
- Continued under-investment in the green economy needed to avert the worst dangerous climate change.
- Continued social licence for an industry that has become very dangerous, exploitative and corrupt.
- Continued decline or crippling of the South African economy by the negative external effects of fossil fuels: climate breakdown, missed development opportunities, economic volatility, deadly air pollution, excessive water use, continued corruption, poor governance (strongly associated with these industries) and global (the fossil-fueled Ukraine war) and regional conflict (the insurgency in Mozambique).
- Loss of returns on investments due to these factors (asset stranding).
- Missed opportunities for investments in the green economy.
Possible sharp loss of capital in a carbon bubble scenario.
- Fund managers are the financial specialists who decide how most of the money you save in your retirement fund or unit trust is actually invested: e.g., how much of it goes offshore, how much is invested in bonds, how much in property, how much in which companies.
- Fund managers have enormous power in society. As one SA asset manager says, asset managers “decide how the valuable savings or resources of a population are allocated for growth and development”. But at the moment, South Africa’s asset managers have effectively allocated many of our resources not for a thriving economy and healthy environment, but for a crippled economy and devastated environment. They didn’t do this maliciously or deliberately. But they’re still applying the investment logic of the 1960s when the evidence is now overwhelming that this is a recipe for disaster. Many of them are very concerned about climate themselves, but say they need you, the asset owners, to first start noisily demanding this kind of change so they can beat institutional inertia.
- None of them, to our knowledge and despite their purported concern over climate change, have meaningfully educated or canvassed their clients on the issue.
- Overseas fund managers do already offer many fossil-free investment options. They’re easy to find if you live in the US, UK, Europe or Australia. The world’s biggest asset manager, Black Rock, has also to some degree made addressing climate change a priority. But there are still no fossil fuel-free options for ethical and responsible South African investors. We have to change this. In the long term, all investment should be responsible (or better regulated).
- So-called ESG investment can be helpful, but can also be a mass smokescreen for inaction and greenwashing. We like ESG mostly only when it leads to outright exclusion of the worst permitters.
South Africa’s biggest asset managers collectively manage over R2.7 trillion. Over 10 million South Africans participate in various forms of collective investment via savings, retirement funds and unit trusts. Even more are connected to financial services. This represents enormous potential power for creative change, if even a small proportion of this capital is redirected towards truly environmentally and socially responsible investment.
Of course. You have standing wherever you have money invested.
We’re still some way from seeing actual fossil-free funds created. It’s possible you may get lower returns, but there are many good reasons to think that fossil-free funds in South Africa can get acceptable or even improved returns. The two substantially fossil-free funds that we are aware of are delivering acceptable performance. Divesting will help protect you against stranded assets and the sharp loss of returns threatened by a possible carbon bubble.
Yes, we’re all still dependent on them. But we have to phase them out very fast, in favour of reduced energy demand and renewable energy sources such as wind and solar. We’re NOT asking that all fossil fuel companies shut down overnight, just that they start cutting their emissions at the speed that scientists have figured out is needed to keep average global warming below 1.5C; that is, at least 7.6% emissions reductions annually. Unfortunately, despite their claims, few if any are doing so.
Your asset manager has had 30 years (since the UN Framework Convention on Climate Change was signed, marking the establishment of a global consensus on climate change), to push investee companies to responsibly manage emissions. But most of them have only belatedly started engaging on climate issues in the past two years. None of them are yet insisting that investee companies meet scientific targets for emissions reductions.
When your asset manager tells you they need to be invested in fossil fuel companies to secure changes in those company’s practices, ask them for the evidence that their engagement is working. Ask them for examples of when, where and how their shareholder advocacy has secured actual, measurable and sustained emissions cuts. Shareholder engagement can indeed be effective with some companies on some issues. But there is very little evidence that it is effective in persuading fossil fuel companies to change their core business models. This may be because while it was once possible to argue that these companies served the public good, that time has long since passed.
Fossil fuel company executives who are not setting ambitious emissions reductions targets should be prosecuted for environmental crimes, not treated as respectable corporate citizens as shareholder engagement implies. In 2020, after years of mounting evidence of the climate crisis, these executives would not hold these positions if they had any interest in the social good.
Lastly, divestment does not preclude continued shareholder engagement. Asset managers can partially divest and continue to engage while threatening further divestment if targets are not met. We ourselves own one share each in the coal companies Exxaro and Thungela so that we can support shareholder advocacy led by Just Share.
Unfortunately, in our experience, asset managers only begin to become champions of shareholder engagement when pressured to divest. But it’s dishonest and evasive to use shareholder advocacy as a figleaf for inaction in a global climate crisis.
We’re not saying the asset managers should immediately sell off all their Sasol shares if they and most of their clients don’t want to. We’re just saying they should make it possibly for those of us who do want to divest, to do so more easily.
We think any credible fossil fuel-free fund also needs to exclude destructive industries such as tobacco, armaments and intensive meat production; and that all investable companies should be screened to ensure they score well for their environmental, social and governance (ESG) practices.
Please do connect with us and ask. We’re big on dialogue and low on judgement.