The Amalgamated Bank of America is divesting its fossil fuel holdings. It's not a big deal, just 4-billion dollars, but it's the bank's reasoning that could spark seismic change.
The decision to divest its $4 billion USD commercial assets from fossil fuel holdings is supported by new legal research presented on Wednesday by global investment consultant Mercer and the Center for International Environmental Law (CIEL). Their research bolsters the recent decision by leading Canadian foundations to drop high-risk fossil fuel holdings and decarbonise their investment portfolios.
Mercer’s analysis of fiduciary duty suggests that pension trustees should now be factoring in climate change and energy transition risks into their decision-making process.
According to new legal analysis, investment fiduciaries who overlook the implications of the transition to clean energy and the wind-down of fossil fuels now underway could face legal challenges. With the world expecting Canada to ratify the Paris Agreement any day, Canadian institutions and philanthropic investors are only just coming to grips with the investment risks and opportunities linked to the low carbon energy transition.