- Yesterday the New York State Comptroller Tom DiNapoli announced that the $226 billion New York State Common Retirement Fund is moving to divest from the riskiest oil and gas companies by 2025 and decarbonize by 2040.
- This follows New York City’s 2018 announcement of a five-year plan to divest its massive pension funds from fossil fuels.
In South Africa, two cities, Cape Town and Durban have both committed to divest from fossil fuels. However, neither have yet developed a clear plan or actually moved money as a result of their commitments. This despite repeated engagements in the case of Cape Town between the City and activists since the City originally announced their commitment in 2017. Durban has similarly not given any further details of their plans nor action as a result of their commitments, though we acknowledge this is a far more recent commitment than Cape Town’s.
New York’s announcement is one of the biggest leaps forward worldwide on climate finance action in 2020, an otherwise bleak year for the planet. It creates the most comprehensive program of any large public fund worldwide to divest from fossil fuels, decarbonize across a massive portfolio, and put major financial pressure on public companies – from auto companies to utilities – to align their operations with the scale of climate action needed to stave off worldwide catastrophe.
The victory comes eight years after New Yorkers launched the #DivestNY campaign, days ahead of the December 12 fifth anniversary of the Paris climate accord signing, and sets the bar for climate finance action ahead of COP26 next year in Scotland.
The state is taking a ground-breaking, systematic approach to reviewing and assessing each fossil fuel company subsector, with a process grounded in fiduciary responsibility. The results of the first review, targeting the coal subsector and completed earlier this year, resulted in divestment from 22 coal companies. Similar divestment action is anticipated from the current tar sands review, which is set to conclude next month. Reviews of fracking, oil majors, fossil fuel service companies, and oil and gas transportation and pipelines will follow. All reviews and divestment actions will be completed by 2025. It is these sorts of concrete actions and plans with deadlines that South African cities should implement to give any weight to their commitments.
Cape Town and Durban’s commitments to divest from fossil fuels are particularly vital for South Africa given the fact that the country’s current greenhouse gas emissions reductions commitments fall far short of the obligations it assumed when it ratified the 2015 Paris climate treaty; and are repeatedly undermined by massive continuing subsidies for the fossil fuel industry and support for the coal industry in particular. Public finance institutions such as the DBSA and IDC continue to fund fossil fuel investments and commitments made by President Ramaphosa’s government to fight climate change have not translated into sufficient action.
“Since Cape Town made its divestment commitment in 2017, we have seen no concrete plans or actually moving of money out of fossil fuel-compromised investment instruments. It is about time that Durban and Cape Town take the New York City and State cue and walk the talk. The ticking time bomb that is the climate crisis needs urgent action.” – Glen Tyler-Davies, SA Team Leader of 350Africa.org
Author: GBA News Desk