Last Tuesday, Berkeley City Council became the first city council in the nation to adopt an official policy to divest funds from 200 fossil fuel-producing companies, joining a nationwide movement to try to help curb global climate change.
Inspired by UC Berkeley student groups and the environmental organization 350.org, the city of Berkeley has committed to divest all city funds from direct ownership of publicly traded corporations defined by the city as “fossil fuel companies,” including BP, Chevron Corp. and Exxon Mobil Corp. The policy prohibits the city from making any future investments in the listed companies and aims to complete the divestment process within the next five years.
“While fossil fuel companies provide an attractive return on investment, the city of Berkeley will suffer greater economic and financial losses from the impact of unchecked climate change,” reads the new investment policy, which was originally recommended to the City Council by Councilmember Kriss Worthington.
The 200 publicly traded fossil fuel companies were chosen by Berkeley City Council due to their perceived control over the majority of the world’s oil, coal and gas reserves. According to 350.org, nearly 80 percent of these reserves must go unburned in order to maintain global warming below two degrees Celsius, a target that the United States agreed to meet at the Copenhagen climate summit in 2009.
Worthington noted that nine other cities have also made commitments to divest, but Berkeley was the first to formally adopt an official policy solidifying its divestment.
“The momentum of getting cities on board is the significance,” Worthington said. “There have been hundreds of universities involved in this movement, and I thought, ‘If the universities can do this, why can’t we?’”
The policy follows on the heels of the ASUC Senate — which passed SB 10, a similar bill, in February — divesting funds and prohibiting future investments from the same 200 fossil fuel companies. These 200 companies were originally decided on by 350.org, whose 2012 Go Fossil Free Campaign helped spark a national movement in fossil fuel divestment.
“The Berkeley City Council’s vote to divest from the fossil fuel industry is really exciting,” said ASUC Executive Vice President Nolan Pack, who co-authored the ASUC bill. “There are divestment campaigns at universities and in cities across the U.S., and the Berkeley City Council’s decision to go fossil-free adds momentum to the movement.”
Ophir Bruck, a UC Berkeley student and fossil free fellow of 350.org, suggests that reinvestment in cleaner energy sources may also be an effective strategy to help achieve this goal.
“It is the logical move to reinvest divested funds in areas of the economy that are productive in climate-change adaptation and mitigation,” Bruck said.