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Investing in the future: Divesting from Fossil Fuels

Updated: Oct 2, 2019





Divestment is the antithesis of investment. It involves pulling stocks, bonds, or investment funds from ventures that are unethical. As our very existence becomes threatened by a warming planet, we must drain the lifeblood of fossil fuel industries and invest in ventures that heal and protect.


It is time to stop voting for fossil fuels with our money. It's time to divest.


Divestment calls for more than just defunding oil. It also aims to make peel back the veneer of big oil, exposing its hideousness and unsustainability. Investing in oil companies creates a social acceptance, as investors see the company as a legitimate and necessary entity.


According to divestment campaign Go Fossil Free,


[Investing in oil] contributes to the veneer of legitimacy that enables them to keep expanding operations at a time of climate crisis and to stifle the demands for justice of those communities who live on the front lines of their destructive, polluting operations.”


Making big oil less profitable will wipe away the legitimacy of polluting corporations and expose them for what they really are. Divestment has the real potential of making oil a market pariah while rewarding divestors for reinvesting their money in climate solutions. So far, the results are promising.



B Certified Corporation and divestment leader Genus reported its fossil-free fund had outperformed standard market indices by almost 2 percent per year for the past five years. Genus CEO Wayne Wachell celebrated the success of divestment in a statement for The Guardian:


At the five-year mark, we can conclusively say: divesting from fossil fuels pays.


Over six trillion dollars is committed to fossil fuel divestment funds, with nearly 1,000 institutional investors having made the pledge. Insurance companies are leading the charge in divestment as they realize the heavy cost of insuring a self-destructing fossil-fuel-based industry. No insurance policy will be able to protect against the rising tide of the status quo. Better to prevent an insurance claim than react to an emergency, which is why thousands of institutions are taking a proactive rather than reactive approach to divestment.


The divestment movement started on U.S. college campuses in 2011, and has since expanded to include the first nation to divest (Ireland), cities such as New York, and major hospitals and medical institutions. And further divestment is likely to skyrocket in the next year.


Some experts estimate total divestment fund assets to reach $10 trillion by 2021. These same experts recommend investing in clean energy and pulling funding from polluting corporations. As the world catches on to the imperative of climate solutions, green energy and subsidiary industries will become more lucrative for investors and oil will become a riskier investment. As green markets rise, dirty oil falls.


That's why Ellen Dorsey of the Wallace Global Fund recommends investors commit at least five percent of their portfolios to planet-friendly investments.


Financial management gurus like Jeremy Grantham believe divestment is a the way of the future regardless of moral convictions. To Grantham, divestment is just smart business sense.

Investors with long-term horizons should avoid oil stocks on investment grounds. They face a sustained headwind. Ethical arguments for divestments are simply not necessary. They are a pure bonus.


As world governments gets tougher on climate change and fossil fuels, big oil companies are almost certain to take a hit. Large banks are getting nervous about funding oil exploration, and many insurance companies are refusing to underwrite future oil developments. Dirty corporations' fall from power is inevitable. Divestment is just speeding up the process, and saving the planet from further devastation.


Not surprisingly, big oil has done nothing to realistically reduce oil production. In clear defiance of the Paris agreement, big oil doesn't see fossil fuels as belonging in the ground.


Carbon Underground 200 identifies the top 200 global fossil fuel companies. Their estimates suggest these 200 companies' reserves total 492 gigatons of potential CO2 emissions , an amount six times the world's carbon budget to have an 80 percent chance of limiting global temperature rise to 3.6 degrees F (2 degrees C).


Unlike many other movements, divestment spurs incredible social and environmental change by hijacking the laws of supply and demand. Most movements begin on the basis of ideology alone and are often too risky a venture to get the attention of investors. Divestment is not only firmly rooted in ideology, but holds promise to pay almost immediate dividends for shareholders. That means the same market phenomenon that put the world in the headlock of fossil fuels can be harnessed for good through divestment. Through market economics, fossil fuels will phase out and climate solutions will take its place.


The divestment solution is a powerful weapon marrying economics, science, and activism. And in an exceedingly rare phenomena, climate crusaders and the stock market will yield it together.


This is our moment for climate activism take a practical and sustainable foothold in the market. Divestment is redeeming the broken economic system, turning stocks that hurt into stocks that heal.


Divestment takes big oil to task for the role it has played in decimating the planet. By naming the moral culpability of big oil and its role in climate change and defunding any polluting corporation, divestment will sever the parasitic co-dependency between fossil fuels and humanity.



Here are additional steps to make your voice heard.


• Get your Tribe together. Gather around a group of revolutionaries passionate about using the market to effectuate environmental and social change.


• Make a pledge to reduce consumerism and stay connected in a collaborative effort. Carefully scrutinize what you buy, and reject any goods produced by companies whose production methods harm the planet and its people. Buy from great B Certified Corporations that have made a pledge to protect the planet and marginalized peoples.


• Organize with like-minded groups, individuals, and organizations to host educational presentations. This a great way to expand your Tribe and increase the collective voice.


• Head over to Go Fossil Free to catch up on the latest divestment news and explore how divestment is changing the world. For a list of the top 200 fossil fuel companies, click here.

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