If you have any money invested anywhere (think about your pension or retirement annuity, maybe you have some money in unit trusts or a Satrix 40 account) your money is probably invested in companies that mine, make or sell the fossil fuels that are responsible for climate change. You don’t have much of a choice in the matter. A look at the top 40 companies on the Johannesburg Stock Exchange (JSE) includes BHP Billiton, Anglo American, Sasol, and Exxaro, who deal directly in coal and others who have significant carbon footprints.
The problem is that the people managing your money (think Allan Gray, Coronation, Investec, Old Mutual, Sanlam and the Government Employees Pension Fund) don’t offer any fossil free, or environmentally conscious options. The common reason given for this by the big asset managers is that there is no public demand for ethical investments in South Africa, and it’s not financially viable for them to offer fossil fuel-free funds.
Fossil Free SA is trying to show them that the demand is there.
In September, the organisation made a bold public statement by publishing ads in Business Day calling on the country’s top asset managers: Allan Gray, Coronation, Investec, Old Mutual, Sanlam and the Government Employees Pension Fund (GEPF), to offer savers fossil free options.
“Financial services is one of the most profitable sectors in South Africa yet South Africa’s top asset managers fail at being socially responsible corporate citizens because they continue to invest in the fossil fuels that are the biggest cause of dangerous climate change,” says Fossil Free SA’s (FFSA’s) coordinator David Le Page.
FFSA’s campaign caught their attention. The organisation has had responses from Investec, Sanlam, Old Mutual and the GEPF. It will be interesting to see if a frontrunner willing to offer a fossil free fund emerges. And whether they would be supported by the environmental community.
People of conscience need to break their ties with corporations financing the injustice of climate change. – Archbishop Emeritus Desmond Tutu
“We believe that most South Africans, once they understand the issues, would far prefer not to be invested in declining industries that are wreaking havoc with the environment. We call on our world-class asset managers to help investors and citizens who are committed to the vital mission of stopping climate change, which is also an immense opportunity for enhanced economic development,” says Le Page.
The Spotlight campaign will close on 4 October at a Cape Town event at which the asset managers and owners mentioned have been invited to respond. The campaign was backed up by teams collecting signatures at markets and events, where the response was positive. The petition campaign partners include 350 Africa, the Centre for Environmental Rights, Greenpeace Africa, Earthlife Africa, Fruits & Roots, SAFCEI, the African Climate Reality Project, UCT’s Green Campus Initiative, EcoMaties, GroundWork, Green Anglicans, the People’s Health Movement, SA Climate Action Network, Cullinans and Greenpop.
Fossil Free SA grew out of a 2013 initiative to persuade the University of Cape Town to stop investing in fossil fuels. The university now has a draft responsible investment policy. With 350 Africa, FFSA has also helped persuade the City of Cape Town to commit to divestment. Global commitments to fossil fuel divestment now span whole countries, such as Ireland, cities including New York, London and Paris, and funds worth over $6 trillion. Archbishop Emeritus Desmond Tutu has endorsed the movement, saying: “People of conscience need to break their ties with corporations financing the injustice of climate change.”
Fossil fuel divestment means ending direct and indirect investments in the companies most directly responsible for producing and selling fossil fuels. There are many different ‘flavours’ of divestment. Some divestors start out by simply excluding coal from their portfolios; others exclude coal, gas and oil; and others go further to exclude companies with substantial carbon footprints in their supply chains, or companies that provide goods and services to the fossil fuel industry.
The most common ‘flavour’ of divestment is to ask institutions to phase out all investments in the global top 200 publicly listed companies with the greatest emissions potential in their buried reserves of oil, gas and coal, explains FFSA.
Divestment is viewed as a powerful social and economic strategy intended to address:
- The inadequate pace of action by most governments.
- The recalcitrance and corruption of the fossil fuel industry.
- The corruption of democratic and regulatory processes in many countries by the fossil fuel industry.
- The need to end social acceptance and approval of the fossil fuel industry.
The FFSA website is packed with information on all you ever needed to know about divesting from fossil fuels.