Foundation News

Divesting from Dirty Fuels Grows to Massive Movement


By Peter Martin, Executive Director, The Sierra Club Foundation

Taking your investment dollars out of dirty fuels is a good idea, and one that's gaining steam. In fact, Shell Oil's former chairman calls divesting from fossil fuels a "rational response" to the industry's head-in-the-sand approach to climate change.  

This just released report from Arabella Advisors makes it clear that leaders of several of the largest institutions around the world are creating a tidal wave of enthusiasm for divestment. Ultimately for these investors and institutions, investing in fossil fuels is not morally justifiable, and it's not good for business.

For the ethical argument, we can turn to Archbishop Desmond Tutu who said, "Just as we argued in the 1980s that those who conducted business with apartheid South Africa were aiding and abetting an immoral system, we can say that nobody should profit from the rising temperatures, seas, and human suffering caused by the burning of fossil fuels."

The growing list of financial reasons not to invest in fossil fuels is perhaps an even greater factor for divesting. The Arabella Advisors report points out that "Climate risk to investment portfolios is helping drive the exponential growth of divestment. Reports by Citigroup analysts, HSBC, Mercer, the International Energy Agency, Bank of England, Carbon Tracker Initiative, and others have offered evidence of a significant, quantifiable risk to portfolios exposed to fossil fuel assets in a carbon constrained world."

Meanwhile a coalition of the world's largest companies have come together to announce that they are going to power their businesses entirely with clean energy. Some have already gotten there. And it's not just good for marketing and recruiting – many companies see it as a business imperative. When the largest companies in the world are moving away from fossil fuels, it becomes safer and even more sensible for ordinary investors to do the same.   

Several years ago The Sierra Club Foundation was a founding member of the Divest-Invest philanthropy initiative. Back then, there were 17 foundations with a little more than one billion dollars in total assets under management.  Today, 436 institutions and 2,040 individuals across 43 countries and representing $2.6 trillion in assets have committed to divest from fossil fuel companies.

But we realize divestment isn't enough. That's why earlier this year we committed to invest 20 percent of our endowment in climate solutions – and the White House took notice.

We have an unsurpassed opportunity to confront the climate challenge and create a cleaner, more prosperous, and more just society.  But's it's going to take all the tools that we have: tough negotiations in Paris, a strong Clean Power Plan here at home, and hundreds of thousands of people taking to the streets at the local level. Investors, too, must heed the call and put their capital to work to create the world that we all want – and is within our reach.

Join us!

 

Category: News and Updates