British conservation charity the National Trust has become the latest to announce it will stop investing in fossil fuels by 2022 as more global investors groups signal plans to pull out as much as $8 trillion in investment in fossil fuels.
The National Trust, which conserves places of historic and natural beauty in England, Wales and Northern Ireland, will remove all its fossil fuel investments from its £1bn equities portfolio.
It joins more than 1,000 institutions worldwide, including Ireland and Norway’s sovereign wealth funds and the British Medical Association, that have committed to divest $8tn of such assets.
The campaign is gathering momentum but fossil fuel dependent nations like Nigeria have yet to prepare a strategy for surviving the wave of divestment which analysts say will only rise.
Peter Vermeulen, the trust’s chief financial officer, said the decision to fully divest had both an environmental and economic rationale; oil and gas producers were failing to evolve to be fit for a future when demand for their products will drop.
“Many organisations have been working hard to persuade fossil fuel companies to invest in green alternatives,” he said. “These companies have made insufficient progress and now we have decided to divest from [them].”
The main, non-binding, goal agreed at the 2015 Paris climate summit was to hold the global average temperature increase to “well below 2 degrees C above pre-industrial levels”.
The National Trust, which has some 5.2m members, holds investments in oil and gas majors BP, Total and Royal Dutch Shell and mining companies Rio Tinto, Glencore and BHP Billiton indirectly via a portfolio fund.
All divestments will be made within three years but most are expected to be completed within 12 months. ShareAction, a charity that promotes responsible investment, praised the National Trust for setting a deadline.
However 350.org, which encourages divestment, said the move should have come sooner considering one of the organisation’s objectives was environmental conservation.
“This is a welcome, but belated move from the National Trust,” said Anna Vickerstaff, a campaigner.
The National Trust defended its record, saying Mr Vermeulen had been working with the managers of the fund since the Paris summit to find a way to divest from the companies without affecting the organisation’s revenue.
The divestment decision extends a 2015 policy banning direct investments in companies that derive more than 10 per cent of their revenue from thermal coal or fuel extraction from oil sands.
There is a growing debate over whether divestment is the best strategy for investors to lobby hydrocarbon producers to change their business models in preparation for a shift towards lower-carbon fuels.
Demand for oil and gas globally remains robust.
