There’s more carbon in the ground than we can safely burn if we hope to keep global warming below 2 degrees C. Bill McKibben at 350.org has done the math and taken it on the road. Mark Campanale at Carbon Tracker (see article in the June issue of Alliance) is educating investors about where the red line is beyond which safe investments cannot be made. Greenpeace has catalogued the largest unexploited deposits of carbon[1] and made the case that not all of them can be exploited. Students are getting traction with university fund managers on the need to divest fossil fuels.

Knowing that going cold turkey all at once is very hard, strategists are advancing the practical suggestion that fund managers start by stripping the dirtiest energy sources – like tar sands and coal – from their portfolios. In response to calls like Julian Poulter’s (also writing in the June issue of Alliance) that foundations actively engage by aligning endowments with sustainability, it appears many finally are. Several new announcements are likely this fall by charitable endowments working in concert.

Meanwhile, President Obama has announced a far-reaching climate plan. In it, he says he wants the US to stop providing public financing for coal power plant development. The billions in loans, guarantees and private investment that multilateral banks leverage for dirty power may finally be coming to an end.

It definitely feels like something big is happening. Awareness is building. Numbers are being calculated. Plans are being laid. Signals are being sent. Practical steps are being taken. A serious movement to adopt and implement criteria for energy investment is beginning. The science is irrefutable now. There are limits to what we can emit. Risks for the planet and investors compound if we cross certain thresholds. Capital sources, investors and fund managers are engaging. They will play a critical role moving forward. Good news!

Michael Northrop
Program director, Rockefeller Brothers Fund

1 http://www.greenpeace.org/australia/PageFiles/480942/Point_Of_No_Return.pdf