CREDIT: Photo by Jordan Strauss/Invision/AP, File
The divestment movement is really gaining steam – non-coal, non-fossil-fuel powered steam.
Investors representing $2.6 trillion in assets have pledged to cut fossil fuels from their portfolios, a fifty-fold increase from last year. At least 436 institutions have pledged to stop investing in fossil fuels – for moral or financial reasons. Large pension funds and private companies make up 95 percent of the assets, according to analysis released Tuesday by Arabella Advisors.
“If these numbers tell us anything, it’s that the divestment movement is catching fire,” said May Boeve, executive director of campaigners 350.org.
Actor Leonardo DiCaprio, who established a fund for conservation projects in 1998, also announced that he would join the movement by divesting his assets and those of the Leonardo DiCaprio Foundation.
“Mainstream financial views of fossil fuels will never be the same,” Ellen Dorsey, executive director of the Wallace Daniel Fund, said at a press conference Tuesday. “It is increasingly clear that it is neither OK nor smart to be invested in fossil fuels.”
The divestment movement has two primary components: The idea that owning fossil fuel investments is tantamount to funding climate change, and the idea that the fossil fuel industry itself is poised to lose value over the long term.
“The movement has exposed the embedded vulnerabilities in the fossil fuel industries, from carbon reserves that can never be burned to wasting of company funds on continued exploration for new fossil fuels that can never be used,” Dorsey said. “You are increasingly risking the value of your portfolio if you stay invested in fossil fuels.”
Another analysis found that Massachusetts’ pension plan lost half a billion dollars in the last fiscal year through its fossil fuel investments, ThinkProgress reported Monday.
Perhaps unsurprisingly, as the divestment movement’s reach expands, its geographic footprint does, too. Since last year, the number of divesting foundations based outside the United States has increased from 20 to 34 percent, according to Tuesday’s report. Likewise, the number of universities has expanded from 14 to 40, now representing $130 billion in assets.
The diversity of organizations – from religious institutions to universities to giant public pension funds – suggests that divestment is trumping public or corporate pressures.
“When an organization divests, there’s an acknowledgment of the seriousness of climate change and an acknowledgment that some of these [fossil fuel] companies bear some of the responsibility and could be viewed as part of the problem,” Will Lana, a partner at Trillium Asset Management, told ThinkProgress. “It takes a lot of courage for an institution to recognize that, even if it’s clearly the case,” he added.
That’s a far cry from divesting. But the smaller move appears to have been spurred by Pope Francis’ visit to the United States this week. The pope has been outspoken in the need to act on climate change, which has alienated some U.S. Catholics. Georgetown University, another Catholic institution, has already voted to divest from coal.
In addition to DiCaprio, 2,039 other individual investors have pledged to withdraw from fossil fuel investments. And it is becoming easier for people concerned about climate change to track their money. A website launched last week, Fossil Free Funds, allows people to check their mutual funds and retirement plans for fossil fuel investments.