Top fund manager to get rid of all fossil fuel company shares

BMO Global Asset Management said all of its 'responsible' funds, which manage around £1.5bn in assets would completely divest from companies holding oil, gas or coal reserves

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The Independent Online

One of the UK’s biggest ethical fund managers has begun offloading millions of pounds of shares in fossil fuel companies.

BMO Global Asset Management said all of its “responsible” funds, which manage around £1.5bn in assets would completely divest from companies holding oil, gas or coal reserves by 1 January 2020.

The Archbishop of Canterbury, Justin Welby, reportedly played a key role in the decision, as president of BMO’s responsible investment council. In 2015, the Church of England sold its own holdings in thermal coal and tar sands - two of the most polluting fossil fuels.

BMO said in a statement on Monday that it had seen increasing demand for strategies that allow investors to avoid companies that contribute significantly to climate change.

BMO director Vicki Bakhshi said: “If all current known reserves are extracted and burnt, we know that the world would not meet the 2 degrees temperature limit established under the Paris Agreement. 

“As such, we have come to the view that investment in companies with fossil fuel reserves is increasingly incompatible with the ethical and sustainability objectives of the responsible strategies range that we run.”

Last year - the hottest on record for the third year in a row - was about 1.1 degrees Celsius above the pre-industrial level, according to Nasa and the Met Office. The number was boosted slightly by the natural El Nino weather phenomenon. Svalbard in the Arctic has seen average winter temperatures rise by up to a staggering 11C compared to the average between 1961 and 1990.

An overall warming of 2C across the planet is considered by many scientists to be a tipping point, beyond which climate change may become irreversible.

It is estimated that the world can afford to burn no more than one third of known fossil fuel reserves to stay below that level.

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