LE BOURGET, France: Institutional investors are fleeing fossil fuels even as many major banks continue to pour money into coal, according to reports released at a UN climate conference Wednesday.
The number of universities, governments and investment funds that have said they will drop at least some fossil fuels from their portfolios has risen sharply to more than 500, according to one of the reports, released on the sidelines of the UN climate meeting outside Paris.
The total value of the assets to be divested cannot be calculated due to disclosure restrictions, but the companies or portfolios under management are worth $3.4 trillion (3.21 trillion euros), climate campaigner 350.org reported.
A little over a year ago, only 181 institutions with assets of $50 billion had announced divestment measures, said the NGO, which maintains an online resource tracking such commitments.
The new figures show “that investors are reading the writing on the wall and dramatically shifting capital away from fossil fuels and towards clean, renewable energy,” 350.org said in a statement.
At the same time, a separate report released Wednesday at the conference said major banks were still lending billions each year to coal mining, with investments in renewables trailing far behind.
“The largest and most powerful financial institutions on both sides of the Atlantic have continued to provide billions of dollars to companies working to entrench global dependance on carbon-intensive energy sources,” according to a report by a coalition of environment groups including Friends of the Earth.
Since 2009, it said, more than a dozen of the world’s biggest banks have poured more than $250 billion into such projects.
The 12-day UN meeting, which kicked off with a summit of more than 150 world leaders, is tasked with beating back the threat of climate change and helping poor countries cope with its impacts.
How to engineer the transition away from a global economy powered by coal, oil and gas — whose emissions drive global warming — is at the heart of the fraught negotiations.
If the UN-endorsed goal to cap warming at two degrees Celsius (3.6 degrees Fahrenheit) above mid-19th century levels is to be achieved, at least 60 percent of known fossil fuel reserves will have to stay in the ground, according to scientists.
At the climate conference, Kevin De Leon, president of California’s senate, said a bill he had submitted to the legislature directs the state’s pension plans to divest all coal holdings.
“These funds manage nearly half a trillion dollars that will soon be coal free,” he said at a press conference.
Many cities around the world have moved towards shunning fossil fuels, 350.org said.
The climate conference has seen other signs of mounting pressure on fossil fuels, which still account for 80 percent of energy production and consumption around the globe.
On Monday, several dozen nations led by the Philippines, Bangladesh and Costa Rica called for a world economy powered 100 percent by renewables before 2050, the first bloc of countries to make such an appeal.
A coalition of more than 30 governments and several hundred businesses with total revenues exceeding $170 billion also called in Paris for the accelerated phaseout of fossil-fuel subsidies.
New Zealand Prime Minister John Key submitted the “Fossil Fuel Subsidy Reform Communique” to UN climate chief Christiana Figueres on Sunday.
“Fossil fuel subsidy reform is the missing piece of the climate change puzzle,” Key said in statement.
The International Energy Agency (IEA) estimates that global subsidies for the oil, gas and coal industries top $500 billion dollars.
A group of top economists and scientists including Nobel prizewinner Kenneth Arrow have called for a moratorium on new coal mines.
“The world will not succeed in keeping temperature rise under 2 C if it continues to construct new coal mines,” Richard Denniss, chief economist at the Australia Institute said in a statement.
A study released Tuesday concluded that nearly 2,500 new plants planned or in the pipeline would doom hopes of keeping global warming to safer levels.