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c o m divestment campaign targeting the Bill and Melinda Gates Foundation and the Wellcome Trust.
In the UK, the Quakers, the Joseph Rowntree Foundation, British Medical
Association, Oxford City Council, Bristol City Council, Glasgow University, SOAS University and the London Assembly, as well as the Guardian Media Group, have publicly committed to divest. Worldwide, the Rockefeller Brothers Fund, several US universities including Stanford, Australian universities, Norway’s government pension fund, and AP4, the huge Swedish pension fund, have done likewise. The Norwegian fund has already divested from over 100 fossil fuel companies.
Despite these successes, there is a murmur of disquiet. The Rockefeller Brothers Fund, for example, may have severed its ties with the fossil fuels industry but its investments continue to bolster corporate power. Can the movement be judged successful if the reinvestment they promote does not challenge corporate accumulation of capital?
Joel Benjamin, co-founder of Community Reinvest, is wary of the corporate capture of the fossil-free movement. ‘The growing movement must articulate a vision of the world it wants to create, and consider how disrupting and redirecting investment flows can challenge the status quo. Be wary of big‑four bankers and accountants offering false “solutions” to the climate crisis,’ he says.
This year, the global auditing giant Ernst and Young (rebranded ‘EY’) published a global corporate divestment study, which discusses key strategies for ‘successful divestment that optimise both speed and value’. BlackRock, one of the world’s largest pension fund asset managers, now provides a fossil fuel-free fund for charitable institutional investors in the US. Campaigners and pension holders are lobbying for a similar fund to be available to individual savers in the UK.
While a fossil fuel-free fund is a step in the right direction, should reinvestment decisions be made by the likes of EY and BlackRock? It is unlikely that such institutions will prioritise reinvestment into the areas that communities would choose. At its most transformative, divest/reinvest proposes transferring money to community renewable energy, good quality affordable housing, free education and childcare, universal healthcare, a fair and just energy system, a decent welfare system and other social ends. Some ideas of what a positive future might look like are captured by Common Weal, the ‘think and do tank’ that emerged from the radical Scottish independence movement.
To make such a future possible and to prevent our common wealth from being captured by transnational corporations, the divestment movement must challenge the passive investment culture within which individuals, businesses, and civic institutions effectively outsource important investment decisions to big finance. Reinvestment should be directed into socially useful activities and decisions made collectively, not by distant pension fund managers. By making these demands divestment can become a democratic movement that challenges the logic of capital and the financialisation and privatisation of our collective wealth.
A new energy commons Imagine an energy system that is built predominantly on community-scale renewables, and, where large-scale renewables make sense – solar farms or offshore wind, for example – the schemes are collectively owned. In such a system, there is no fuel poverty and people have a say where our financial wealth is invested. Instead of being paid out to faceless shareholders our wealth is reinvested into an energy commons and social ends. The divestment movement could play a crucial part in building this alternative vision.
In a just few decades, Denmark and Germany have gone from oil dependency to becoming world leaders in wind and solar energy respectively. The transformation is being driven by community-based initiatives underpinned by decentralised, co-operative, and municipal ownership. Similarly, publicpublic partnerships (public bodies working together) in water provision in parts of Asia, Africa, and Latin America have engaged and empowered communities, and revolutionised water provision. The divestment movement could pave the way for social change if it learns from these examples.
Currently, in the UK, community-run energy systems consist mainly of solar and hydro projects but are too small-scale to be serious contenders as reinvestment options. Fortunately, work is being done to overcome this challenge.
Offshore wind overcomes many of the scale issues and presents an invaluable opportunity for creating an energy commons. In June 2014, the UK Green Investment Bank (GIB) established a £1 billion investment fund for offshore wind and announced it is seeking ‘a suitable group of strategic, long-term co-investors’. Current co-investors include the likes of Statkraft and Statoil, indicating that the UK’s enormous offshore wind resources are very much under corporate control. But what if civic institutions – local authorities, universities, faith and health communities – used their investor power to safeguard these resources as an energy commons? For example, UK local authorities’ £180 billion pension fund is ripe for divestment and could be a viable co-investor alongside community organisations.
Mika Minio-Paluello of the campaign group Platform suggests that ‘a National Offshore Wind Fund could recycle profits to locally-controlled energy projects and pension funds invested in the offshore wind supply chain, especially into public-public partnerships and worker-run companies. Local authorities could thus use their wealth to shape who controls energy resources in Britain, moving away from multinationals towards energy democracy.’
Crucial next step At the Wellcome Trust divestment action in April 2015, Danielle Paffard from 350.org described divestment as the quickest-growing climate movement in the world. Media attention is greater than ever.
The movement is clearly at a crucial stage in developing a radical response to climate change. It needs to find common-sense ways to articulate the principles of democratic reinvestment and reparations, and enable diverse voices to participate in the framing of these principles. We shouldn’t just address private funds and investors but instead put forward the case to local authorities, universities, health and faith communities, persuading them that it is their duty as civic institutions to not just divest but to reinvest in and build our commons in energy and beyond. By doing this the movement will challenge not just the power of the fossil fuels companies but the structures of capitalism. Discrediting the fossil fuels industry is simply the first step, not the end goal. n
Jo Ram is a member of Red Pepper’s editorial collective and co-founded Community Reinvest: communityreinvest.org.uk red pepper aug | sep 2015