On 22nd October the World Medical Association passed a resolution calling on their members and health organisations worldwide to divest from fossil fuels, and reinvest in organisations upholding environmental principles.
This week in Marrakech government representatives from around the world will be discussing how they are going to meet the Paris Agreement commitments. At the conference the interests of the fossil fuel industry will be represented by 13 business interest NGOs. This is despite the fact that it is known the fossil fuel industry took a lead from the tobacco industry when sowing public doubt about the causes of climate change, and have held back progress towards binding global agreements on climate change.
The World Health Organisation has long recognised the conflict of interest that the tobacco industry has in tobacco control, and excluded them from tobacco control negotiations. Meanwhile the wider health sector led calls for tobacco divestment and regulation. Climate change is now recognised as the new tobacco – will you help weaken the power of the fossil fuel industry by calling on your Royal College to divest from fossil fuels?
A version of the letter below will be sent to members of the recently formed UK Health Alliance on Climate Change. We congratulate the Royal Colleges on joining forces to call for action on climate change, and hope that the Colleges and members agree that one of the most effective ways to lead the energy transition is to divest from fossil fuels and reinvest in clean energy and technology.
If you support this and are a member of one of the Organisations listed below please read and complete the form to add your name.
To the [President and/or CEO, Director of Finance, and Treasurer and/or Chair of Trustees
Re. Divestment from fossil fuels
On 22nd October the World Medical Association (WMA) at its annual assembly in Taiwan, called on health organisations to divest from fossil fuel based companies and to invest in companies that uphold environmental principles. We agree with the view that health organisations have a moral responsibility to accelerate the energy transition, and that just as health professionals divested from tobacco companies because it went against our professional values, we should now divest from fossil fuels. Moreover, the UN Environment Programme have this week stated that the window on 1.5C global warming will close within three years, highlighting the urgency of the need to transition to clean energy.
We’re very pleased to know that [xx] Royal College supports action on climate change and has joined the Health Alliance on Climate Change. However, we’d like to see the College go further and take a stronger stance on fossil fuel divestment. We believe it is potentially one of the most effective means available to a Royal College to accelerate the energy transition.
In particular, as members concerned about the College’s purpose of the [advancement of health / other], we’re very aware that it is children, older adults, people living in poverty, and with disabilities or chronic conditions, who are among the most vulnerable both to the impacts of climate change and to the direct effects of air pollution.
The fossil fuel divestment movement calls for a commitment to divest from the 200 largest fossil fuel companies by listed coal, oil and gas reserves over a period of five years, with an initial freeze being placed on all direct investments. The initial pledge is the most important as it sends a message that there is demand for fossil free investment portfolios, and several such funds are now becoming available in the UK.
We appreciate that excluding fossil fuels will have an impact on the range of investments in the college’s investment portfolio. However, the risks associated with the assets becoming stranded, given the recently ratified Paris agreement, mean that many analysts, backed up with historical data demonstrating that fossil free portfolios outperform those containing fossil fuels, now argue that divesting fossil fuels is an effective form of risk management.
As doctors, reputational risk is also a concern to us. Given that many large investors, including the Rockefeller Foundation and the Norwegian Sovereign Wealth Fund who made their wealth from fossil fuels, have committed to divest, the health sector risks looking like it is taking a back-seat.
Last year Christopher McCall QC published a landmark opinion on fiduciary duties of charities as they pertain to fossil fuel investments. In this he concluded that divestment is certainly legal and arguably essential to meeting the fiduciary responsibilities of charities with a health purpose.
In relation to divestment, asset owners are often asked if they are ‘future-makers’ or ‘future-takers’, i.e. whether they want to lead the energy transition, or just reduce their own financial risk. Given the membership of the HACC and stance on air pollution and sustainability, we believe many members would endorse the role of the College as a future-maker.
We would also like to ask whether there is a set of criteria against which you measure the effectiveness of engagement? For example, could you identify targets such as the number of fossil fuel companies committing to change their business model – to strand their assets and transition to clean energy generation by mid 2017, and measure achievement against those targets? Unless engagement is proven to be successful, we believe it is imperative that the College instead divests from fossil fuels.
Finally, we would like to draw your attention to the growing range of fossil fuel free investment funds now available to UK investors, which are a fairly recent development. Would the RCP be willing to discuss and hear more about the alternative investments available and which help address the issue of feasibility of divestment?
Kind regards etc…
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