NYC and London Mayors Urge Global Cities to Divest from Fossil Fuels

New York Mayor Bill DeBlasio and London Mayor Sadiq Khan issued a report Tuesday imploring cities around the world to divest from fossil fuel activity, citing that “time is running out” with respect to the existential threats posed to the planet from greenhouse gases.

“By divesting, we are taking the fight directly to the big oil companies whose greed put us in this position,” DeBlasio said in the report. “And by investing in climate solutions, we are throwing our economic weight behind a livable future.”

The mayors released “Divesting from Fossil Fuels, Investing in Our Future: A Toolkit for Cities,” an outline for cities to incentivize and mobilize their teams to disengage from the fossil fuel industry. The toolkit reviews financial incentives for divestment, tactics to advocate and rally the public interest towards divestment, case studies related to divestment, and putting rules and regulations in place for public pension funds to divest.

A few case studies highlight key victories in divestment from fossil fuel operations around the world, namely New York City’s own commitment for complete divestment from fossil fuels, as well as similar pledges by Auckland, Berlin, Copenhagen, Melbourne, Oslo, London, and Stockholm, many of which pledged for full divestment by 2050.

The report also highlighted financial incentives ties to decarbonization of a fund’s portfolio. “There is a strong argument that low-carbon investment can present a further risk management function which squares well with fiduciary duty,” the report said. “Pursuing [sustainable solutions] allows city pension funds to tap into the significant opportunities linked to the low-carbon transition. With sustainable investment no longer being niche, options exist across a wide range of asset classes.”

The report cites that the fossil-fuel industry is bound for huge losses over the upcoming decades under a 2-degree Celsius policy scenario, with the oil industry accounting for $22.4 trillion of losses, gas for $5.5 trillion, and coal for $5.8 trillion. The mayors implore cities to divest before incurring such huge losses.

Another avenue discussed was to rally public support that could incentivize legislators to introduce legislation that would stymie the breadth of fossil fuel-related investments a public pension fund could become involved in.

“Due to their leadership and influence, in some cities it may be beneficial for the mayor to personally promote the divest/invest commitment with the trustees,” the mayors said in their report. Such promotion could be highlighted with argument supporting the rise of sustainable investment opportunities, climate-related financial risks, and portfolio performance related to fossil fuel investments.