From Wikipedia, the free encyclopedia
As of 2020, 1200 institutions possessing 14 trillion dollars divested from the
fossil fuel industry.
Fossil fuel divestment or fossil fuel divestment and investment in climate solutions is an attempt to reduce climate change by exerting social, political, and economic pressure for the institutional divestment of assets including stocks, bonds, and other financial instruments connected to companies involved in extracting fossil fuels.
Fossil fuel divestment campaigns emerged on campuses in the
United States in 2011 with students urging their administrations to turn
endowment investments in the fossil fuel industry into investments in clean energy and communities most impacted by climate change.
By 2015, fossil fuel divestment was reportedly the fastest growing divestment movement in history. In April 2020, a total of 1,192 institutions and over 58,000 individuals representing $14 trillion in assets worldwide had begun or committed to a divestment from fossil fuels.
Motivations for divestment
Reducing carbon emissions
Fossil fuel divestment aims to reduce carbon emissions by accelerating the adoption of the renewable energy transition
through the stigmatisation of fossil fuel companies. This includes
putting public pressure on companies that are currently involved in
fossil fuel extraction to invest in renewable energy.
The Intergovernmental Panel on Climate Change found that all future carbon dioxide emissions must be less than 1,000 gigatonnes to provide a 66% chance of avoiding dangerous climate change;
this figure includes all sources of carbon emissions. To avoid
dangerous climate change, only 33% of known extractable fossil fuel of
known reserves can be used; this carbon budget
can also be depleted by an increase in other carbon emission sources
such as deforestation and cement production. It is claimed that, if
other carbon emissions increase significantly, then only 10% of the
fossil fuel reserves can be used to stay within projected safe limits.
Furthermore, according to the US Environmental Protection Agency,
Earth's average temperature has risen by 0.78 °C (1.4 °F) over the past
century, and is predicted to rise another 1.1 to 6.4 °C (2 to 11.5 °F)
over the next hundred years with continued carbon emission rates. This
rise in temperature would far pass the level of warming that scientists
have deemed safe to support life on earth.
I think this is part of a process
of delegitimising this sector and saying these are odious profits, this
is not a legitimate business model ... This
is the beginning of the kind of model that we need, and the first step
is saying these profits are not acceptable and once we collectively say
that and believe that and express that in our universities, in our faith
institutions, at city council level, then we’re one step away from
where we need to be, which is polluter pays.
Acting on the Paris Agreement
Toronto Principle
This
Agreement [...] aims to strengthen the global response to the threat of
climate change, [...] including by [...] Holding the increase in the
global average temperature to well below 2 °C and [...] Making finance
flows consistent with a pathway towards low greenhouse gas emissions and
climate-resilient development.
The Toronto Principle is a fossil fuel divestment strategy, which puts into action the aims set forth at the Paris Agreement in 2015. It was first coined by Benjamin A. Franta, in an article in the Harvard Crimson, as a reference to the University of Toronto's fossil fuel divestment process.
After 350.org submitted a petition for divestment on 6 March 2014, President Gertler established an ad hoc Advisory Committee on Divestment from Fossil Fuels. In December 2015, the Committee released a report
with several recommendations. Foremost, they argued that "targeted and
principled divestment from companies in the fossil fuels industry that
meet certain criteria...should be an important part of the University of
Toronto’s response to the challenges of climate change."
However, the report went further, and allied itself with the Paris
Agreement. It recommended that the university divest from companies that
"blatantly disregard the international effort to limit the rise in
average global temperatures to not more than one and a half degrees
Celsius above pre-industrial averages by 2050...These are fossil fuels
companies whose actions are irreconcilable with achieving
internationally agreed goals."
Franta identified this response as the Toronto Principle, which,
as he argues, "aligns rhetoric and action. It suggests that it is all
institutions' responsibility to give life to the Paris agreement.
Harvard could adopt this Toronto principle, and the world would be
better for it."
Franta also identified how the Toronto Principle would be put into
practice, which includes "moving investments away from coal companies
and coal-fired power plants, companies seeking non-conventional or
aggressive fossil fuel development (such as oil from the Arctic or tar
sands), and possibly also companies that distort public policies or
deceive the public on climate. At present, these activities are
incompatible with the agreement in Paris."
In adhering to the Toronto Principle, Franta argues that leading
institutions can use their status and power to meaningfully respond to
the challenge of climate change, and act based on the goals at the Paris Agreement.
Ultimately in 2016 the University of Toronto President Meric
Gertler rejected his advisory committee's recommendations, leaving the
Toronto Principle yet to be implemented.
Lofoten Declaration
The Lofoten Declaration (2017) calls for curtailing hydrocarbon exploration and expansion of fossil fuel reserves. It demands fossil fuel divestment and phase-out of use with a just transition to a low-carbon economy.
The Declaration calls for early leadership in these efforts from the
economies that have benefited the most from fossil fuel extraction.
Economic
Stranded assets – the carbon bubble
Stranded assets, which are known in relation to fossil fuel companies as the carbon bubble,
occur when the reserves of fossil fuel companies are deemed
environmentally unsustainable and so unusable and so must be written
off. Currently the price of fossil fuels companies' shares is calculated
under the assumption that all of the companies' fossil fuel reserves
will be consumed, and so the true costs of carbon dioxide in intensifying global warming is not taken into account in a company's stock market valuation.
Known extractable fossil fuel reserves that cannot be burned
in order to prevent dangerous climate change
| Fuel
|
United States
|
Africa
|
Australia
|
China and India
|
Ex-Soviet Republics
|
Arctic
|
Worldwide
|
| Coal
|
92%
|
85%
|
90%
|
66%
|
94%
|
0%
|
82%
|
| Gas
|
4%
|
33%
|
61%
|
63%
|
50%
|
100%
|
49%
|
| Oil
|
6%
|
21%
|
38%
|
25%
|
85%
|
100%
|
33%
|
In 2013 a study by HSBC found that between 40% and 60% of the market value of BP, Royal Dutch Shell and other European fossil fuel companies could be wiped out because of stranded assets caused by carbon emission regulation. Bank of England governor Mark Carney,
speaking at the 2015 World Bank seminar, has stated: "The vast majority
of reserves are unburnable" if global temperature rises are to be
limited to below 2 °C.
In 2019, Carney suggested that banks should be forced to disclose their
climate-linked risks within the next two years, and said that more
information would prompt investors to penalise and reward firms
accordingly.
He warned that companies and industries that are not moving towards
zero-carbon emissions could be punished by investors and go bankrupt.
In June 2014, the International Energy Agency
released an independent analysis on the effect of carbon emissions
controls. This estimated that $300 billion in fossil-fuel investments
would be stranded by 2035 if cuts in carbon emissions are adopted so
that the global mean surface temperature increases by no more than 2 °C.
A report by the Carbon Tracker Initiative found that between 2010 and 2015 the US coal sector had lost 76% of its value including the closure of 200 mines. It found that Peabody Energy, the world's largest private coal mining company, had lost 80% of its share price over this time. This was attributed to Environmental Protection Agency regulations and competition from shale gas.
In 2013, fossil fuel companies invested $670 billion in exploration of new oil and gas resources.
Risk of regulation and carbon pricing
A
2015 report studied 20 fossil fuel companies and found that, while
highly profitable, the hidden economic cost to society was also large. The report spans the period 2008–2012 and notes that: "for all companies and all years, the economic cost to society of their CO
2 emissions was greater than their after‐tax profit, with the single exception of ExxonMobil in 2008."
Pure coal companies fare even worse: "the economic cost to society
exceeds total revenue (employment, taxes, supply purchases, and indirect
employment) in all years, with this cost varying between nearly $2 and
nearly $9 per $1 of revenue." The paper suggests:
This hidden or externalised cost is an implicit subsidy and
accordingly represents a risk to those companies. There is a reasonable
chance that society will act to either reduce this societal cost by
regulating against fossil fuel use or recover it by imposing carbon
prices. Investors are increasingly focused on this risk and seeking to
understand and manage it."
Similarly, in 2014, financial analyst firm Kepler Cheuvreux
projected $28 trillion in lost value for fossil fuel companies under a
regulatory scenario that targets 450 parts per million of atmospheric CO
2.
Competition from renewable energy sources
Competition
from renewable energy sources may lead to the loss of value of fossil
fuel companies due to their inability to compete commercially with the
renewable energy sources. In some cases this has already happened.
Deutsche Bank predicts that 80% of the global electricity market will
have reached grid parity for solar electricity generation by the end of
2017. In 2012, 67% of the world's electricity generation was produced from fossil fuels.
Stanwell Corporation, an electricity generator owned by the Government of Queensland made a loss in 2013 from its 4,000 MW
of coal and gas fired generation capacity. The company attributed this
loss to the expansion of rooftop solar generation which reduced the
price of electricity during the day; on some days the price (usually
AUD$40–50/MWh) was almost zero.
The Australian Government and Bloomberg New Energy Finance forecast the
production of energy by rooftop solar to rise sixfold between 2014 and
2024.
Unstable fossil fuel prices
Unstable fossil fuel prices has made investment in fossil fuel extraction a more risky investment opportunity. West Texas Intermediate crude oil fell in value from $107 per barrel in June 2014 to $50 per barrel in January 2015. Goldman Sachs
stated in January 2015 that, if oil were to stabilize at $70 per
barrel, $1 trillion of planned oilfield investments would not be
profitable.
Morality
The
moral motivation for fossil fuel divestment is based on the belief that
it is wrong to profit from willfully and knowingly damaging the planet,
and especially so when the impacts those damages are borne
disproportionately by those who have benefitted the least from fossil
fuel extraction and use. Philosopher and climate justice campaigner Alex
Lenferna presents these three interlocking moral arguments in favor of
fossil fuel divestment:
- investing in fossil fuels contributes to grave, substantial, and unnecessary harm and injustice;
- divesting from fossil fuels helps fulfill our moral responsibility to promote climate action; and
- investing in fossil fuels morally tarnishes those who do so by
making them complicit in the injustices of the fossil fuel industry.
Effects of divestment
Stigmatization of fossil fuel companies
A study by the Smith School of Enterprise and the Environment at the University of Oxford
found that the stigmatisation of fossil fuel companies caused by
divestment can "materially increase the uncertainty surrounding the
future cash flows of fossil-fuel companies."
That, in turn, "can lead to a permanent compression in the trading
multiples – e.g., the share price to earnings (P/E) ratio of a target
company."
The study also says that:
The outcome of the stigmatisation
process poses the most far-reaching threat to fossil fuel companies. Any
direct impacts pale in comparison.
Financial impact
Despite social effects, direct financial impacts are often reported as negligible by financial research studies.
According to a 2013 study by the Aperio Group, the economic risks of disinvestment from fossil fuel companies in the Russell 3000 Index are "statistically irrelevant".
According to a 2019 analysis by the Institute for Energy Economics and Financial Analysis, the energy sector portion of the S&P 500, which is dominated by fossil fuels, has underperformed the overall index since 1989.
Legal cases
In November 2014, a group of seven undergraduate, graduate, and law students filed a lawsuit at the Suffolk County
Superior Court against the president and fellows of Harvard College and
others for "mismanagement of charitable funds" and "intentional
investment in abnormally dangerous activities" in relation to Harvard's
investments in fossil-fuel companies.
In March 2015, the superior court granted Harvard's motion to dismiss.
The superior judge wrote: "Plaintiffs have brought their advocacy,
fervent and articulate and admirable as it is, to a forum that cannot
grant the relief they seek."
Reaction from the fossil-fuel industry
In October 2014, Exxon Mobil
stated that the fossil-fuel divestment was "out of step with reality"
and that "to not use fossil fuels is tantamount to not using energy at
all, and that's not feasible."
In March 2014, John Felmy, the chief economist of the American Petroleum Institute,
stated that the movement to divest from fossil-fuel companies "truly
disgusts me" and stated that academics and campaigners who support
divestment are misinformed, uninformed or liars. Felmy particularly
criticized the environmentalist and author Bill McKibben.
The World Coal Association
has pointed out that divesting from the fossil fuel industry does not
necessarily result in a reduction of demand for fossil fuels, rather it
would result in environmentally conscious investors losing influence
over the operation of those companies. In fact, coal has been the
fastest growing energy source over the last decade and is an important
raw material for steel and cement in developing countries.
Exponential growth into a global divestment movement
From
half a dozen college campuses in 2011, calling on their administrations
to divest endowments from coal and other fossil fuels and invest in
clean energy and "just transition"
strategies to empower those most impacted by environmental degradation
and climate change, the campaign had spread to an estimated 50 campuses
in spring 2012. By September 2014, 181 institutions and 656 individuals had committed to divest over $50 billion.
One year later, by September 2015, the numbers had grown to 436
institutions and 2,040 individuals across 43 countries, representing
$2.6 trillion in assets, of which 56% were based on the commitment of
pension funds and 37% of private companies.
By April 2016, already 515 institutions had joined the pledge, of which
27% faith-based groups, 24% foundations, 13% governmental
organisations, 13% pension funds and 12% colleges, universities and
schools, representing, together with the individual investors, a total
of $3.4 trillion in assets. In April 2020, the number of institutions had grown to 1192, with a total combined asset value of $14,14 trillion.
Groups involved in divestment campaigns
Fossil Free ANU
In October 2014, more than 82% of ANU students voted for full fossil fuel divestment
The divestment campaign at the Australian National University
is one of the longest running in the world and, while it has not yet
achieved full fossil fuel divestment, it has had substantial wins, most
notably in 2011 and 2014.
Fossil Free ANU formed out of the ANU Environment Collective
(EC), a consensus-based and non-hierarchical group of students
affiliated with the Australian Student Environment Network, when students were notified in 2011 by campaigners at the Northern Rivers, NSW that ANU was the 12th largest shareholders in the coal seam gas company Metgasco.
Following student protests, including an event called 'ANU Gets
Fracked' that saw students erect a mock gas rig in Union Court, the ANU
Council announced in October 2013 that it would divest from Metgasco,
citing student concerns and the fact that the Australian Ethical Investment did not approve of them. Tom Stayner, an activist from the EC, stated in the ANU student paper Woroni that: "He took some convincing, but the Vice Chancellor is showing leadership on this urgent issue."
However, student concerns were again raised in 2012 when it was
revealed that the ANU had only reduced its holding in Metgasco from over
4 million shares in 2011 to 2.5 million in 2012.
In 2013, Tom Swann filed a FOI request to the ANU requesting all
"documents created during 2012, which refer to the University's
purchase, sale or ownership of shares in any company which generates
revenue from oil, coal, gas, or uranium."
These documents revealed that ANU had substantial holdings in major
fossil fuel companies and had been buying shares in Santos while selling
shares in Metgasco.
Students lobbying and public pressure led the ANU Council to implement a
Socially Responsible Investment Policy (SRI) in late 2013 modelled on
Stanford University, which aims to "avoid investment opportunities
considered to be likely to cause substantial social injury."
In 2014, students from Fossil Free ANU organised the first
student-initiated referendum at the ANU and in elections in September
more than 82 per cent of students voted in favour of the ANU divesting
from fossil fuels in what was the highest turnout in a student election
at the university in more than a decade.
In October 2014, the ANU Council announced that it would divest from
seven companies, two of which, Santos and Oil Search, performed poorly
in an independent review undertaken by the Centre for Australian Ethical
Research. This decision provoked a month-long controversy with the Australian Financial Review
publishing over 53 stories criticising the decision including 12 front
pages attacking the ANU, with its editor-in-chief, Michael Stutchbury,
prouncing the decision to be as "disingenuous" as banning the burqa. These attacks, which The Canberra Times editorial described as "verging on hysterical" was joined by members of the cabinet of the Abbott Government, with the Treasurer Joe Hockey
stating that the ANU Council is "removed from the reality of what is
helping to drive the Australian economy and create more employment," Education Minister Christopher Pyne calling it "bizarre" and Prime Minister Tony Abbott calling it "stupid." In response, Louis Klee, an activist from Fossil Free ANU, wrote in The Age that the reaction demonstrated not just "the complicity of state power with the mining industry," but also:
[...] that the citizens of this country are powerful voices in the debate over climate justice.
It demonstrates that they are, ultimately, voices speaking with growing
eloquence, urgency and authority for one thing: action to address
global climate change.
Vice-Chancellor of ANU Ian Young stood by the decision, stating:
On divestment, it is clear we were in the right and played a truly national and international leadership role. ... [W]e seem to have played a major role in a movement which now seems unstoppable.
Meeting
with students in the wake of the furore of the decision, Ian Young told
activists from Fossil Free ANU that while he initially thought
divestment was "a sideshow," the reaction of the mining companies
revealed that students "were right all along."
ANU still has holdings in fossil fuel companies and Fossil Free ANU continues to campaign for ANU to 'Divest the Rest'.
350.org
350.org is an international environmental organization
encouraging citizens to action with the belief that publicizing the
increasing levels of carbon dioxide will pressure world leaders to
address climate change and to reduce levels from 400 parts per million
to 350 parts per million. As part of its global policy, 350.org launched
their Go Fossil Free: Divest from Fossil Fuels! campaign in 2012, which
campaign calls for colleges and universities, as well as cities,
religious institutions, and pension funds to withdraw their investments
from fossil fuel companies.
Divest-Invest Philanthropy
Divest-Invest Philanthropy is an international platform for institutions committed to fossil fuel divestment.
The Guardian
In March 2015, The Guardian launched the 'Keep it in the ground' campaign encouraging the Wellcome Trust and the Bill & Melinda Gates Foundation to divest from fossil fuel companies in which the foundation has a minimum of $1.4 billion invested. The Wellcome Trust has £450m of investments in Shell, BHP Billiton, Rio Tinto and BP. The petition had received over 140,000 signatures by the end of March 2015.
The Guardian itself stopped accepting advertisements from the fossil fuel industry in January 2020.
Fossil Free Stanford
Fossil
Free Stanford is one of the highest-profile university divestment
campaigns in the U.S. In May 2014, the university divested its endowment,
then valued at US$18.7 billion, from holdings in coal extraction
companies following a sustained campaign by undergraduate students. Author Naomi Klein called the divestment, "the most significant victory in the youth climate movement to date."
The campaign maintains widespread support on the campus,
exemplified in multiple all-campus referenda, including in April 2014
and April 2018, in which the student body voted 75 percent and 81
percent in favor of divestment from all fossil fuels, respectively.
The Stanford Undergraduate Senate and Stanford Graduate Student Council
also both passed resolutions calling for full fossil fuel divestment in
2014.
In 2016, the student body Presidents and Vice Presidents from both the
2016–2017 school year and the 2015–2016 school year published a letter
calling for the university's leadership to represent the student
consensus in support of fossil fuel divestment.
In January 2015, a group of more than 300 Stanford faculty
published a letter calling for full divestment, which garnered
international attention. Additional faculty signed on in the following weeks such that the total grew to 457 faculty signatories.
Signatories included a former president of the university, multiple
department chairs, a vice provost, multiple Nobel Laureates, and members
of all seven of the university's schools.
In November 2015, in advance of the UNFCCC COP 21 climate
negotiations that resulted in the Paris Agreement, over 100 students
risked arrest by staging a non-violent sit-in, surrounding the
university president's office for 5 days and 4 nights.
The sit-in ended when the university's president, John Hennessy, agreed
on the fifth day to a public meeting with the student group.
In response to the students' publicized plans to hold this sit-in, the
university's Board of Trustees published a letter to the UNFCCC calling
for bold climate action.
In April 2016, the university's Board announced that it would
take no further divestment action related to fossil fuel divestment. In
response, a group of over 1000 students and Alumni pledged during the
school's graduation ceremonies in June 2016 to withhold all future
donations until the school achieved full divestment.
Divest Harvard
Divest
Harvard is an organization at Harvard University that seeks to compel
the university to divest from fossil fuel companies. The group was
founded in 2012 by students at Harvard College. In November 2012, a referendum on divestment passed at Harvard College with 72% support, followed by a similar referendum at the Harvard Law School in May 2013, which passed with 67% support. During this time, representatives from Divest Harvard began meeting
with members of Harvard University's governing body, the Harvard
Corporation, but the meetings were described as unproductive.
In October 2013, the Harvard Corporation formally announced that the university would not consider a policy of divestment. Following this, Divest Harvard began organizing rallies, teach-ins, and debates on divestment.
In March 2014, students from Divest Harvard recorded an impromptu
exchange on divestment with Harvard President Drew Gilpin Faust, during
which Faust appeared to claim that fossil fuel companies do not block
efforts to counteract climate change. The video has since become a source of controversy.
In April 2014, a group of nearly 100 Harvard faculty released an open letter to the Harvard Corporation arguing for divestment.
This was followed by a 30-hour blockade of the Harvard president's
office by students protesting the president's refusal to engage in a
public discussion of divestment; the Harvard administration terminated
the blockade by arresting one of the student protesters.
Following the protest, Faust said she would not hold the open forum
that students and faculty had requested and would not engage with
students from Divest Harvard.
In May 2014, a group of Harvard alumni interrupted an alumni reunion
event with Faust present by standing and holding a pro-divestment
banner; the alumni were removed from the event and banned from Harvard's
campus.
In September 2014, Harvard faculty renewed their calls for an open forum on divestment and continued to argue for divestment publicly.
In October 2014, Divest Harvard organized a three-day fast and public
outreach event to call attention to the harms of climate change. In November 2014, a group of students calling themselves the Harvard Climate Justice Coalition
filed a lawsuit against the Harvard Corporation to compel divestment on
the grounds of Harvard's status as a non-profit organization.
The lawsuit was dismissed by a Massachusetts Superior Court judge, who
wrote that "Plaintiffs have brought their advocacy, fervent and
articulate and admirable as it is, to a forum that cannot grant the
relief they seek." The plaintiffs have stated that they plan to appeal the decision.
In January 2015, it was revealed that Harvard had increased its direct investments in fossil fuel companies considerably,
and the number of faculty and alumni supporting divestment grew. By
April 2015, the faculty group calling for divestment grew to 250, the Harvard alumni club of Vermont officially voted to endorse divestment,
and Divest Harvard announced the creation of a fossil-free alumni
donation fund that Harvard would receive conditional on divestment.
In February 2015, Divest Harvard occupied the president's office for 24
hours in protest of the Harvard Corporation's continued unwillingness
to engage students on the topic of divestment. This was followed by an open letter from a group of prominent Harvard alumni urging the university to divest. In April 2015, Divest Harvard and Harvard alumni carried out an announced week-long protest called Harvard Heat Week,
which included rallies, marches, public outreach, and a continuous
civil disobedience blockade of administrative buildings on campus. The Harvard administration avoided engaging with the protest.
Following Heat Week, Divest Harvard carried out an unannounced one-day
civil disobedience blockade of the Harvard president's office in protest
of continued lack of action by the Harvard administration.
In November 2019, at the annual Harvard-Yale football game,
over 150 Harvard and Yale students stormed the field at halftime to
demand divestment and the immediate cancellation of holdings in Puerto
Rican debt, delaying the start of the second half by over 45 minutes.
The event was a joint protest led by Divest Harvard and Fossil Free
Yale, and drew extensive coverage from news outlets and on social media,
accompanied by the hashtag '#NobodyWins'.
Fossil Free MIT and MIT Divest
Fossil Free MIT (FFMIT) was a student organization at the Massachusetts Institute of Technology made up of MIT undergrads, graduate students, post-docs, faculty, staff and alumni. The group was formed in Fall 2012 by six MIT students following a visit to Boston by Bill McKibben of 350.org on his "Do the Math" tour.
The group has collected over 3,500 signatures in a petition calling for
MIT to (1) immediately freeze new investments in fossil fuel companies,
and (2) divest within five years from current holdings in these
companies.
Following discussions with FFMIT, the university administration
initiated a "campus-wide conversation" on climate change to take place
from November 2014 to May 2015, which included the formation of the MIT
Climate Change Conversation Committee.
The committee, composed of 13 faculty, staff, and students, was charged
with engaging the MIT community to determine how the university could
address climate change and with offering recommendations.
The conversation included solicitation of ideas and opinions of MIT
community members, as well as a number of public events. The largest
event was a fossil fuel divestment debate among six prominent voices on
climate change that was attended by approximately 500 people.
The committee released a report in June 2015, recommending a
number of initiatives to be undertaken by the university. In regards to
fossil fuel divestment, the committee "rejected the idea of blanket
divestment from all fossil fuel companies"; although there was "support
by (three-quarter) majority of the committee for targeted divestment
from companies whose operations are heavily focused on the exploration
for and/or extraction of the fossil fuels that are least compatible with
mitigating climate change, for example coal and tar sands."
Following the campus-wide conversation, on 21 October 2015, President L. Rafael Reif
announced the MIT Plan for Action on Climate Change. While the plan
enacted many of the committee's recommendations, the university
administration chose not to divest its holdings in fossil fuel
companies, stating that "divestment...is incompatible with the strategy
of engagement with industry to solve problems that is at the heart of
today’s plan."
The following day, Fossil Free MIT began a sit-in outside the
office of the President to protest the shortcomings of the plan,
including the rejection of divestment. Over 100 people overall participated in the sit-in, which received coverage by multiple news outlets, including the Boston Globe, Boston Magazine, and the Daily Caller. The sit-in, which lasted 116 days, ended officially with an agreement with Vice President for Research Maria Zuber
following negotiations about how to improve the Plan. The agreement did
not include divestment, but succeeded in establishing a climate
advisory committee and a climate ethics forum. In addition, the
administration agreed to strengthen the university's carbon mitigation
commitments, striving for carbon neutrality "as soon as possible."
In 2019, the divestment campaign at MIT was restarted by a new student-led group, Divest MIT.
One of their projects has been to engage the MIT administration in a
public dialogue about the effectiveness of the 2015 MIT Climate Action
Plan and set goals for MIT climate action beginning in 2020.
Faith organizations
The
biggest part of fossil fuel divestment commitments come from faith
organizations - 350 from 1,300. On 18 May 2020, 42 faith organizations
declared that they are divesting from fossil fuels. They called for a green recovery from the COVID-19 pandemic. Catholic organisations with 40 billion dollars in assets joined Catholic Impact Investing Pledge.
In 2020 the Catholic Church published a manual called "Journeying
Towards Care For Our Common Home" that explains to Catholics how to
divest from institutions considered to be harmful by the Catholic
Church. Those include fossil fuels, child labour, and weapons. The Vatican Bank claims that it is not investing in fossil fuels with many other Catholic organisations. Pope Francis has called for climate action for many years. He published a call to stop the climate crisis named Laudato si'.
Support for fossil fuel divestment
Support for the divestment movement by politicians and individuals
It
is clear the transition to a clean energy future is inevitable,
beneficial and well underway, and that investors have a key role to
play.
A number of individuals and organisations have voiced support for fossil fuel divestment including:
In March 2015 Mary Robinson, Ban Ki-moon's special envoy on climate change
and former Irish President stated, "it is almost a due diligence
requirement to consider ending investment in dirty energy companies".
Desmond Tutu has voiced support for fossil fuel divestment and compared it to divestment from South Africa in protest of apartheid.
We must stop climate change. And we can, if we use the tactics that worked in South Africa against the worst carbon emitters ...
Throughout my life I have believed that the only just response to
injustice is what Mahatma Gandhi termed "passive resistance". During the
anti-apartheid struggle in South Africa, using boycotts, divestment and
sanctions, and supported by our friends overseas, we were not only able
to apply economic pressure on the unjust state, but also serious moral
pressure.
In September 2020, 12 mayors from the C40 Cities
coalition issued an open declaration in support of fossil fuel
divestment, entitled "Divesting from Fossil Fuels, Investing in a
Sustainable Future."
Support for the divestment movement by investors
A prominent speaker at the 5th annual World Pensions & Investments Forum held in December 2015, Earth Institute Director Jeffrey Sachs voiced for institutional investors to take their fiduciary responsibility in reducing the risk of losses via fossil fuel divestment.
Support for specific fossil fuel divestment campaigns
Harvard University
People on the Harvard campus seeking signatures for Harvard divestment from fossil fuels, May 2015
In February 2015 alumni of Harvard University including Natalie Portman, Robert F. Kennedy, Jr, Darren Aronofsky and Susan Faludi wrote an open letter to Harvard University demanding that it divest its $35.9 billion endowment from coal, gas, and oil companies.
Those students have done a
remarkable job in garnering overwhelming student support for divestment,
and the faculty too have delivered a strong message. But so far
[Harvard] has not just refused to divest, they’ve doubled down by
announcing the decision to buy stock in some of the dirtiest energy
companies on the planet.
— Open letter to Harvard university from notable alumni, 2014,
Harvard's decision not to divest was explained in an open letter from the University President, Drew Faust:
Divestment is likely to have
negligible financial impact on the affected companies. And such a
strategy would diminish the influence or voice we might have with this
industry. Divestment pits concerned citizens and institutions against
companies that have enormous capacity and responsibility to promote
progress toward a more sustainable future.
On
November 23, 2019, at the annual Harvard-Yale football game, about 200
supporters of divestment took over the field to protest Harvard and
Yale's inaction on divestment, disrupting game play for about 30
minutes. Legal charges against ten Harvard students involved in the protest were later dismissed.
On February 4, 2020, the Harvard Faculty of Arts and Sciences
voted 179-20 in favor of a motion demanding that the Harvard Corporation
divest its endowment from fossil fuels.
In 2020, three candidates for the Harvard Board of Overseers were
elected on a platform of climate action and social justice, with fossil
fuel divestment at the center of their campaign.
University of Glasgow
The University of Glasgow became the first university in Europe to agree to divest from fossil fuels. The NSA whistle-blower Edward Snowden commented:
I am proud to offer my support and
endorsement for Climate Action Society’s fossil fuels divestment
campaign. By confronting the threat of unsustainable energy use and
exploration to our planetary habitat, the students of Glasgow University
do a public service for all families of today and tomorrow.
Groups divesting or taking official steps toward divestment by country
United States
Governments and pension funds in the US
Governments
and pension funds in the United States that have partially or
completely divested, or that have taken steps toward divestment, include
(listed alphabetically):
- Amherst, Cambridge, Northampton, Provincetown and Truro, Massachusetts – by 2014, city councils or town meetings in these municipalities passed resolutions calling on pension managers to divest from fossil fuels.
- Ann Arbor, Michigan –
in October 2013, after several rounds of consideration, the city
council voted 9–2 to approve a nonbinding resolution requesting that the
City of Ann Arbor Employees' Retirement System board cease new
investments in the top 100 coal and top 100 gas and oil extraction
companies and divest current such investments within five years.
- Berkeley, California –
in 2013, the City Council voted to adopt an official policy of
divesting from city funds from direct ownership of publicly traded
fossil-fuel companies; the city aims to complete the divestment process
within the next five years.
- Burlington, Vermont –
in December 2014, the Burlington City Council unanimously approved
conducting the study of possible divestment from major fossil-fuel
companies. A task force of city councilors, retirement board members,
public employee representatives and others was appointed to research the
proposal and make recommendations for the city's retirement board
within one year.
- Eugene, Oregon – the City Council unanimously voted in January 2014 to take up the fossil-fuel issue at a future meeting.
- Ithaca, New York – in 2013, Mayor Svante Myrick
stated that the city did not have any investments in fossil fuels and
would not make any such investment for as long as he was mayor. Myrick
also encouraged the pension funds of the New York State and Local
Retirement System, overseen by the Office of the New York State Comptroller, to divest.
- Madison, Wisconsin –
in July 2013, the city adopted a resolution declaring that it is the
policy of the City of Madison not to invest in fossil-fuel companies.
The resolution does not apply to the Madison Metropolitan School District (whose cash balances the city invests) or two municipal mutual insurance corporations of which the city is part-owner. Mayor Paul Soglin and the majority of city council members introduced the resolution.
- New York City – in January 2018, New York City announced it will divest US$5 billion from fossil fuels interests over the next 5 years. In addition, the city is filing lawsuits against BP, ExxonMobil, Chevron, ConocoPhillips and Shell for costs the city faces in relation to climate change.
- Providence, Rhode Island –
in June 2013, the City Council voted 11–1 to enact a resolution
directing the city's board of investment commissioners to divest from
the world's largest coal, oil and gas companies within five years, and
to not make any new investments in such firms.
- San Francisco, California – in 2013, the Board of Supervisors
unanimously passed nonbinding resolution urging managers of San
Francisco Employees' Retirement System to divest from fossil fuels; in
March 2015, the board of the retirement system voted to begin "level-two
engagement", a step toward divestment.
- Santa Monica, California – committed to divestment in 2013 and completed its divestment (of about $700,000) within one year.
- Seattle, Washington – Mayor pledged to divest in 2012, but city and pension fund have not completed process.
- Somerville, Massachusetts
– The city's retirement board voted in 2017 to move 4.5% of its
portfolio into a fund that does not include fossil fuel companies.
Shortly thereafter, the divestment action was blocked by the state's
public pension oversight board on the grounds of fiduciary
responsibility (although a 2019 analysis found that the divested version
of the fund would have had a substantially higher return than the fund
that included fossil fuels).
Since then, efforts to allow home rule petitions and a state bill
giving Massachusetts towns greater control over divestment actions
continue.
- Washington, D.C. – in June 2016, the City Council along with DC Divest
announced that the District's $6.4 billion retirement fund had divested
from direct holdings in the top 200 fossil fuel companies in the world.
Colleges and universities in the US
Students
at Tufts University "marched forth on 4 March" coinciding with dozens
of student-led rallies around the United States. The marches had the
objective of pressuring universities to reduce and eventually eliminate
investments in fossil-fuel related ventures.
Colleges and universities which have partially or completely
divested, or which have taken steps toward divestment, include (listed
alphabetically):
- American University (Washington, D.C.)
- Brevard College (Brevard, North Carolina, USA) – in February 2015, the college's board of trustees approved a resolution to divest the college's $25 million endowment
from fossil fuels by 2018. At the time the decision was made, about
$600,000 (4%) of the college's portfolio was invested in fossil fuels.
The college became the first institution of higher education in the Southeastern United States to divest from fossil fuel.
- California Institute of the Arts (Valencia, California,
USA) – in December 2014, CalArts announced that it would immediately
reduce the Institute's investments in fossil-fuel stocks by 25%
(reallocating about $3.6 million in its portfolio) and would continue to
not make direct investments in fossil fuel. The Institute also
announced that it would "actively monitor the Institute's remaining
carbon exposure and consider strategies that will continue to reduce the
Institute's investments in fossil fuel companies, including seeking to
eliminate exposure to the most carbon-intensive companies such as coal
producers over the next five years."
- California State University, Chico (Chico, California,
USA) – in December 2014, the board of governors of the Chico State
University Foundation, which manages the university's endowment, voted
to change its investment policy and divest of holdings in fossil fuel
companies. At the time the policy was adopted, the foundation had "no
direct holdings in fossil-fuel companies and just under 2 percent of its
portfolio in managed funds that include fossil fuel investments." The
vote calls for excluding any direct investment in the top 200 fossil
fuel companies and liquidating, within four years, all holdings in
managed funds that include investments in fossil fuel companies.
- College of the Atlantic (Bar Harbor, Maine,
USA) – in March 2013, the college's board of trustees voted to divest
from fossil-fuel companies. About $1 million of the college's $30
million endowment was invested in such companies.
- College of the Marshall Islands (Marshall Islands) –
in December 2014 and January 2015, the college announced that its board
of regents would be adopting a policy statement divising its small
endowment (about $1 million) from fossil fuels.
- Cornell University (Ithaca, New York,
USA) – in May 2020, the Board of Trustees voted to divest from fossil
fuels by instituting a moratorium on new private investment focused on
fossil fuels. Investments are expected to grow in alternative and
renewable energy portfolios. The committee's vote includes ending all
current investments in fossil fuels over the next five to seven years.
- Foothill–De Anza Community College District (Foothill College and De Anza College in Cupertino, California,
USA) – the foundation's board of directors voted in October 2013 to
divest from the top 200 fossil-fuel companies by June 2014, becoming the
first community college foundation in the nation to commit to fossil-fuel divestment.
- George Washington University (Washington, DC)
– in June 2020, the college's board of trustees voted to divest from
fossil fuels, which make up about 3% of the college's endowment.
- Goddard College (Plainfield, Vermont,
USA) – in January 2015, the college announced that it had completed its
divestment, moving all of its endowment funds into fossil fuel-free
accounts, becoming the third college in Vermont to do so.
- Green Mountain College (Poultney, Vermont,
USA) – in May 2013, the college's board of trustees approved immediate
divestment from the top 200 publicly traded fossil-fuel companies. Such
investments made up about 1% of the college's $3.1 million endowment.
- Hampshire College (Amherst, Massachusetts,
USA) – in December 2011, in the college's board of trustees approved a
new environmental, social, and governance investing policy which called
for "negligible fossil fuel holdings in our portfolio." The college
announced in October 2012 that it had nearly completed the
implementation of this policy.
- Humboldt State University (Arcata, California, USA) – since at least 2004, the university has had no direct investments in fossil fuel-related industries.
In April 2014, the Humboldt State University Advancement Foundation,
which oversees the university's endowment, unanimously adopted a new
"environmentally responsible offset and mitigation policy" and "Humboldt
Investment Pledge" to strictly limit its holdings in a variety of
industries, including companies directly or indirectly involved in
fossil fuels.
In October 2014, the foundation's board voted to shift 10% of its
overall portfolio to "green funds" (funds with no holdings in fossil
fuels or similar sectors) over the next year, reiterated its policy
against direct investments in fossil fuels, and committed to creating a
new fund invested entirely free of fossil fuels, with the distributions
from the fund earmarked for campus-based sustainability projects.
- Johns Hopkins University (Baltimore, Maryland,
USA) – in December 2017 the Board of trustees votes to eliminate
investments in companies that produce coal for electric power as a major
part of their business.
- Lewis & Clark College (Portland, Oregon,
USA) – in February 2018 the Board of trustees unanimously voted to
divest from all fossil fuel holdings in the school endowment.
- Middlebury College (Middlebury,
Vermont, USA) – in January 2019, the board of trustees of Middlebury
College unanimously voted to pass Energy2028, therefore agreeing to
divest all direct holdings in the fossil fuel industry.
The plan defines these investments broadly, including "all those in
enterprises whose core industry is oil and gas exploration and/or
production, coal mining, oil and gas equipment, services and/or
pipelines." The vote came after years of organizing by the student-run Divest Middlebury campaign.
- Pacific School of Religion (Berkeley, California,
USA) – in February 2015, the seminary's board of trustees voted
unanimously to divest the institution from the 200 largest fossil-fuel
companies (those listed on the Carbon Tracker Initiative (CT200)).
- San Francisco State University (San Francisco, California,
USA) – in 2014, the San Francisco State University Foundation, which
oversees the university's $51.2 million endowment, voted to make no new
investments that would involve "direct ownership of companies with
significant exposure to production or use of coal and tar sands." The foundation also voted to look into future divestment from all fossil-fuel companies.
- Seattle University (Seattle, Washington,
USA) - in September 2018, following student group preassure Seattle
University is the first university in Washington state to divest its
endowment of fossil fuels over the next five years. The action means
that by 2023, Seattle University will no longer invest any of its $230
million endowment in the funds and securities of fossil-fuel companies.
The university will work to achieve a 50 percent reduction by 31
December 2020, and expects to be fully divested by 30 June 2023. "The
moral imperative for action is clear", said Seattle U President Stephen
Sundborg in an announcement. "By taking this step we are acting boldly
and making an important statement … We join with others also at the
forefront of the growing divestment movement and hope our action
encourages more to do the same". Seattle U also becomes the first among
the nation's 28 Jesuit colleges and universities to divest. "It’s
definitely a victory for us", said student Connor Crinion, a member of
Sustainable Student Action, the student group that has pushed for
divestment since 2012. "We’re hoping this might be a milestone" that
will encourage divestment at other schools in Washington, as well as at
other Jesuit universities, he said.
- Stanford University (Stanford, California,
USA) – in May 2014, following an advisory panel's recommendation, the
university's board of trustees voted to divest the investment portfolio
of its $18.7 billion endowment of companies "whose principal business is
coal." This made Stanford the "first major university to lend support
to a nationwide campaign to purge endowments and pension funds of fossil
fuel investments."
- Sterling College (Craftsbury, Vermont,
USA) – the tiny college's board of trustees voted in February 2013 to
divest from the top 200 fossil-fuel companies. The college announced
that it had completed divestment of its $920,000 endowment by July 2013,
with all of its investments in a fossil-fuel free portfolio.
- The New School (New York, New York,
USA) – in February 2015, the New School announced that it would divest
from all fossil-fuel investments in coming years. The school
simultaneously announced that "it is also reshaping the entire
curriculum to focus more on climate change and sustainability."
- Unity College (Unity, Maine,
USA) – in 2008, the college's board of trustees asked its
endowment-management firm to begin decreasing its exposure to large
energy companies (which then made up about 10% of its portfolio). In
November 2012, the board of trustees unanimously voted to divest the
remainder of its fossil-fuel holdings (then about 3% of its portfolio)
over the next five years. The college completed divestment in 2014, three years ahead of schedule. Unity College was the first institution of higher education in the United States to divest from fossil fuels.
- University of California
(Oakland, California, USA) – In September 2019, the University of
California announced it will divest its $83 billion in endowment and
pension funds from the fossil fuel industry, citing 'financial risk'.
- University of Dayton (Dayton, Ohio,
USA) – In May 2014, the University of Dayton's board of trustees
unanimously approved a plan to begin to divest the university's holdings
from the top 200 fossil-fuel companies. At the time of the
announcement, about 5% ($35 million) of the university's $670 million
investment pool was held in such companies. UD became the first Catholic
university in the US to divest from fossil fuels. The plan was publicly
announced in June 2014. The university planned to review its progress in 18 months.
- University of Maine System (Maine,
USA) – in January 2015, the board of trustees of the University of
Maine System unanimously voted to divest from direct holdings in
coal-mining companies. The system's total investments were about $589
million; the decision would affect $502,000 of direct investments in
coal, which amounts to about 30% of the system's total ($1.7 million
exposure to coal, including both direct and indirect investments). Some
board members stated that they would continue to consider full
system-wide divestment in the future. Separately, the University of Maine at Presque Isle, one of seven schools within the system, announced that its own foundation had divested from all fossil-fuel investments.
- University of Massachusetts (Massachusetts,
USA) – in December 2015, the board of trustees of the University of
Massachusetts System announced their plans to divest from direct
holdings in coal companies. Once this decision was released, the
escalation of a four-year student-run campaign, the UMass Fossil Fuel
Divestment Campaign, occurred. A 500 student week long occupation of the
Whitmore Administration Building led to 34 student arrests and a
decision to vote on fossil fuel divestment at the next Board of Trustees
Meeting. On 25 May 2016 it was announced the University of
Massachusetts system would divest its endowment from direct holdings in
fossil fuels, becoming the first major public university to do so.
Foundations and charitable endowments in the US
We see this as both a moral imperative and an economic opportunity.
In September 2014, the Rockefeller Brothers Fund
announced it would be divesting its fossil fuel investments totaling
$60 million. "We are quite convinced that if he were alive today, as an
astute businessman looking out to the future, he would be moving out of
fossil fuels and investing in clean, renewable energy."
Religious organizations in the US
The 2013 general synod of the United Church of Christ
(UCC) passed a resolution (sponsored by the Massachusetts Conference
and ten other conferences of the UCC) outlining a path to divestment of
church funds from fossil-fuel holdings. Under the resolution, a plan for
divestment will be developed by June 2018. The original proposal
considered by the general synod called for a five-year plan to
divestment; this was changed following negotiations between divestment
proponents and the UCC's investment arm, United Church Funds.
United Church Funds also established a denominational fossil-free fund
(believed to be the first of its kind), which raised almost $16 million
from UCC congregations, conferences, and other groups by late September
2014.
In June 2014, the trustees of Union Theological Seminary in New York City unanimously voted to begin divesting fossil fuels from the seminary's $108.4 million endowment.
Banks in the US
In 2019 the Goldman Sachs bank divested from arctic oil, coal thermal mines and mountaintop removal projects
United Kingdom
Local Authorities in the UK
In 2015, the London Assembly passed a motion calling on the Mayor of London to urgently divest pension funds from fossil fuel companies.
The UK government has explicitly warned Local Authorities in the
UK that they may be penalised if they boycott suppliers on the basis of
involvement in fossil fuel extraction so long as it remains government
policy not to boycott.
This makes it challenging for local government to act on boycott even
if it believes it has an ethical or environmental case to do so.
Colleges and universities in the UK
- SOAS, University of London (London, United Kingdom) – in March 2015, SOAS announced it will divest within 3 years. SOAS fulfilled this pledge in 2018.
SOAS was the first university in London to divest and one of the first
in the UK. Its announcement came after a long running student-led
campaign.
- King's College London (London, United Kingdom) – in September 2016, King's College London agreed to invest 15% of its £179 million
endowment in clean energy and to drop investments in the most polluting
fossil fuels. The university currently has exposure to Anglo American, Rio Tinto, and Glencore.
- University of Glasgow (Glasgow, Scotland,
United Kingdom) – in October 2014, the university announced plans to
freeze new investments in fossil fuels and divest from fossil fuel
companies over the next ten years. Hydrocarbon investment made up around
4% of the university's total endowment; about £18 million in such
investments will be withdrawn over the decade-long phaseout. The
University of Glasgow was the first university in Europe to divest from
fossil fuels.
- University of Bedfordshire (Bedfordshire and Buckinghamshire, England,
United Kingdom) – in January 2015, decided to formalize its previously
informal decision "not to invest in specific sectors such as fossil
fuels."
- University of Bristol (United Kingdom)) – a long campaign to make Bristol University divest from fossil fuels took a major step when Carla Denyer,
a Bristol Green Party counciler sitting on one of the University's
governance bodies, tabled a divestment motion in November 2015. Despite initial defeats, the campaign succeeded in March 2017.
As of January 2020, according to student campaigning organisation People & Planet,
over half of UK universities have now made some form of divestment
commitment, pushing the UK further education divestment total above £12
billion.
Religious organizations in the UK
On 30 April 2015, the Church of England agreed to divest £12 million from its tar sands oil and thermal coal holdings. The church has a £9 billion investment fund.
New Zealand
Colleges and universities in New Zealand
- University of Otago (Dunedin, New Zealand) –
in September 2016, the university created an ethical investments policy
excluding investment in 'the exploration and extraction of fossil
fuels'. The University of Otago was the second university in New Zealand
to commit to fossil free investing.
- Victoria University (Wellington, New Zealand) –
in December 2014, the university announced its intention to divest all
its investments from fossil fuels, becoming the first New Zealand university to do so.
Republic of Ireland
Governments and pension funds in Ireland
Ireland is to be the world's first country to divest public money from fossil fuels.
Sweden
Governments and pension funds in Sweden
- Municipality of Örebro
— "The City of Örebro is the first Swedish city to commit to pull its
funds out of fossil fuels, in a move to align its investments with its
environmental goals. Örebro is the 30th local authority worldwide to
take this step, following in the footsteps of cities such as San
Francisco, Seattle and the Dutch town of Boxtel.
Colleges and universities in Sweden
- Chalmers University of Technology (Göteborg,
Sweden) – in early 2015, the university became the first Swedish
university to divest from fossil fuels. The university said it would
sell about $600,000 in fossil-fuel holdings.
EU
European Investment Bank
In November 2019, the European Investment Bank
(EIB), the world's largest international public lending institution,
adopted a strategy to end funding for new, unabated fossil fuel energy
projects, including natural gas, from the end of 2021.
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