Bill McKibben, founder of 350.org and the brains behind the global divestment movement, believes climate change poses an existential threat to pension funds.
After graduating from Harvard Mr McKibben became a writer, penning the first mass-audience book on climate change, The End of Nature, in 1989. But the first half of his career was a lesson in the limits of logic and reason. Despite deploying scientific evidence with vivid turns of phrase, the message was not landing. “I had to divert myself into trying to build a movement so that we could have a fight, because that wasn’t happening, we were just losing,” he tells Pensions Expert.
In 2008, aged 47, Mr McKibben founded climate activism group 350.org. He was reborn as an activist, kicking off the divestment campaign that has now seen $8tn (£6.3tn) exit the fossil fuel industry.
UK trustees must wake up to the existential threat climate chaos poses to their pension funds, he says. “The very existence of a pension fund implies long-term planning. It implies that in 20, 30, 40 years down the road someone’s going to retire, and they’re going to need money on which to live. But they’re also going to need a planet on which to live.”
For Mr McKibben, investors are just as implicated in driving CO2 emissions as the fossil fuel producers themselves. “The idea that pension funds would be creating an unlivable planet cuts against the very core of their mission,” he says.
The idea that pension funds would be creating an unlivable planet cuts against the very core of their mission
Bill McKibben, 350.org
A change in direction might demand a change in values. Mr McKibben says the economic model of western society is premised on libertarian novelist Ayn Rand’s central idea – that self-interest is virtuous. “Contrary to what Ms Rand held, I think that human beings are built for solidarity with each other.”
As inspiring figures for the 21st century he cites Mahatma Gandhi, Martin Luther King, and “all those people who held up the idea that humans together can stand up to the mightiest forces in their world”.
Their contemporary equivalents? Greta Thunberg, Extinction Rebellion and – perhaps surprisingly – Bank of England governor Mark Carney. The planet is “running a bad fever”, Mr McKibben explains, and these are the “antibodies it is summoning to its defence”.
He credits Mr Carney’s effectiveness in urging banks and insurers to reduce their exposure to fossil fuels. “He picked up quickly from the divestment campaign this notion that we face trillions of dollars in stranded assets, reserves that cannot come out of the ground” if the world economy is to remain Paris Agreement-compliant. Logic and reason, it seems, are still alive on Threadneedle Street.
Addressing UK pension fund trustees directly, Mr McKibben urges them to read the tea leaves. “It's very clear now that the smart money has started to flee the fossil fuel industry,” he says.
For instance, the $1tn Norwegian sovereign wealth fund, whose fortune was buoyed by North Sea oil, the $1.2bn Rockefeller Brothers Fund, built on US oil, and the $194bn City of New York pension fund, at the epicentre of the world’s money flows, have all divested fully or partially. Lowering his voice, Mr McKibben adds: “One hopes pension fund managers would be as sensible.”
