climate change

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…)

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.

Latest newsletter: UCT march planned for 11 Oct, and other news

UCT campaign ongoing, divestment march on campus on Tuesday 11 October

Our continuing campaign at UCT has moved the university to develop a draft ethical investment policy. If approved, that policy will create the channels for UCT to consider a commitment to divestment. The university’s ethical investment task team meets again this Thursday. 

  • To keep up the pressure on UCT, we are planning a march calling again on the university to divest. The march will start at the ACDI building at 1pm on Tuesday 11 October. Mpho Tutu, daughter of Archbishop Emeritus Desmond Tutu, has indicated she will do her best to attend and support. Note: Unfortunately, due to the closure of the UCT campus, this march had to be cancelled.
  • In preparation, there will be a screening of the 350.org divestment documentary Do the Math on Monday, 12 Sept at 6pm, EGS studio 1. (All welcome, please bring snacks.)

Divest-Reinvest webinar hosted by Global Catholic Climate Movement

For those who would like to learn more about divestment, the Global Catholic Climate Movement is hosting an online webinar tomorrow at 2–3.30pm SA time. You don’t have to be Catholic to register, and while there’ll no doubt be a faith-based angle to it, lots for all of us to learn. Register here.

General news

  • Later this year (details TBC), we are planning a workshop on how South African investors can start finding ways to divest, and how we can push for ethical/divested options in South Africa. Please get in touch if you wish to contribute, or suggest contributors.
  • 350.org is hosting a national student summit on divestment in Johannesburg later this month (UCT students are attending.) Contact Ahmed Mokgopo (ahmed@350.org) for details.
  • The most recent university to divest is the Queensland University of Technology, which announced its plans last Friday. As ever, Jeremy Leggett provides excellent updates on the progress of the ‘Carbon War’.

Reminders 

  • If you’re associated with UCT and would like to publicly endorse the 2015 letter of the UCT ACDI Masters Class urging divestment, please read and sign up
  • We have 18A tax exempt status now – please consider starting a R50 or R100 monthly stop order in our favour. Our deep thanks to those who have already done so. Please contact Rob (robzipplies@gmail.com) for a tax certificate. 
  • If you’d like to set up your own campus divestment campaign, please contact us, or consult this useful starter guide.

August updates

Our core campaign to persuade the University of Cape Town to divest from fossil fuels is continuing. As a result of ongoing lobbying, we expect to be joining a meeting of the university’s ethical investment team with its advisers on 18 August. In the meantime, we have been searching for and meeting with potential funders to ensure that our work can continue beyond September, when our initial funding will run out.

Other recent activities have included a briefing on climate change and divestment to the investment team at Futuregrowth, and participating in a panel discussion on divestment for NGOs hosted by Inyathelo.

International developments

In the meantime, there have been some extremely encouraging developments in what Solar Century’s Jeremy Leggett calls ‘the Carbon War‘ – the civilisational struggle to stop climate change from advancing too far. Not all these developments have been in the realm of divestment alone – for example, the Pope’s recent Encyclical ‘Laudato Si‘ on economy, environment, climate change and inequality. (Here’s an overview of its significance.)

Another extremely significant moment has come as citizens in the Netherlands won a court case forcing their government to take stronger action on climate change with an order to cut carbon dioxide emissions 25% –within five years! This case is already inspiring similar court cases in other countries, such as Belgium. South African lawyers do not think the time is yet quite ripe for such action here in South Africa (we have asked the question), but note that the situation may change if there is a strong international agreement on climate change at the Paris talks of the UN Framework Convention on Climate Change at the end of this year.

Closer to home, we have learned that the South African Government Employees’ Pension Fund is one of the most carbon-exposed funds in the world, with over R80 billion invested in coal. This means that civil servants in South Africa are very exposed indeed to the likely imminent end of the fossil fuel era. If you work in government in South Africa, you should be asking some very tough questions about how this critical aspect of your future is being managed, given the swift erosion of value in the stocks of many fossil fuel companies, and the danger of them becoming stranded assets.

The Union of Concerned Scientists has published a comprehensive report showing how companies like BP, Shell, and Chevron continue to produce misleading propaganda about climate change, even forging letters to the US Congress.

WWF has produced an important report on the role of retirement funds in funding the expansion of renewable energy in South Africa:

Some R540 billion in private capital will be required to achieve the renewable energy vision for 2030 outlined in a previous study (Sager 2014), of which debt accounts for the lion’s share at R405 billon. SA wholesale banks active in financing REIPPPP projects have reached average exposure levels of 4-5% of their portfolios, nearing prudential portfolio limits… Retirement funds, with R3 trillion assets and long term liabilities, could supply R150bn of this debt requirement.

Management issues

On a practical note, Fossil Free SA has now achieved tax-exempt status, and we can issue 18A certificates for all future donations. (Donate here.) We also held our second management committee meeting on 1 July; please email david@fossilfreesa.org.za if you would like to see the minutes.