By George Harvey
For big fossil fuel companies, the chickens are coming home to roost.
When people are unhappy with a company, one way for them to protest is to buy stock in the company and show up at the annual meeting, demanding to be heard and answered. Two organizations that have recently experienced this are the Bank of America and Comcast. Depending on the company and the rules, a group of protesters, each having a single share, can be very disruptive.
A group of organizations has taken this form of protest to a new level. Seventy organizations have come together to send letters to forty fossil fuel companies, demanding to be told what those companies were going to do about climate change and the effects it will have on their profits.
The thing that is new, and the thing that takes this to a previously unheard-of level, is that these are not environmental organizations, but rather funds, state agencies, and commercial investors. They are not holding a single share each; their combined assets are worth $3 trillion. For clarity, perhaps we should see that in numerical form; it is $3,000,000,000,000.
They are not appealing to the soft side of big business either. They are hitting its soft underbelly. They are demanding explanations of how fossil fuel companies will survive in a world undergoing changes brought about by global warming resulting from use of fossil fuels, where governments want to discourage use of their products, where their infrastructure is being damaged by human-caused phenomena, where their investments are being devalued by declining market, and where their competition is growing from sustainable power sources that do not need any fuel at all.
Some of these forty companies will almost certainly answer as demanded. After all, the investment organizations making the demands are not merely stockholders, but major stockholders – the sorts that could buy and sell big producers or, more to the point, fire their boards of directors. To be acceptable, the answers will have to acknowledge the problems they are causing, even if they deny responsibility. They are going to have to go on the record as saying that global warming is real. Some of them will probably go further and say it is manmade.
The failure to respond, which some will doubtless attempt, will be expensive. If the organizations behind the letter disinvest, the prices of stock will go down appreciably, other investors will reassess fossil fuel companies, and those investors who fail to disinvest will lose money.
A new level of change may be on the way.