States of Jersey are investing millions of taxpayers’ money into some of the worst polluting companies in the world
And why now is the time for us to boldly divest
Freedom of Information requests by Nine by Five Media have revealed that the States of Jersey, as at 31 December 2017, has invested millions into companies responsible for the greatest increases in global emissions as well as some of the worst environmental disasters the world has ever seen.
A s part for the States’ Common Investment Fund (CIF), over £69 million of public money has gone towards fossil fuel companies, a further £21 million is invested in the mining sector, with thousands directly invested in coal. CDP, along with the Climate Accountability Institute, have produced a report that shows just 100 companies are responsible for 71% of all global emissions since 1988. Here are the ones that Jersey has invested in:
Shell
Ninth highest carbon emissions producing company in the world, over £20m has been invested by Jersey into the British–Dutch multinational oil and gas company Royal Dutch Shell which has a long list of controversies to its name, from oil spills to human rights abuses. Only last year it was revealed that Shell fully understood the risks of global warming 26 years ago, issuing a stark warning on the potential impacts of climate change. Despite this awareness it invested billions of dollars in highly polluting tar sand operations, exploration in the Arctic as well as fracking.
Amnesty International in November 2017 issued a press release calling for Shell to be investigated for complicity in murder, rape and torture in Nigeria. Shell has denied the allegations but Director of Global Issues at Amnesty International, Audrey Gaughran, has stated that:
“The evidence we have reviewed shows that Shell repeatedly encouraged the Nigerian military to deal with community protests, even when it knew the horrors this would lead to — unlawful killings, rape, torture, the burning of villages.”
Shell was responsible for around 21,000 gallons of oil spilled near Tracy, California in May 2016 due to a pipeline crack, as well as two ruptures in a pipeline in Altamont, California — one in September 2015 and another in May 2016. Also in 2016, Shell dumped thousands of barrels of oil — estimated at 88,200 gallons — into the Gulf of Mexico, leaving an oil sheen of 2 miles by 13 which could be seen off the Louisiana coast.
BP
Number 11 highest carbon emissions producing company is BP, with over £18 million in the CIF. It’s also responsible for spilling oil into the Gulf of Mexico in the now infamous 2010 Deep Water Horizon oil disaster which represented the largest ever oil spill in the history of the petroleum industry. The U.S. government estimates that 4.9 million barrels (210 million US gallons) entered into the waters of the Gulf of Mexico after repeated failings to stem the flow and that the causes were down to a defective cement well, ultimately blaming BP for cost-cutting decisions and having inadequate safety systems.
Other examples include the 1965 Sea Gem offshore oil rig disaster, the Texas City Refinery explosion and leaks that killed 15 people in 2005, the largest ever oil spill on Alaska’s North Slope in 2006, toxic substance release in 2007, chemical leak in 2010, as well as a subsidiary of BP pleading guilty to dumping hazardous waste in Alaska in the 90s, violating air pollution laws in the US, out of court settlements for environmental damage in Columbia, numerous health and safety violations, including water contamination and so on.
Anglo American
Number 31 on the list is Anglo American with Jersey investing over £3 million. Its website states they are the world’s third largest exporter of metallurgical coal, operating in Australia, Colombia and South Africa, holding a 73% shareholding in Inyosi Coal, a broad-based black economic empowerment (BEE) company in South Africa.
BHP Billiton Plc
Number 20 on the list and with over £2 million invested, mining company BHP Billiton in 2013 lobbied in support of abolishing a proposed tax on carbon emissions.
The company is also responsible for the worst environmental disaster in Brazil’s history, when in 2015 a BHP Billiton and Vale owned dam, holding back waste water from an iron ore mine in south-eastern Brazil collapsed. It devastated a nearby town with mudslides, killing at least 17 people and caused enormous ecological damage that threatened life along the river Rio Doce all the way to the Atlantic sea.
Exxon Mobil
Fifth highest carbon emissions producing company in the world, and with £1.2 million invested, Exxon Mobil, was another company that knew about climate change 40 years ago — eleven years before the public did, but spent millions of dollars promoting misinformation and doubt on the topic of climate change.
In 1989 it was responsible for spilling 11 million US gallons of oil into the Gulf of Alaska, oiling 1,300 miles of pristine remote Alaskan coastline, known as the Exxon Valdez oil spill. Afterwards the company succeeded in reducing its $5 billion in punitive damages to a mere $500 million and as at 2009 it still used single-haul tankers despite the associated risks.
In 2011 an ExxonMobil pipeline ruptured spilling 1,500 barrels of oil into the Yellowstone River for around 30 minutes before it was shut down and in 2013 ExxonMobil owned ‘Pegasus Pipeline’ carrying heavy crude ruptured in Arkansas releasing about 3,190 barrels of oil and forcing the evacuation of 22 homes. The Environmental Protection Agency classified it as as a major spill with the company ultimately settling charges that it violated the federal Clean Water Act and state environmental laws.
Other companies responsible for 71% of carbon emissions that are invested in by the States include; ConocoPhillips, Total SA, Rio Tinto, Eni SPA, Statoil ASA, Glencore PLC, Sasol Ltd, Anadarko Petroleum Corp and Repsol SA.
The divestment movement
As confirmed in the States of Jersey Investment Strategies report in relation to the Common Investment Fund, the Minister for Treasury and Resources is stated as having adopted a “Responsible Investment Policy” and that the Minister: “recognises the importance of acting in a responsible manner when managing investments on behalf of the States of Jersey”.
It further states that during appointment and on an ongoing basis the government must give “due consideration to the [investment] manager’s approach to Environmental, Social and Governance (“ESG”) risk” and when making investment decisions the investment managers are required to incorporate the potential risk and value impact of ESG factors into their decisions. The Minister intends for this to “encourage investment in companies with good governance and responsible management”.
This is clearly a breach of the strategy, as none of the above mentioned companies invested in could be considered either environmentally low risk, ethically responsible, or even examples of good governance and responsible management.
They instead represent some of the most environmentally destructive and corrupt companies the world has ever seen, exploiting their power and rent seeking position to maintain profits at the expense of the public and environment we all live in.
The Common Investment Fund is currently worth a massive £2.8 billion, so the amount invested in the fossil fuel industry doesn’t even represent 5% of the fund. The argument for divesting from fossil fuels is now widely accepted as one of just plain common sense. With regular reminders of the consequences of failing to combat climate change — including by Nine by Five Media — regularly filling scientific reports and making headlines, and with advances in renewable energy technology increasing its viability and affordability, there is no better time to divest, especially if we want to be taken seriously in our role in combating climate change.
A Times article only this month made the economic case for divestment, showing that those who had chosen to divest made 8.3% more in money over last 5 years. So it doesn’t mean we have to lose out, quite the opposite in fact, and the risk of holding on to these investments will only increase as they ultimately end up becoming stranded assets. And it’s not like we would be the first to do it either.
As both the moral and economic argument grows, those who have made the commitment to divest include New York City, the British Medical Association, the Norwegian Sovereign Wealth Fund, University of Glasgow, University of Edinburgh, City of Oslo, Guardian Media Group, World Council of Churches and the Lutheran World Federation. New York Mayor, Bill de Blasio, who is bringing a lawsuit against the fossil fuel industry for causing global warming, has called for people to stop pretending:
“We know other cities and states are watching us and we want them to follow with bold climate action of their own. It’s time to stop pretending and start divesting”
So let’s start taking bold action and call on the States of Jersey, and the Minister for Treasury and Resources, to divest its investments from fossil fuels and have an investment strategy that lives up to its ethical declaration. One that contributes to a future Jersey citizens, as well as the everyone else on this planet, can benefit from.
So what can we do? We can start by signing this States of Jersey petition calling on the States to be bold and divest its investments from fossil fuels. A 1,000 signatures means a response from a Minister. 5,000 and it gets debated in the States Assembly. Let’s start the debate for Jersey:
This article was updated on the 07/08/2019 in order for the section on Responsible Investment Policy to better reflect the States of Jersey Investment Strategies report of November 2018 rather than the earlier July 2016 report that was previously cited and linked to.
