National Trust to divest from fossil fuels

The National Trust has announced plans to divest its £1bn investment portfolio from fossil fuels, in a bid to play its role in tackling climate change.

The charity, which holds over 612,000 acres of land in the UK, has said it will divest from fossil fuels within the next three years. It currently holds around £45m in fossil fuels.

Its current investment policy requires no investments to be made directly in companies which derive more than 10 per cent of their turnover from the extraction of thermal coal or oil from oil sands. Its new policy will prioritise climate change, restricting the charity from investing any of its funds in companies of this nature altogether.

“Returns from our investments are vital for helping us protect and care for special places across the nation, " the charity said in a statement. "They enable us to look after the natural environment and keep our membership fees affordable."

However, it stressed the impacts of climate change "pose the biggest long-term threat to the places we care for".

"We take our responsibilities towards the environment very seriously and are committed to playing our part in helping the UK achieve net zero emissions,” it said. “We will do everything we can to protect the natural environment and we’re changing our investment policy to support this.”

The new measures include:

• Divesting from all fossil fuel companies within the next three years.
• Establishing a long-term goal to continue the reduction of the carbon footprint of the investment portfolio.
• Increasing engagement with companies currently invested in, to continue to make material improvements in their environmental performance.
• Actively seeking out opportunities to support green start-up businesses.

“We know our members and supporters are eager to see us do everything we can to protect and nurture the natural environment for future generations. This change is part of our ongoing commitment," the trust's director-general Hilary McGrady said.

Increasing pressure

The move by the National Trust comes amid increasing pressure on charities to play a more significant role in mitigating climate risks.

In March, a coalition of some of the UK’s largest charities urged the Charity Commission to seek a landmark ruling that could force charity trustees to prioritise mission-based investing over financial returns.

The charities, including RSPB, Joseph Rowntree Charitable Trust, Nesta, Ashden Trust and ClientEarth, which have been supported by law firm Bates Wells, urged the regulator and Attorney General to make it a legal duty for charity trustees to ensure their investments support their charitable aims and their duty to provide public benefit.

But furthermore, they also requested specific legal guidance on whether charities should invest in companies that contribute to dangerous climate change, noting that temperature rises above the UN target of 1.5 per cent “present substantial risks to the overall economy, as well as to individual investment portfolios” and may undermine the aims charities exist to achieve.

“A court might conclude that there is some form of presumption that a charity investor’s investment strategy ought to be compatible with a transition to a ‘1.5C world’,” they said in an open letter.

The coalition also warned there is a risk charity trustees “misinterpret” their duties because the current law is “outdated and insufficient”, calling upon the Attorney General and Charity Commission to refer the issue to the Charity Tribunal for an ‘urgent and definitive’ ruling.

The request came after the UN Intergovernmental Panel on Climate Change warned the world has just 12 years to limit climate change to 1.5°C. Even an extra half degree of global warming would significantly increase the risks of drought, floods, extreme heat and poverty for hundreds of millions of people, it said.

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