Fossil fuel divestment? «Not my job. But a wonderful partner»

Laura Berry is executive director at Iccr, the Interfaith Center on Corporate Responsibility based in New York City. As far as I know, she probably is one of the ten (five? three?) persons in the world with the deepest knowledge of what Sri is, what shareholder engagement/activism is, and most of all what are the goals you can actually reach in terms of building a better world by working in this field.

Laura Berry at Expo, in Milan, 2015 June 17

I had the great chance to have a chat with Laura (she was so kind, lots of thanks) at Expo here in Milan where she gave a speech recently at an event organized by Etica Sgr. I couldn’t help asking her about the fossil fuel divestment movement that’s spreading across the world so quickly. And massively. And excitedly.

mondosri: What is your opinion about the fossil fuel divestment movement? In which way the power of this movement can help your work?

L.B.: In that respect, I think there are a number of different and interconnected things to underline. Climate change and the problems we have created in our generation, frankly, by not paying enough attention, is a science problem, yes. But not only: it’s a political problem, especially in my country. In the US there’s such a passion around the idea that we are very clever and we can fix this problem, so let’s just burn all the fossil fuels. There’s also a lot of wealth and power connected to the energy industry. A lot of jobs, too. The most vulnerable working people in the US work in places that are connected to coal and oil industry. A lot of vulnerable people have new economic opportunities because of fracking. So people are frightened they’re losing their jobs and their livelihood. The powerful people are “frightened”, too, they’re losing their power and wealth. What I mean is that there are people who are frightened because they’re vulnerable and people who are frightened because they’re powerful. So climate change is a political thing.

mondosri: If climate change is mostly a political thing, which are the best ways to tackle it? And what finance, investors and “divestors” can do?

L.B.: If we agree it’s a political thing, we need different stakeholders to align themselves to change the policy framework. And to demand that our governments really get together to solve this problem. I think the Paris meetings are very important, since they would set new standards for commitments for major developed nations. And I think Pope Francis’ timing with the encyclical Laudato Si’ is perfect, because they just can’t do nothing now. Coming to the ethical investors’ field, there are two ways of approaching the work: one is an engagement job, like ours at Iccr. We are pushing companies to change, to take the power of their capital, of their thinking, of their research, to be part of the solution and not part of the problem. That’s our role. For example, we own tobacco stocks because we worry about conditions for the labor in the tobacco fields: if we give up our power, we no longer have a voice. And voice is the biggest plus we have. But we see the divestment movement, that’s the second way, as a wonderful and powerful partner.

mondosri: Divestment and engagement as partners, not rivals?

L.B.: Yes, because they’re raising questions, talking about these issues, getting young people involved. Remember that our work is very complex and requires patience and can sometimes be quite slow. The nature of engagement work is change over time. The nature of movement work is making demands and creating change. So I think we have the combination of a number of elements: the policy environment, the moral environment, the stakeholder environment and the movement environment. By putting these four things together I’ve an incredible faith it’s gonna be a big reaction.

mondosri: Let’s put it in this way: divestment can boost your work. Correct?

L.B.: It has already boosted our work! Because together we’re stronger and more powerful. Let me also say that there are times when we do decide to divest. For example, when an organization is operating in a very politically difficult part of the world we may think of stepping aside. Divestment is not our job, I say it again, and it doesn’t make sense to divest when your job is engagement. That said, not only the moral issue but also the financial risk issue being raised by the divestment movement are good questions: if there’s a price on carbon, if we have a carbon tax, if we begin to regulate, from a business point of view is it sustainable to have all of these stranded assets in our balance sheet? I think they’re very good arguments that come from the fossil fuel divestment movement.

Many thanks, Laura.

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