Over 400 institutions and 2,040 individual investors with combined assets under management of $2.6 trillion (€2.3 trillion) have committed to withdrawing their capital from companies doing business in fossil fuels.
The Arabella Advisers report shows the increase in investor pledges to divest away from fossil fuels has increased dramatically. As of September last year, similar pledges totaled $50 million, whereas now the total assets of those investors committed not only to fossil divestment but also reinvestment of their capital into climate-friendly alternatives amounts to $785 billion.
Investors have made the pledge in advance of the World Climate Conference in Paris taking place later this year.
Jochen Wermuth, chief investment officer of Wermuth Asset Management, a German asset manager which specialises in environmental and social governance (ESG) investing, says that these pledges are a clear sign that a large number of market participants are no longer ignoring the negative consequences of climate change and are instead taking decisive action.
The increase is largely attributable to pledges from pension funds, family offices and other major investors, who now together make up 95% of the asset total.
There has also been a marked rise in the number of universities, municipalities, churches, healthcare organisations and foundations which are withdrawing from the 200 exchange-listed companies with the largest carbon-based fuel reserves and instead investing in climate-friendly businesses
“We are in the midst of a new industrial revolution, from the fossil fuel age to a climate-friendly economy,” says Wermuth.
“In the course of this transformation, there will be significant losers as well as new, up-and-coming resource-efficient companies, such as in the areas of renewable energy, electro-mobility and electricity storage.”
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