What does it mean for one of the southernmost cities in the world to ditch its investments in fossil fuel companies?
An international movement is calling on institutions to pull investments in fossil fuel companies as a means of tackling CO2 emissions. Kick-started by climate change organisation 350.org and others, the divestment movement seems to be rapidly gaining a momentum all its own.
On Wednesday, the city council of Dunedin, New Zealand showed just how far the idea has spread, as it voted to exclude investments in the fossil fuel extraction industry as part of a new socially responsible investment policy.
Believed to be the first city in New Zealand to commit to a policy on fossil fuel divestment, Dunedin joins 23 other cities in the US, and Boxtel in the Netherlands, as well as dozens of universities, trusts, and churches, with the Anglican Church in Aotearoa, New Zealand and Polynesia announcing today that they will be divesting their shares in fossil fuel companies by its next Synod, in mid 2016.
The city council's total investment fund holds NZD$76.3m (£39.4m), which includes approximately NZD$1.7m in oil investments. They are not expecting to have a direct financial impact on the companies they are divesting from. That isn't the point.
Dunedin mayor Dave Cull explains "There is a growing understanding around the world of the need to transition to a low-carbon economy. Divesting in fossil fuel extraction industries is both a recognition and encouragement of that imperative." Cull outlines it as a matter of social responsibility and financial risk.
"The social responsibility concerns include Dunedin City Council having a statutory responsibility to address the community effects of climate change, and consequently the unwillingness to invest in industries that contribute to those effects. The financial side is about fossil fuel extraction companies having large asset bases comprising fossil fuel that cannot be burned if the planet is to stay within the prudent limits of planetary temperature increase."
Councillor Jinty MacTavish, said there were three key themes inresidents' requests for the council to divest. "For some it's an ethical issue – the devastating impact that warming beyond 2C would have on both our own future citizens and on communities worldwide, and a strong desire to limit our city's collective involvement in promoting that outcome. For others, divestment is about reducing our exposure to the potential financial risks now inherent in investments in the fossil fuel extraction sector. And a third group simply see no good reason for Council to be invested in carbon-intensive industry, when there are so many positive low-carbon alternatives."
As one of the first to show leadership on the issue in New Zealand, the ethical and financial precedent Dunedin is setting has potential to set off a ripple effect – and not just for other cities.
The New Zealand branch of 350.org has been leading a bank divestment campaign for the past eight months, but the Dunedin announcement sparked so much interest online in the first 24 hours that it is now launching a call for the country's first university campaigns as well.
Dunedin illustrates why fossil fuel divestment has been making waves around the world and only seems set to get bigger. It's a movement – not just a campaign run by an organisation – all basedon empowering individuals with information and support.InDunedin, as elsewhere,it was largely a case of awareness of the wider global movement getting out thereand people taking it on locally themselves.
Online and social media buzz around the global movement, the reports, media and resources it's helped generate, as well as a visit from 350.org co-founder Bill McKibben to Dunedin last year, seem to be the drivers behind individual residents and local groups raising the idea via submissions as part of the council's annual planning and budgeting processes.
The decision wasn't entirely down to residents' submissions – there were key investment reports and work from council staff and councillors. Butnotably, with onlyasmall nudge from local groups,fossil fuelsbecameone of the most submitted onindustrieslast monthas part of a proposed wider ethical investment policy. Ultimately it was this broad community support thatgot it onto the voting agendaon Wednesday,and helped convince Dunedin City councillorsto vote for change.
As heads of state are set to meet later this year in New York for the Ban Ki Moon Climate Summit, 350.org will continue to build the divestment movement catalyzing necessary global climate action.
Ashlee Gross is the national coordinator for 350 Aotearoa, the New Zealand organising group for 350.org. Aotearoa is the Maori name for New Zealand.
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