Divestment & Climate Action

Event summary by Nayah Thu

Dr. Ellen Quigley and Dr. Jonathan Porritt spoke at this week’s discussion about divestment.

As effective legislation often comes from a place of moral indignation, Dr. Quigley asserted that we need to stigmatise the fossil-fuel industry in order to make abstract climate-change dangers seem more concrete. She mentioned the symbolic effects of divestment, which popularises ideas about fossil-fuel free societies.

Divestment must apply to all asset classes, and Dr. Quigley criticised the Environmental and Social Governance (ESG) initiative, for misleading people with “ethical” funds. Selling stocks in the secondary market has no substantial effect on firms’ capital costs or actions, as their operations are mostly financed by debt. A very small minority of banks finance most fossil-fuel production, with Barclays Bank being the worst offender in Europe.  To be effective, ESG would need to expand beyond public equity and into venture capital, private equity, and bonds. Otherwise, one is effectively “rearranging deck chairs on the Titanic”.

Drawing a parallel with the anti-apartheid movement, Dr. Quigley confirmed that we need a broad mix of techniques to enact change, including civil society pressure and shareholder aggression.

Dr. Porritt seconded this, calling universities’ failure to act on the existential risk of climate change “one of the most disgraceful failings of moral leadership I have ever seen”. He challenged the hypocrisy of commitments with no time constraints, and advocated leading by example.

Porritt introduced the “inevitable policy response initiative”, which posits that politicians will eventually be forced to go into “climate emergency mode”, facing an increasingly binary choice between crashing the economy and ending life on earth – neither of which they want. He emphasised the importance of short-term plans: actions by 2025 are needed to reach 2050 goals. Both agreed that insurance markets are instrumental in achieving divestment, by increasingly pricing assets as 'too risky'.

Questions
How does the global pandemic affect the case for divestment?

• Strengthens it: long term investors are increasingly cautious
• Coal and gas are used for electricity generation and hence unaffected
• More gas would cause infrastructure lock in
• Need an international fossil-fuel non-proliferation treaty
• COVID-recovery plans are not being utilised properly
• The EU plan looks less ambitious than Joe Biden’s aims

How best can we accelerate political change to build the legislation needed?

• Climate change is accelerating and there is a wide gap between required action and actual commitments
• We need to make greater use of non-violent civil disobedience
• With 50% support, 3.5% of the population taking part in direct action can change legislation
• Shareholders should vote against board members, but civil action is more important
• Oxford should utilise its status as an institution of enormous cultural and intellectual power
• Pre-COP-26: in this time of societal disruption, institutions are receptive to new norms, now is the time to act

To hear more of this fascinating conversation, please head to the OCS YouTube channel, where you can watch the recording in full.