Download Long Motion - EN - European Green Party

Motion example: long
Avoiding financial risk and tackling climate change through fossil fuel divestment
Context
We humans are altering the climate system rapidly and irreversibly with the greenhouse gases
we produce. The primary driver of climate change is burning fossil fuels coal, oil and natural
gas. The consequences may be dramatic: for example rising seas, extreme weather,
spreading diseases, increasing hunger and more refugees.
To avoid the worst damages and risks, the world community has agreed to keep warming well
below two degrees and to pursue efforts to limit it only to 1.5 degrees. To do so, the
overwhelming part of coal, oil, and gas reserves must be left in the ground rather than
extracted and used.
According to a joint study by Carbon Tracker and the London School of Economics, a third of
oil reserves, half of gas reserves and more than 80% of the world’s coal reserves must remain
in the ground to limit warming to two degrees. While phasing out the use of fossil fuels, we
have to phase in investment in a zero-carbon energy system.
Divesting from fossil fuel companies makes economic sense. Climate commitments mean that
large parts of the fossil fuel reserves the industry currently holds cannot be used, making them
essentially stranded assets. When this so called carbon bubble bursts, the fossil fuel
companies will suffer which will have an impact on their share prices and profits. Investing in
the fossil industry after the Paris Agreement is a financial risk not worth taking.
Withdrawing money from the fossil industry is also a moral choice. If causing climate change
is ethically questionable, then financing and trying to profit from causing it is doubly so. We
want our community to play a part in solving climate change, not accelerating it.
Resolution
Against this background, the Council decides
1. The Administration is commissioned to submit a report on the guidelines currently in
place for investments (including subsidiaries, foundations, etc.).
2. The Administration is also commissioned to report whether, and if so to what extent,
money has been invested in companies, either directly or through funds, whose main
area of activity is coal/fossil fuels [choose one].
3. Based on the analysis of current guidelines and investments, the Administration is asked
to submit an updated investment guideline for communal financial reserves for decisionmaking. Where legally permitted, these guidelines should also apply to municipal
investments and subsidiary companies.
4. The administration is asked to identify ways how and to which date investments in fossil
fuel/coal [choose one] companies can be gradually phased out and finally withdrawn.
5. Over the medium term, the financial management seeks forms of investment that pursue
sustainability and ethical principles that go further.
Background
Being consistent with climate commitments
Our community has committed to tackling climate change and promoting sustainable
development. Continuing to financially support fossil fuels or allowing financial institutions to
do so on a massive scale would be inconsistent with these commitments.
Reducing risk from exposure to the carbon bubble
Investment in fossil fuels is increasingly risky – the next financial crisis could start with the
carbon bubble. A study commissioned by HSBC estimates that companies active in the fossil
fuel industry could lose between 40 and 60% of their value when investors become aware that
their reserves cannot be used or cannot increase in value. The decrease in economic activity
and in the stock-market value will affect anyone who has invested in these companies,
including local governments.
Directing resources to sustainable investments
World energy production remains overwhelmingly dominated by fossil fuels. Resources
dedicated to fossil fuels are not available for sustainable alternatives such as renewable
energy and energy efficiency.
Joining a global community for change
A growing number of local governments has decided to divest from the fossil fuel industry.
These include for example Berlin, Bordeaux, Copenhagen, Oslo, Oxford and Stockholm in
Europe, San Francisco, Seattle and Portland in the United States and many other cities in the
rest of the world. Other notable examples include the pension fund of Norway, the University
of Glasgow, three Danish pension funds, Stanford University and the Church of Sweden.