divestment

Robert Armstrong: A South African fossil fuel divestment story

RobertArmstrongI work in the natural & organic retail industry, where we promote and offer products we believe lead to a healthy lifestyle. Our aim is to provide products and services that are healthy for people as well as for the planet. To do this, we try to source organically farmed or naturally sourced products, and wherever we can, reduce our carbon footprint.

As a conscious retailer, I decided to look at my savings/ share portfolio for ways to reduce my personal footprint further. I was also able to look at a family member’s portfolio, and unsurprisingly found that being a South African invested in the JSE, it was heavily weighted to mining and carbon-intensive companies like Sasol.

So, fortunately, after a conversation about the damaging impacts that companies like Anglo American, BHP, Exxarro and Sasol have on the planet, we decided to divest from these companies. And thankfully, resources like Fossil Free SA and 350Africa.org help to inform and guide us on the problems and solutions to climate change. The question, then, was where should our funds be invested where we can have peace of mind that the vehicles/equities/bonds that were invested in were ethical and not damaging our environment?

The options thus far have been very limited in South Africa. We would love to see more offerings on the local market. For now, we have chosen the Nedbank Green Savings Bond as well as a small exploratory holding in the Sun Exchange (local) and Lend-a-Hand Ethex (UK).

Note: Our profiles of ethical South African investors are not intended as investment advice, but as inspiration for undertaking your own fossil fuel divestment and ethical investment journey. If you have a personal divestment story to share with us, please get in touch

Spotlight 25 July: Bishop Geoff Davies is calling for a secure, fossil fuel-free future in SA

To promote our Amandla.mobi petition calling on South African asset managers to support fossil fuel-free funds, we’ve launched a social media campaign on Facebook, Twitter and Instagram spotlighting some of the people and organisations that support this call.

Wednesday’s posts featured Bishop Geoff Davies of the Anglican Church and Southern African Faith Communities Environment Institute. Please share these posts with your followers and help us get to 5,000 signatures!

New research on the financial impacts of fossil fuel divestment

Our partners in 350 have shared some recent research on the financial impacts of fossil fuel divestment with us (thesis PDF,thesis summary PPT). This research was undertaken by Alison Shulz of the University of Kassel, Germany. It should be noted that the primary focus of the divestment-reinvestment campaign is on social impacts: discrediting the fossil fuel industry to remove their social license to operate. So financial impacts, where they exist, are in a sense a bonus. Here are some of the headline conclusions of the paper:

– The direct, short-term impact of divestment (if any)…

• Theoretically, a direct effect of divestment should result from limited risk sharing (Merton) and the fact that assets can only be sold at a discount (Miller)

• Empirically, announcement to divest from a specific company has no effect on this specific company’s stock price

• This effect is however present for coal firms which mainly operate in markets of the Global North

• Divestment announcements are found to have a negative impact on stock prices of the whole fossil fuel sector

• This effect is even more pronounced for financially motivated divestment and large divested sums

The long-term impact is still unclear.

It should be noted that this is an under-researched area. It’s our impression that this research does not include the likely additional positive impacts of capital which is diverted from fossil fuels directly into renewable energy or other ethical investments.

Fossil Free UCT campaign submits testimony on divestment to the UCT Institutional Reconciliation and Transformation Commission

The aims of the UCT Institutional Reconciliation and Transformation Commission (IRTC) include making ‘recommendations on institutional culture, transformation, decolonisation, discrimination, identity, disability and any other matters that the university community has raised over the past 18 months, or may wish to raise in the future.’

In the light of this mandate of the IRTC, we offer a submission from the Fossil Free UCT campaign (which includes the Green Campus Initiative and Climate Action Project, supported by Fossil Free SA) arguing that the University of Cape Town needs to move quickly to ethical and responsible management of its investments. In particular, in the light of the massive human rights crisis posed by climate change, UCT must immediately adopt bold targets for ending its investments in fossil fuel companies.

Summary of recommendations

We note that UCT is to be commended for being the first African university to adopt a responsible investment policy, but that the university can and should act more whole-heartedly. UCT should become a pro-active and visionary leader on issues of ethical and responsible investment. It must take specific, urgent measures (outlined below in our recommendations) to end its tacit support of fossil fuel corporations, and initiate divestment from fossil fuels. It should also address other ethically questionable investments, such as those in tobacco, while accelerating work to reduce on-campus environmental impacts.

Continued inaction, especially as the divestment movement grows in SA, threatens to leave UCT looking tardy and unresponsive given how long it has been aware of the issues.

The full document, including detailed recommendations for action, can be downloaded here (pdf): Submission to the UCT IRTC from the Fossil Free UCT campaign

 

Divest Fest – local climate action

 

Glen Tyler of 350:– The first Divest Fest in South Africa wasted little time in getting down to climate solutions. A group of 18 people came together in Cape Town to learn and take action for fossil fuel divestment. The organiser, David Le Page from Fossil Free South Africa (FFSA) set the scene and underlined the urgent need for action by giving an overview of the threat of climate change – unfortunately a relatively easy job in a city that is experiencing a crippling drought.

I then outlined some examples of global divestment campaigns and the strategies and tactics used in those, and the successes that came from those campaigns – did you know that New York recently divested $390 billion worth of its employees’ pension funds? We then got busy with the good stuff – talking about how we can move the divestment conversation in South Africa forward.

It was fantastic to hear about the steps that the people there had already taken – from asking their finance managers about divestment, to buying into investment houses in order to ask them to divest. There are very few real options for people in South Africa who are looking to divest from fossil fuels, two such options are a basket of shares on the Easy Equities platform, and a fund put together with WWF, although this is still not a fully divested fund. One step Fossil Free South Africa is taking to change this is their petition, asking asset managers to offer a divested fund. If you haven’t signed it already, please do!

At the event, the participants wrote a joint letter to Sygnia asset managers, explaining divestment and asking them to offer a divested fund. There is a sense that once one such fund is offered, other asset managers will follow. It was fantastic to see real action happening, with participants writing to asset managers and institutions in their own capacity on the day.

We heard more from FFSA management committee member Mellony Sparks about the divestment landscape in South Africa. Her presentation led to a number of interesting conversations around the mechanics of investing and divestment, green jobs and the social repercussions of divestment, as well as other environmental issues that we could take into account when talking about divestment.

FFSA outdid themselves by providing vegan pizzas and raw chocolate fudge for lunch. It was a fantastic event, and already there are plans for future ‘fests! We hope you’ll join us at one!

Feel like you missed out? FFSA has a range of easy actions you can take on their website – check them outOur thanks to Glen for this summary of our event, and we include some of the feedback from participants below:

“Very stimulating questions and conversation! Really enjoyed it”

“I really appreciated the space: Connecting like minded people A quieter space would’ve been more pleasant or maybe just microphones. The seating arrangement could have been made more interactive”

“I think the content is so informative, necessary and interesting but perhaps adding elements of entertainment and having it later in the day could coax more people into joining.”

“A good session. Less jargon”

“You encouraged me to take action and get moving to lobby”

“I found the introduction to the cause and what you guys are going awesome. The practical approach to further our own campaign was also very cool.”

“It was a well informed group of people, so possible to take the conversation to another and needed level of detail that will inform advocacy action. Really important and thanks to organisers and contributors. Might be good to develop a basic alternative investor’s guide for divestors because most people just leave this sort of decision making to their advisors.”

Announcing our first-ever Divest Fest (24 February, 9.30am at 75 Harrington St, Cape Town)

Desmond Tutu: People of conscience need to break their ties with corporations financing the injustice of climate change.

Welcome to 2018, and the slightly mad state of play in South Africa right now: Day Zero is rapidly approaching in Cape Town, while cities and institutions of the stature of New York and Lloyds of London (the world’s oldest insurance market) are divesting from fossil fuels – but South Africans still aren’t widely questioning why we allow companies like Sasol to continue pumping out enormous amounts of climate-breaking greenhouse gases without committing to science-based targets for reductions as genuinely responsible companies are doing.

So please save this date: On 24 February, Fossil Free SA, with 350 Africa, will be hosting our first Divest Fest, from 9.30am to 1.30pm, at 75 Harrington Street, Cape Town.

Click here to RSVP. Click here  to add to your calendar.

Divest Fest will be a morning of practical online climate and divestment action, with videos, mini-talks, brainstorming, and ample time to take practical action to push ahead fossil fuel divestment in South Africa (followed by lunch, possibly even with water!) More details to follow…

Bring your laptop or tablet, send us any suggestions you may have in advance, and let’s get stuck in demanding ethical, safe, low-carbon and divested investment funds.

And – if you haven’t already, please join the over-900 people who have already signed on to support our Amandla.mobi petition calling on top asset managers to create divested funds in South Africa.

Click here to RSVP. Click here  to add to your calendar.

Hope to see you soon!

David, Glen, Mellony, Ahmed, and the FFSA/350 Africa teams

Divest Fest!

Our team is about to hit Rocking the Daisies, and this is what we’ll be asking festival-goers to do for the divestment cause –  here we list five quick ways you can take action right now to push South Africa towards a more safe and prosperous future and away from the deadly fossil fuels – coal, oil and gas – that threaten our climate, our health and our savings.

HOW MANY ACTIONS CAN YOU TICK OFF?

Five quick and easy divestment actions (1–2 minutes)

Please work your way through this list of fast, easy actions.

ACTION: SIGN PETITION: Sign our “We Are Ready to Divest!’ petition: For a safer climate and secure future, tell the biggest SA investment managers – Allan Gray, Coronation, Investec, Old Mutual, Stanlib and the Government Employees Pension Fund – to offer funds divested from coal, gas and oil.

 ACTION: SIGN PETITION: Are you a University of Cape Town student, staff member or alumnus? Sign our petition calling on UCT to divest.

ACTION: SIGN PETITION: Are you a Stellenbosch student, staff member or alumnus? Sign Fossil Free SU’s petition calling on SU to divest.

ACTION: GET NEWS UPDATES: Sign up for the Fossil Free South Africa newsletter to get news and updates on our progress in divesting South Africa and abroad.

FF-logo SA Smallest.jpg

ACTION: DONATE: Become a once-off donor via Snapscan or register as a repeat donor to Fossil Free SA. Even just R20/R50 helps out. (You can read more about our young organisation here.)

And three Tweets!

Tweet: @Investec We are Ready to #DivestNow! Give us fossil-free investments for a safer climate & secure future https://goo.gl/t942Nd

Tweet: @OldMutualSA We are Ready to #DivestNow! Give us fossil-free investments for a safer climate & secure future https://ctt.ec/Vcf4o+

Tweet: @Stanlib We are Ready to #DivestNow! Give us fossil-free investments for a safer climate & secure future https://ctt.ec/Vcf4o+

Keen for more? Click through to our full DIVEST FEST page.

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.

 

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 – read the minutes of the meeting (pdf) – 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.