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PRO FORMA LETTER FOR ENGAGING WITH YOUR FINANCIAL INSTITUTION ON FOSSIL FUEL
DIVESTMENT
To Whom It May Concern:
RE: Investment risk of fossil fuel companies
Dear Madam/Sir
I am writing to you because I have become aware and concerned about the risks posed by the ongoing
commercialisation and burning of fossil fuels such as coal, gas and oil on our global climate and also
importantly the growing view that exposure to investments in companies with high involvement in
these carbon intensive industries is financially risky. Because of this concern I have recently signed a
pledge to divest all of my financial dealings away from companies involved in the fossil fuel sector.
I understand that the latest report of the UN body of eminent climate scientists, the IPCC
( Intergovernmental Panel on Climate Change), has declared that 80% of known stock market listed
reserves of fossil fuels will need to be left uncommercialised and remain in the ground in order to
avoid dangerous global warming of over 2 degrees C. The World Bank and the IEA (International
Energy Agency) concur with this finding with the bank declaring it will no longer fund any more coal
fired power stations in developing countries.
These developments are part of the building global momentum for stronger action to limit carbon
emissions. This is reflected in the recent agreement from the 2015 Paris summit to limit global
warming to 2 degrees with an aspirational target of (the already dangerous) 1.5 degrees.
It is now becoming apparent that fossil fuel companies are increasingly being seen as poor long term
investment options as much of their value is derived from reserves that will not be realisable.
In light of this, I would like to ask four questions that will help me understand how well you manage
climate risk as well as climate based investment risk. These questions will assist me to understand the
degree of fossil fuel exposure of your business and to guide my relationship with you:
Could you please inform me:
•
If you/your company accepts the notion of “unburnable carbon” – that 80% of the
world’s owned fossil fuel reserves must remain in the ground if the world is to have a
50% chance of avoiding 2 degrees of warming?
•
Do you have any loans or investments in companies involved in the fossil fuel (coal, gas
or oil) business?
•
How much money do you have invested in companies exposed to the fossil fuel sector?
•
Do you have any plans to divest from the fossil fuel sector in order to protect the
environment and lesson your exposure to financial risk from the so called fossil fuel
bubble?
I look forward to your response.
Footnote
If the known stock market listed reserves of fossil fuels, coal, gas and oil were commercialised and
burnt the IPCC estimates the world would be heading towards at least 4 degrees of warming above
pre-industrial levels which would result in catastrophic changes to the climate of earth.