The city of Stuttgart, Germany, home of the automaker Daimler AG, has announced that it plans to divest itself from companies that are not environmentally compliant.
Stuttgart has said that it will not invest in companies that are involved in oil, coal, fracking, shale gas or anything that is genetically modified. The city has approximately US$679 million in investments, which it is in the process of reviewing.
In an email, city spokeswoman Jana Brown stated: "We've hired an adviser to cross check which of the listed companies don't comply with our criteria and no longer qualify for our investments."
Brown said that the city will not provide a list of companies from which it may divest, as it does not want to "name and shame companies." The move is an interesting one, since German cities are not permitted to raise local taxes, and have only limited access to markets to finance their payrolls. Stuttgart is also the site of Porsche SE, Robert Bosch GmbH and around 400 small to medium car-parts companies.
While Daimler's Mercedes-Benz division is developing a line of electric vehicles, auto manufacturers in Germany have only recently begun efforts to produce electric vehicles. The Berlin regional parliament has opted to withhold pension fund investments of approximately US$849 million from companies that fail to meet its climate criteria. The city of Dusseldorf began its divestment policy back in 2007.
Under the Paris accords, every German state is required to find ways to decrease carbon dioxide pollution by 95 percent by the year 2050, so as for divestments with non-compliant companies, there are sure to be more to come.
Six of those states still have major holdings in oil and coal, Der Spiegel said in July. For example, according to the magazine, North Rhine-Westphalia, Bavaria, Saxony-Anhalt and Brandenburg have investments in Total SA, British Petroleum Plc and Royal Dutch Shell Plc and miners such as BHP Billiton Ltd. and Plc.
Lincoln Brown for Oilprice.com
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