An Oil Executive’s Take on Fossil Fuel Divestment

oil barrels

Pension360 has extensively covered the controversy around fossil fuel divestment – even organizations committed to sustainable investing are split on whether pension funds should divest from fossil fuel assets.

But it’s interesting to hear the take of a oil executive. The Financial Times asked Nigel Costeloe of North Country Energy for his opinion on fossil fuel divestment:

“I understand the sentiment and emotion of wanting to be good to mother earth and only use renewables. However, it cannot happen overnight or in our lifetime. There is no replacement for petrol as a transportation fuel at this time and the third world is developing rapidly and with that goes their demand for energy.

“[Given] the size in a financial sense of the coal industry (not to mention the political sense; many US coal states are Democrat and President Obama and his successors are unlikely to beat them up too badly), if they see their market share significantly decrease, they have billions of dollars to invest in clean technology.

“Oil and gas companies are not stupid either; they are making investments in other technologies. BP is no longer British Petroleum, as one of their stated ambitions is to move beyond petroleum, so they are major players in technology.

“Even if we could get enough renewables to supply us, the electrical grid is nowhere near capable of handling all the cars and trucks plugged in to charge batteries, [and there are] environmental issues around battery making and disposal.

“Lastly, even environmentalists agree that natural gas is a decent transition from coal and oil to something more renewable.”

Read more coverage of divestment here.


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CalPERS, CalSTRS Responds To Push For Coal Divestment


California Senate President Kevin de León said on Monday he would introduce a bill in 2015 that would require CalPERS and CalSTRS to divest from coal-related investments.

CalPERS was the first of the funds to publicly respond to the bill. Summarized by Chief Investment Officer magazine:

CalPERS responded strongly to the proposal, stating that “we firmly believe engagement is the first call of action, and results show that it is the most effective form of communicating concerns with the companies we own”.

The statement also detailed CalPERS’ “proven track record” of engaging and dealing with climate change risks within its portfolio. This included CalPERS’ work as a founder member of the Investor Network on Climate Change, and its efforts to persuade governments and policy makers to support a low-carbon future.

“We are also working aggressively with a coalition of 75 international investors worth over $3 trillion in assets to engage with the 45 largest fossil fuel companies to ensure they are taking appropriate action to manage the physical and capital risks associated with climate change,” CalPERS said.

CalSTRS released its own response as well, according to

CalSTRS highlighted its review of “sustainable investing and risk management” as well as its plan to triple the value of its investments in clean energy and technology in the next five years. CIO Chris Ailman said at the time the pension could raise its allocation as high as $9.5 billion—5% of the current value of its portfolio.

CalSTRS said climate change was “a material risk assessed across the entire portfolio that could impact current and future investment value”.

“CalSTRS believes our investment decisions must carefully weigh our duty to perform profitably with consideration of environmental, social and governance impact of those investments,” it added. “CalSTRS is a patient, long-term investor, and the ultimate impact of our investment in coal is something that we will be assessing in the coming year.”

CalPERS’ full statement, released on Facebook, can be seen here.


Photo by  Paul Falardeau via Flickr CC License