#INVESTFOSSILFREE (ASSET MANAGERS)
#INVESTFOSSILFREE (ASSET MANAGERS)
Want your investments to stop financing the fossil fuel industry?
Add your voice in asking asset managers to give us all the option of investing fossil-free.
Please watch, share, and add your voice
Your asset manager invests on your behalf. Let them know that you want your money to profitably match your values.
You DO have a say in how the future is financed.
Without realising it, many of us are investing in the biggest agents of climate change – fossil fuel companies – through our pensions and investments.
We’re trying to change that by building public support for funds free of fossil fuels.
Then we’ll engage with asset managers on behalf of the people who want these funds.
Fossil fuel divestment is a global movement calling people to withdraw their money from investments in fossil fuel companies. Over $40 trillion in endowments and portfolios are already in!
This puts pressure on fossil fuel companies contributing most to climate breakdown.
Divesting from fossil fuels frees up capital for reinvestment in safer, cleaner, and more ethical options. Divestment is hard in South Africa. But by showing asset managers there’s demand for fossil-free investments, we can change that.
We’re not asking asset managers to divest 100% overnight – just to create more fossil-free options for the many people who want them.
You have more power over climate change and the companies causing it than you realise.
By choosing investment opportunities that prioritize clean energy, responsible governance, and social impact, you can ensure your financial growth while contributing to a future where profits and planet preservation coexist.
THE HISTORY OF THE CAMPAIGN
In 2017 and 2019, we organized workshops with asset managers and retirement funds to discuss divestment.
In 2018, we ran a social media spotlight campaign alongside a petition, urging South Africa’s top asset managers to offer fossil-fuel-free investments. The campaign highlighted the climate crisis and human rights violations caused by our fossil fuel economy.
In 2019, we launched the #InvestFossilFree campaign, collecting signatures from top asset manager clients.
In 2021, Alan Gray rejected our call for a fossil-free fund. We continue to gather support and engage with other universities after successfully pushing UCT to commit to divestment in 2022.
HOW CAN I SHARE THIS CAMPAIGN?
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The #InvestFossilFree Campaign aims to build and consolidate public support for fossil-free investment funds by engaging with the clients and decision-makers of leading SA asset managers: Allan Gray, Coronation, Investec, Old Mutual, Sanlam, Stanlib, and the Public Investment Corporation (GEPF).
Some of these asset managers have often told us their clients aren’t interested in this kind of fund. Others haven’t asked. When you sign up, you prove them all wrong. We will then write letters on behalf of you and engage with your asset managers.
What will we do with the letters?
- We will send these letters to the asset managers,
- request constructive meetings, and
- hopefully give you an opportunity to join meetings to engage in constructive face-to-face dialogue
- If they refuse meetings and still don’t act, we will consider actions such as non-violent protests to build public awareness of these issues and draw attention to their irresponsibility.
We have a track record of success – we led the movement to persuade the University of Cape Town to divest.
FREQUENTLY ASKED QUESTIONS
Continued investment in fossil fuels poses the following grave risks to both investors and society at large:
- Continued under-investment in the green economy needed to avert the worst dangerous climate change.
- Continued social licence for an industry that has become very dangerous, exploitative and corrupt.
- Continued decline or crippling of the South African economy by the negative external effects of fossil fuels: climate breakdown, missed development opportunities, economic volatility, deadly air pollution, excessive water use, continued corruption, poor governance (strongly associated with these industries) and global (the fossil-fueled Ukraine war) and regional conflict (the insurgency in Mozambique).
- Loss of returns on investments due to these factors (asset stranding).
- Missed opportunities for investments in the green economy.
Possible sharp loss of capital in a carbon bubble scenario.
- Fund managers are the financial specialists who decide how most of the money you save in your retirement fund or unit trust is actually invested: e.g., how much of it goes offshore, how much is invested in bonds, how much in property, how much in which companies.
- Fund managers have enormous power in society. As one SA asset manager says, asset managers “decide how the valuable savings or resources of a population are allocated for growth and development”. But at the moment, South Africa’s asset managers have effectively allocated many of our resources not for a thriving economy and healthy environment, but for a crippled economy and devastated environment. They didn’t do this maliciously or deliberately. But they’re still applying the investment logic of the 1960s when the evidence is now overwhelming that this is a recipe for disaster. Many of them are very concerned about climate themselves, but say they need you, the asset owners, to first start noisily demanding this kind of change so they can beat institutional inertia.
- None of them, to our knowledge and despite their purported concern over climate change, have meaningfully educated or canvassed their clients on the issue.
- Overseas fund managers do already offer many fossil-free investment options. They’re easy to find if you live in the US, UK, Europe or Australia. The world’s biggest asset manager, Black Rock, has also to some degree made addressing climate change a priority. But there are still no fossil fuel-free options for ethical and responsible South African investors. We have to change this. In the long term, all investment should be responsible (or better regulated).
- So-called ESG investment can be helpful, but can also be a mass smokescreen for inaction and greenwashing. We like ESG mostly only when it leads to outright exclusion of the worst permitters.
South Africa’s biggest asset managers collectively manage over R2.7 trillion. Over 10 million South Africans participate in various forms of collective investment via savings, retirement funds and unit trusts. Even more are connected to financial services. This represents enormous potential power for creative change, if even a small proportion of this capital is redirected towards truly environmentally and socially responsible investment.
Of course. You have standing wherever you have money invested.
We’re still some way from seeing actual fossil-free funds created. It’s possible you may get lower returns, but there are many good reasons to think that fossil-free funds in South Africa can get acceptable or even improved returns. The two substantially fossil-free funds that we are aware of are delivering acceptable performance. Divesting will help protect you against stranded assets and the sharp loss of returns threatened by a possible carbon bubble.
Yes, we’re all still dependent on them. But we have to phase them out very fast, in favour of reduced energy demand and renewable energy sources such as wind and solar. We’re NOT asking that all fossil fuel companies shut down overnight, just that they start cutting their emissions at the speed that scientists have figured out is needed to keep average global warming below 1.5C; that is, at least 7.6% emissions reductions annually. Unfortunately, despite their claims, few if any are doing so.
We’re not saying the asset managers should immediately sell off all their Sasol shares if they and most of their clients don’t want to. We’re just saying they should make it possibly for those of us who do want to divest, to do so more easily.
We think any credible fossil fuel-free fund also needs to exclude destructive industries such as tobacco, armaments and intensive meat production; and that all investable companies should be screened to ensure they score well for their environmental, social and governance (ESG) practices.