Mike McGinn (former Mayor)
10/17/2013 1:30:00 PM
Fossil fuel divestment movement comes to Seattle to plan next steps
Governments and financial professionals meet to develop financial tools to help support divestment
SEATTLE - Mayor Mike McGinn today joined local government leaders and financial experts from across the country to kick off the Seattle Divestment Forum. Hosted by Mayor McGinn and organized by the Mayors Innovation Project, the Seattle Divestment Forum brings together local governments and financial professionals to develop strategies, practices, and new financial tools to promote divestment from fossil fuels.
"Seattle led the way by being the first city to begin the process of divestment and ensure our dollars are used to stop, rather than promote, climate change," said McGinn. "By hosting the Seattle Divestment Forum we can help more cities and institutions get their money out of the companies that are contributing to climate change and putting our future at risk. We will demonstrate a market demand for investment tools that will enable more cities and institutions to join us in divesting from fossil fuels in the coming years."
More than 20 cities, as well as other local governments and institutions, have made commitments to divest their financial resources from fossil fuels, and the movement continues to grow. Leaders of these governments and institutions have found that the risks posed by climate change require decisive action and seek to use all of the tools available to them to combat climate change, including their financial resources.
"The Santa Clara Valley Water District provides flood control, water supply, and watershed restoration to Silicon Valley and along the shoreline of San Francisco Bay. Climate change makes harder every aspect of a water district’s job. Why on earth should we be financing the same companies that are causing our worst problems and are fighting the crucial political solutions we need?" said Brian Schmidt, Board Director for District 7 of the Santa Clara Valley Water District.
Since Mayor McGinn announced last year that he would work to divest Seattle’s assets from fossil fuels, the financial sector has also joined the cause. Leaders from across the field of socially responsible investing have been working to respond to the growing demand for divestment.
"The divestment movement has changed the investment community. Bar none, this issue has been the most debated topic in the socially responsible investment community all year long, with more firms now changing their marketing or developing new products to attract these motivated investors," said Leslie Samuelrich, President of Green Century Capital Management.
Many financial experts believe we are currently experiencing a "carbon bubble" in which the value of fossil fuel companies is based primarily on the untapped fossil fuel resources they own. It is unlikely these companies will be able to fully exploit those resources, meaning they are currently over-valued. As new regulations come online and market demand shifts to more sustainable energy sources, the carbon bubble will burst, creating substantial impacts for investors and society at large.
"Investment analysts recognize that the window for thermal coal investment is closing, and that oil companies are providing poor returns on capital invested. Investors with a long term fiduciary duty to pension beneficiaries have to be careful they are not backing companies with fossil fuel expansion plans that face the risk of stranding, as climate, water or air-quality policies bite. Based on current investment plans, there is a real chance that investors and companies will be wasting capital," said Mark Campanale, Director of Carbon Tracker.
The Divestment Forum will address these risks and offer further data on the performance of fossil fuel free investments. Speakers will also address fiduciary responsibility and re-investment opportunities.
The fossil fuel divestment movement uses the strategy that proved effective in helping to end apartheid in South Africa in the 1980s. The goal is to create the social and political leverage necessary to demand that fossil fuel companies shift their business model to one that is not predicated on the on the extraction of resources that are detrimental to human life and the planet.
"Divestment is both financially smart and politically effective. While the tech and housing bubbles caused painful economic disruptions, they pale in the face of the carbon bubble, in which fossil fuel companies have inflated their balance sheets with reserves that cannot be burned without wrecking the planet," stated Bob Massie, President of the New Economics Institute. "The sooner that investors sell these toxic assets, the safer their beneficiaries will be. And as this happens, the United States government will finally wake from its dangerous coma and take steps to correct the market failures that are propelling us towards the abyss."
The Seattle Divestment Forum begins with a reception and keynote address tonight and continues all day Friday. The Forum will be held in the Bertha Knight Landes Room in Seattle City Hall. While Forum participation is by invitation, members of the media who are interested in covering the forum should contact Alison Van Gorp at email@example.com to register.
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