Dive Brief:

• The mayors of 12 major cities around the globe have pledged to divest from fossil fuel companies in an effort to further support a green and sustainable COVID-19 recovery.
• The C40 Cities-backed declaration, unveiled at a virtual Climate Week NYC event on Tuesday, calls on signatories to commit to divesting all city assets and pension funds from fossil fuel companies; increasing financial investments in climate solutions; and advocating for fossil-free finance from other investors. 
• The signatories include the mayors of Los Angeles, New Orleans, New York and Pittsburgh, along with the leaders of eight international cities including London and Oslo. Details of individual divestment amounts and timelines were not shared. Following this commitment, cities must navigate their specific divestment processes and structures in proposing next steps to pension boards.

Dive Insight:

In the wake of COVID-19, many cities around the globe have doubled down on efforts to pursue a resilient, low-carbon recovery from the pandemic. Yet, according to Energy Policy Tracker, more than $200 billion in COVID-19 recovery funds are currently pledged to fossil fuels, signaling a need for cities to go beyond local projects in facing the industry at-large.

Efforts from cities to take down Big Coal began far before the COVID-19 pandemic. In January 2018, New York City Mayor Bill de Blasio announced a commitment for the city to divest its pension funds from fossil fuel companies in five years. The city is still on track to meet that commitment, and plans to present its pension boards with a divestment gameplan that will be voted on by the end of the year, said New York's Chief Climate Policy Advisor Dan Zarrilli. 

"It was clear to us that as we were making all of these investments in electric vehicles and renewable energy and other things that if we’re still invested in fossil fuels, we’re simply betting against ourselves," Zarrilli said, noting the city is also working to invest $4 billion in climate solutions by 2021.

Despite New York's earlier commitment to divest from fossil fuels, its participation in this new declaration is a gesture of support for a larger coalition-building effort in taking down fossil fuel companies, Zarrilli said. New York has pursued this coalition building since 2018 when it developed the Divest/Invest Forum, in partnership with the City of London.

A public declaration from a group of leading cities "sends a huge signal to the marketplace," Zarrilli said, which is key to leading this charge and effectively pursuing a green recovery.

"It’s absurd how much we as a globe continue to subsidize fossil fuels, and part of the call here is to make sure our green recovery ... is pulling those subsidies out" and instead putting investments toward green jobs and clean infrastructure, Zarrilli said.

"This is our last best chance to get it right while we’re facing down the scientific realities of climate change. This is the moment where we need to spend differently, to invest differently, to create those green jobs of the future and make sure we put ourselves on a different path that is not one of climate destruction.”

New York also filed a lawsuit in 2018 against five major oil companies — BP, Chevron, ConocoPhillips, Exxon Mobil and Royal Dutch Shell — but it was dismissed. Zarrilli said the city's appeal is still active in the 2nd U.S. Circuit Court of Appeals, sitting among a "growing groundswell" of climate litigation across a number of circuits.

"I'm heartened by the activity that we're seeing from other cities ... It's only getting bigger and bigger," Zarrilli said. But he noted that every city faces different complexities when trying to adjust investments while satisfying fiduciary responsibilities. To assist in this work, C40 Cities and the World Resources Institute recently shared a report detailing seven investment priorities for a green recovery.

The coalition's divestment announcement comes amid corporate pledges to divest from fossil fuel companies. In January, asset manager BlackRock pledged to divest companies generating more than 25% of revenues from thermal coal production from its discretionary active investment portfolios. 

Several cities and corporations have also committed to major emissions reductions or achieving carbon neutrality although observers are often skeptical about such pronouncements. Just this week, Walmart committed to reaching zero emissions by 2040 in part by moving away from fossil fuels, while Facebook and Google announced plans to become carbon neutral.