South Africa

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.

Advertisements

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.

Fossil Free updates

• Our full November launch schedule is now available. Check the list for details of launches in Cape Town (Nov 12), Bloemfontein (, Johannesburg, Pretoria and Durban. Please tell your friends in those cities.

• Our Thundafund campaign fundraising to support our work over the next year is now live. Please consider contributing and forwarding to friends. And watch the video we created.

• Our first ever ‘divestment dinner’ was held on Wednesday 22 October. Seven guests watched Do The Math, and then discussed the divestment strategy. A template letter for writing to investment managers requesting fossil free investments was distributed. Participants were invited to register support for Fossil Free SA. Salad was eaten. (more…)

Archbishop Desmond Tutu supports call for University of Cape Town to divest from fossil fuels

Desmond Tutu: People of conscience need to break their ties with corporations financing the injustice of climate change.My dear friends at the University of Cape Town,

Climate change has become a profound and growing human rights issue, a threat to all of us, and to the world’s poorest, who are least responsible for it, most of all.

In May, I visited Alberta, Canada, where I saw how the relentless exploitation of tar sands is stripping away the rights of First Nations and affected communities to protect their children, land and water from being poisoned. Together with nine other Nobel Peace Prize recipients, I have called on President Obama to block the approval of the Keystone XL pipeline, planned to carry oil from the tar sands to the Gulf of Mexico across the United States. Earlier this year, I called for all people and institutions of conscience to commit to divestment from fossil fuel companies.

Climate change is a particular injustice for Africans, because it is the world’s most vulnerable people who are already paying for developed countries’ failure to act with their lives and livelihoods. Our continent is home to many already carrying the burden of droughts, floods and increased disease that may have been worsened by the collective carbon emissions of humanity.

There are many ways that all of us can fight against climate change: by not wasting energy, for instance. But these individual measures will not make a big enough difference in the available time. It is clear that those countries and companies primarily responsible for emitting carbon and accelerating climate change are not simply going to give up; they stand to make too much money. They need a whole lot of gentle persuasion from the likes of us. And it need not necessarily involve trading in our cars and buying bicycles!

During the anti-apartheid struggle in South Africa, using boycotts, divestment and sanctions, and supported by our friends overseas, we were not only able to apply economic pressure on the unjust state, but also serious moral pressure.

The University of Cape Town is perhaps the leading university on the African continent. It is a centre of excellence for climate change research, and is home to many leading voices on human rights and social justice. It makes no sense for the university or any other institution to invest in companies that undermine our collective future. It makes little sense for any South African institution to make new investments in mining coal – or fracking – in the name of economic development. We know these are the most short-sighted kinds of development. Their benefits will not last and their costs are immense – almost certain future danger and destruction for our most vulnerable people.

It is the world’s wealthiest countries and people who have benefited most from the use of fossil fuels, and have contributed most to global warming. It is time we took full responsibility for our past actions. People of conscience need to break their ties with corporations financing the injustice of climate change. I ask UCT to examine urgently the extent of your investments in fossil fuel companies and to make a strong commitment to phasing them out as soon as possible.

Desmond Tutu, 18 July 2014

The Fossil Free UCT campaign will be formally launched at a public meeting on the UCT Upper Campus on 30 July, 17h30-19h00, Leslie Social Sciences 1A