NYC Sues Oil Industry for Climate Change Damage and Divests Pension Funds
Something amazing happened for the climate last week.
We’re a climate-friendly company with strong sustainability commitments aimed at reducing our carbon output, so we sat up and took note.
Maybe it even made our heart flutter for a moment. So I’ll share that good news in just a moment.
The Earth is Heating Up
But first, let’s just set the scene for a moment. Unless you’ve been hiding in a cold damp cave, you’ve probably seen the news that the earth is heating up.
According to new data on global temps published by both NASA and the NOAA this month, 2017 was one of the hottest years in recorded history.
It also marks a streak of 4 consecutive years registering as the hottest on record since 1880, when we first started recording global temperatures.
2016 was actually the hottest year ever recorded, but scientists agree that El Nino contributed to the elevated temperatures.
That wasn’t the case last year. Taking into account the impact of El Nino in 2016, 2017 was actually the hottest “normal” year on record.
Meanwhile, we’re confronted with daily news about new and unprecedented natural disasters. At the same time, the current administration is all in on fossil fuels, the leading cause of climate change.
They’re opening previously unspoiled and protected national monuments--American national treasures--to coal mining, oil drilling, and shale mining. Most recently, they’re selling off the rights to offshore oil drilling across the entire US coastline.
In fact, the current administration is rolling back environmental protections as quickly as possible while inviting the petrochemical industry to set the policy agenda for the EPA and the Department of the Interior.
Here’s the Good News
Ok. It’s good to keep all that in mind. But there’s some good news to share too. In fact, it may be some of the best news for the climate we’ve heard in a long time.
This month, New York City Mayor Bill de Blasio announced that his city is divesting it’s $189bn pension fund of fossil fuels.
And NYC isn’t stopping there.
The city is also filing a federal lawsuit against the five biggest fossil fuel companies for damages sustained during hurricane Sandy in 2012.
New York has five pension funds with $5bn of that invested in fossil fuels. This move makes NYC the first major US city to divest their pension funds from fossil fuels. De Blasio’s goal is to be fully divested within five years.
Who’s Responsible for Climate Change?
What precipitated this dramatic move? In essence, New York is still suffering from the escalating costs associated with hurricane Sandy.
Climate change is cited as one of the main forces responsible for the rising sea levels and extreme weather which made Sandy so devastating.
Consequently, New York wants to hold the biggest fossil fuel firms accountable: BP, Exxon Mobil, Chevron, ConocoPhillips, and Shell.
According to Mayor de Blasio:
We’re bringing the fight against climate change straight to the fossil fuel companies that knew about its effects and intentionally misled the public to protect their profits.
This move mirrors similar legal stands taken by other cities who sued the oil industry including: San Francisco, Oakland, and Santa Cruz in California.
However, none of these cities has taken the kind of financial stand that New York is taking through divestment.
And what exactly is divestment? According to the Guardian:
Divestment is the opposite of investment. It's the shifting of stocks, bonds or funds from certain businesses or sectors.
It’s a strategy that’s broken the back of other intractable issues, most famously apartheid in South Africa.
And thanks to the hard work of a small group of activists, fossil fuel divestment has become a serious movement. Current institutional fossil fuel divestment totals over $6 Trillion with 831 participating organizations.
So how can divestment actually help thwart climate change?
After all, the oil companies have a virtually inexhaustible store of money. Well, according to Yale’s School of Forestry:
The divestment campaign aims, first, to build a bigger and stronger climate movement, and, second, to put the fossil fuel industry on the defensive by attacking its reputation and challenging the long-term viability of its business in a climate-constrained world.
It’s a moral and social strategy. In many ways, it’s core aim is to leverage divestment to fundamentally shift public opinion.
Fossil Fuel Is A Risky Investment
There are some other major players who have made divestment commitments. Norway is one of the biggest oil producing nations on the planet.
Ironically, a few years ago, the Norwegian Central Bank recommended divesting their $1 Trillion sovereign wealth fund from fossil fuels.
Why is that significant? For one, this is one of the largest pools of money in the world. So it got people’s attention. And $27bn of that fund was invested in fossil fuels.
But the real story is that the decision to divest was based on a purely economic rationale.
The Norwegian Central Bank feels that fossil fuel is an increasingly risky investment. So this was an economic decision based on the poor long-term ROI in oil investments.
As more people divest and as oil becomes more scarce, it becomes a riskier investment.
Author and activist Bill McKibben, co-founder of climate group 350.org, said the move was “as astonishing as the moment when the Rockefellers divested the world’s oldest oil fortune.”
What he was referring to was how, in 2014, the Rockefeller Brothers Fund--$860m in assets of which 7% is invested in fossil fuels--divested from fossil fuel.
There was huge symbolic power in this move because, like Norway’s Sovereign Wealth Fund, this money originally comes from oil. The Rockefeller fortune was built on the success of Standard Oil.
Now, John D. Rockefeller’s descendants are taking a moral stand against fossil fuels.
“John D Rockefeller, the founder of Standard Oil, moved America out of whale oil and into petroleum,” Stephen Heintz, president of the Rockefeller Brothers Fund, said in a statement. “We are quite convinced that if he were alive today, as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy.”
So where does that leave us?
Fossil Fuels at DCI
The path forward is clear for us here at DCI. When it comes to residence hall furniture, we strive to continually minimize the carbon output from our manufacturing process. And we’ll continue to do this.
We mitigate our carbon footprint in a few ways.
First, we use renewable biomass resources to power a lot of our operation. When you build wood furniture, one of the most energy intensive parts of the process is kiln drying the wood.
We offset all the oil and electricity it takes to do that by burning our own wood waste—sawdust captured from our machines—in our steam boilers.
Second, we heat our factory in the winters the very same way. In fact, when our wood boiler is in use, the factory does't consume any gas or oil (even during cold New Hampshire winters).
By using a wood boiler to run our kilns and heat our factory and offices, we are saving an average of 68 gallons of oil an hour or over 200,000 gallons of oil per year!
Unlike fossil fuels, biomass is carbon neutral. Forests sequester a huge amount of C02. That storage is part of the natural carbon cycle. So is the release of C02 that comes from burning wood biomass.
There are two other ways that we reduce our carbon footprint. We have an incredibly short chain of custody. That's a huge factor in minimizing transportation-related carbon emissions.
We harvest our timber within 100 miles of our sawmill which is just 70 miles from our factory.
When it comes to our solid hardwood furniture, we don’t import our raw materials from abroad, like many companies in our industry, so we dramatically reduce fossil fuel consumption that way too.
We also reduce our carbon footprint within our logistics operations by shipping our product by rail whenever possible. A fully loaded container of DCI furniture weighs 10 tons.
If the distance is 3,000 miles by rail, we are only using 60 gallons of diesel fuel to move one of our containers across the country. This calculation is based on information provided by CSX Rail Transportation.
Our entire economy is based on fossil fuel consumption. We’re not going to change it overnight. However, we’re convinced that all of these small steps matter. They add up over time. When you work with DCI, you should know that you’re furniture has a very small carbon footprint.
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