The National Trust to divest entirely from fossil fuels
Europe's largest conservation charity has announced that it will divest from all fossil fuel companies within the next three years.
The move will be made as part of a string of new measures developed to ensure that the National Trust’s investment strategy aligns with its aims as a conservation charity.
The National Trust currently has around £40m invested in fossil fuel firms – an amount which represents 4% of its total £1bn+ portfolio of stock market investments.
The strategy will see all of this money divested by July 2022 at the latest, with the majority of divestments set to be completed within the next 12 months.
“Many organisations have been working hard to persuade fossil fuel companies to invest in green alternatives, but these companies have made insufficient progress and now we have decided to divest from them,” the National Trust’s chief financial officer Peter Vermeulen said.
“The impacts of climate change pose the biggest long-term threat to the land and properties we care for and tackling this is a huge challenge for the whole nation,” the National Trust’s director general Hilary McGrady added.
“We know our members and supporters are eager to see us do everything we can to protect and nurture the natural environment for future generations.”
Other key aspects of National Trust’s new financial strategy include new measures to better financially support green start-ups and the creation of a long-term carbon reduction goal for the portfolio. National Trust currently analyses the carbon footprint of its portfolio on a bi-annual basis but its yet to set a numerical, time-bound target for reducing this.
In setting such a target, the National Trust will be joining the likes of BBVA, BNP Paribas, Standard Chartered and Société Générale, which recently followed ING’s lead in pledging to align their portfolios and long-term investment strategies with the Paris Agreement.
Moves to divest from fossil fuels have become increasingly common in recent years, amid increased climate pressure from investors, policymakers and the general public.
Climate action group Unfriend Coal revealed in its latest report that 24 of the world’s largest investors have collectively excluded coal from $6trn in assets, as the trend towards divestment from carbon-heavy projects and products continues.
More specifically, the likes of Legal and General Investment Management (LGIM), the University of Cambridge, Lloyds of London, Aviva, Allianz, Axa, Legal & General, SCOR, Swiss Re and Zurich and The Church of England have now all begun their divestment process.
However, critics of divestment have pointed out that the process, by nature, can be seen as shifting the responsibility for the high-carbon asset rather than withdrawing finance from it altogether.
Speaking at The Economist’s Climate Risk summit in London on Tuesday (2 July), HSBC’s global head of sustainable finance and group head of strategy, Daniel Klier, argued that working with businesses classed as “problem children” was likely to drive more change than simply divesting from them.
“You can either go after the obvious problem children and risk excluding them from the financial sector or try to achieve something a lot more integrated,” Klier said. “We are probably using both methods but moving money away from risk will not more the trillions – it will only address the certain pockets of the economy where we’re already seeing climate risk.”