Big investors press utilities to go green

Dana Investment Advisors, the Interfaith Center on Corporate Responsibility, the Illinois State Treasurer, and 17 other investment managers controlling $1.8 trillion in assets are publicly urging electric utilities to dump fossil fuels.

On February 28, the managers issued a joint statement citing imminent “climate disaster” and noting that their portfolios “are already seeing the…economic costs of climate change…on property and agricultural [and] fisheries yields, rising pollution-related health care costs, and lost worker productivity.”

To avoid what is estimated to be trillions of dollars in financial losses inflicted by extreme weather events, the investors urge utilities to adopt a set of governing principles:

Identify an individual on the board to oversee an economically attractive transition, perhaps also creating a working group to guide the effort.

Create and publish a step-by-step transition plan to achieve net-zero emissions no later than 2050 and emphasize near-term benchmarks.

Consider impacts of the fuel shift on communities and employees and plan to mitigate them.

Base executive compensation on achieving milestones in the transition to fossil-free electricity.

Explain how any lobbying activities support the goal of eliminating fossil fuel use.

Citing eight-state Xcel Energy’s recent pledge to go fossil-free by 2050, the investors note that “never before have the economics of a transition to net-zero emissions been so favorable” now that the cost of wind and solar power in many parts of the US “have dropped to be at or below the cost of coal and natural gas.” TJ 

TREND FORECAST

Market forces have been pushing coal toward obsolescence and political pressure is mounting against oil and gas. This blunt public statement by investors – implying that their money won’t stay with utilities that ignore their wishes – indicates that institutional money is moving away from conventional fuels to renewables, further accelerating a massive market transition to green energy.