Representatives from 192 countries have been meeting in Katowice, Poland for the past two weeks to set the ‘rulebook’ on climate actions and benchmarks. Granted, it’s been busy here in the UK too, but with so little coverage of such an important summit I’m left wondering, who owns the changes we so urgently need?
The issue, and the ability to act, can feel far removed from our lives. What would it look like for us all to take ownership of it? Here are three takes on ownership which are helping to make the change:
Responsible asset ownership (and disownership)
To keep warming below 2 degrees 75% of all known fossil fuel reserves cannot be exploited, and new exploration must not take place. The line in the sand is clear, fossil fuel companies cannot continue with their current business models. Instead we must rapidly grow renewable energy technology and provision.
For investors in these firms, or others who distribute or rely heavily on fossil fuels, there are two important considerations:
Firstly, that these assets may become ‘stranded’ as regulation, shifting energy markets, or physical stranding mean that the fossil fuel reserves, upon which the company values are based, can no longer be exploited.
Calculating the scale of this financial risk is difficult, but a recent report put the size of this ‘carbon bubble’ in the trillions of pounds. From a purely financial perspective they therefore become a risky investment, instead gains are set to be found in an expanding renewable energy market.
Secondly and critically, investors must ask themselves if, in the knowledge of the urgent need for transition, they are willing to remain invested in fossil fuel firms from an ethical perspective.
In recent years responsible ownership has become an increasing focus for investors across sectors. ESG (environmental, social, governance) are factors by which investments can be reviewed for impact and performance. From pushing for Living Wage to reforming executive pay, this approach recognises that firms with strong environmental, social and governance policies will perform better than those who disregard these risks to their business, and evidence shows that portfolios with strong ESG standards outperform benchmarks.
However, when it comes to fossil fuels firms, this engagement is proving not to be a strong enough tool. Firms are continuing with exploration and exploitation and a recent report has shown that no major firms are set to reduce their emissions in line with the required benchmarks.
The Divest Invest moment is pushing instead for investors to sell their investments in fossil fuels and instead channel their energies into accelerating the transition to sustainable power supplies. The sends the strong message that firms who disregard the urgent need to prevent climate disaster do not have the social licence to operate.
Not doing this leaves investors open to public challenge. The National Trust were recently shamed for having significant investments in fossil fuel companies, as were Barclays – most recently by Neil Young who refused to be part of a concert sponsored by Barclaycard.
Many of us are owners of assets with a direct influence on carbon emissions, perhaps without us even realising it - through pension funds or, maybe, through personal investments. The organisations we interact with, our workplace, our bank, our local authority, the NHS, will also be owners of these assets. We should be asking ourselves if responsible ownership is taking place and, if not, seek to influence them as citizens or customers to take better steps. Sometimes the most powerful thing you can do is to disown something.
To find out more check out ShareAction or info on ownership and engagement; look at the Divest Invest movement; and ask questions of your pension fund, bank, and others.
Brighton Energy Coop builds renewable energy schemes across the city and local area. These schemes are owned cooperatively by hundreds of people from the local community and beyond and Brighton Energy are just one of many such organisations which can be found around the world.
The community energy movement highlights the potential for grassroots led solutions to climate change. As part of addressing climate issues they are working to shift our economy towards one which delivers common good as its goal, not as an add on. In this case it decentralises the control and profit from energy production and puts in into many more hands.
Where community energy has pioneered others are following. From community shops to pubs to banks, these institutions are helping to transfer power back to communities and give them the opportunity to shape a more sustainable and fairer future. Creating a wide base of ownership is key to this, as Ted Howard recently explained in his RSA talk about Community Wealth Building.
Watch out for more on this subject from the RSA Economy team over the next few months.
Reclaimed ownership - which isn’t about ownership at all
My great-great grandparents didn’t recognise land ownership as we know it today. They then, and thousands of other First Nation peoples across Canada and the north American continent (and beyond) to this day conceive of ownership of land and resources in a very different way. Beliefs vary between peoples but there are common threads which regarded land as sacred, as relatives or ancestors, or as places of origin. Crucially, these are understood to be for preservation and stewardship not for exploitation.
For years these relationships and rights to their ancestral lands have been disregarded and severed. But increasingly, they are being recognised and these acts of social justice are also lights in the climate movement. From the Trans Mountain to the Dakota Access pipelines, Indigenous peoples have been at the forefront of campaigns resisting exploitation of the land and extraction of fossil fuels.
Not only can ownership rights for Indigenous groups practically halt exploitation, their understanding of humankind’s indivisible connection from the world around us cuts straight to the heart of the matter: science is the route to change but spirit is the fuel.
Climate change is a truly systemic challenge. No individual person, organisation or country can solve it, instead we must all take ownership by taking action ourselves and by pushing others in positions of power and influence to do more, and more, and more.
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excellent blog Josie thank you. I strongly recommend anyone interested in these topics, but especially how to shift investment from fossil fuel industry to renewables and eco-system protection, to contact Andy Agathangelou FRSA. He chairs the Transparency Task Force (TTF) which is currently looking at strengthening the regulatory levers on ESG risks in financial services. I went to an excellent symposium on this on 17/Dec - see https://www.transparencytaskforce.org/previous-events/london-17th-december-2018/