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What’s really fueling your pension fund?

Stock Images: Flame Fractal Smoke Cloud Picture. Image: 220994The Financial Times ran an article about the call by the Swedish Centre party for all of the country’s national pension funds to sell off their holdings in fossil fuel corporations in order to “climate proof” and protect the value of their investments. It is important to see this position come up from within a government, in a country in which the pension funds have heavily invested in fossil fuel related funds.

This call follows the release of a very insightful report “Unburnable Carbon 2013: Wasted capital and stranded assets”, of which everyone (and I mean everyone) should read at least the Executive Summary and the recommendations to many different people who can all make a difference by avoiding silence on this topic. The core of the publication is: we cannot burn the fossil fuels currently listed on the balance sheets of all listed oil companies, as this would lead to disastrous climate consequences. Therefore, these assets will become stranded assets, worth much less than their current book value, causing serious declines in the value of these companies and their expected returns into our pension funds.

The FT article quotes senior leaders from some of the national pension funds, who acknowledge the risk and the contradiction such a divestment strategy brings with is, as historically, fossil fuel investments have been among the most reliable ones financially.

I hope this debate in Sweden causes a good stir and lots of discussion. And that this inspires governments (and many others) in other countries to follow suit in no longer being silent, being willfully blind to this carbon bubble. Only when we get this information out and have the arguments, can we inspire the creativity to use the many solutions and evidence available to create change for the better. We need to dare to disagree, as only by beraking the silence can we work together to find and apply the solutions required to tackle huge problems facing our planet.

For inspiration on daring to disagree, please watch this amazing TED talk by Margaret Heffernan. Her story is about cancer in children, but I think it transfers perfectly to climate change and the carbon bubble as well.

© Photographer: Herrumbroso | Agency: Dreamstime.com