This year, thousands of people around the world made Mother Earth their Valentine by celebrating the first annual Global Divestment Day. On February 13 and 14, people banded together to ask their schools, institutions, and local governments to break up with Big Oil, sending a clear message throughout the globe that it is no longer morally, politically, nor financially acceptable to support companies that profit from the destruction of our home sweet home called Earth.
The argument for divestment is pretty simple. About two-thirds of the reserves in the ground must stay there to keep climate change at bay, but the oil, mining, and coal companies base their financial projections on burning it all up. This is just not feasible, as burning all existing reserves has the potential to ruin the planet as we know it, at which point the economy would fall apart.
But can divestment really work, and is it a sound financial move?
Most academics and analysts agree that divestment of schools and public institutions will not itself weaken the capital of fossil fuels. If by divesting you sell your stock to the next investor, capital is just changing hands. However, divestment is not just about the money — it starts climate conversations where there were none before, and sets the tone for what is morally and socially acceptable in our communities. Historically, divestment from Big Tobacco and divestment from companies during the South African Apartheid were extremely successful in shaping public discourse and making big changes.
It’s abundantly clear that burning the fossil fuel reserves in the ground will totally devastate the planet upon which the economy is based. There is no cost for fossil fuels that can make up for the future loss of natural capital: the price of losing our agricultural land, the damage to ecosystems worldwide, or the health of the population. By divesting now, we stand a chance to diminish the costs that future generations will have to pay, and can fuel the movement towards a cleaner planet today.
In every era, we know that industry and progress follow the money, and the case for divestment has recently gotten stronger with the sharp decline in worldwide oil prices. Not only is the cost of oil increasing, the cost of renewables like solar is decreasing. In a study done by the banking firm Lazard, solar energy is roughly 5.6 cents a kilowatt-hour and wind is as low as 1.4, whereas natural gas and coal come in around is 6.1 and 6.6 respectively.
But perhaps the best argument to convince our cities, schools and communities to divest is that it makes great financial sense. Reports show that in the past five years, funds divested from fossil fuels have outperformed the conventional funds. In fact, Business Spectator says that a divestment strategy “can make perfect financial sense. The fossil fuel free index also showed less volatility than the conventional [funds].” So, better returns on investment, less risk of climate disasters, and a healthier world for future generations? It seems like divestment is the sweetest Valentine of them all.
Here’s how you can break up with fossil fuels:
- Join millions at GoFossilFree.org. Add your name to one (or several) of the 450 different petitions across 60 countries. The more your public institution(s) see that climate change is an issue of concern for the community, the sooner we can start a discussion about the long-term consequences of climate action. If there’s no divestment organization in your community, start your own!
- Divest yourself. A recent study done by the Sierra Club and Rainforest Action Network found that major banks and credit card companies, like Wells Fargo, Bank of America, Chase, and Morgan Stanley, give hefty contributions to fossil fuels. If you pay annual fees, transfer fees, or interest to these banks, your funds are supporting coal and oil investment. Consider moving your money to a credit union or a community development bank in your area. To find out how your bank rates, check out Green America’s scorecard.
- Learn more and support the movement. Below are a few great resources to help you learn more about divestment and help us build a greener future for all! Learn more about divestment from the following resources:
- Bill McKibben of 350.org discusses why student-led divestment movements are changing the landscape of fossil fuels. Read more on Rolling Stone.
- The Financial Case for Divestment of Fossil Fuel Companies by Endowment Fiduciaries by The Huffington Post.
- The country of Norway divests from fossil fuels: learn how and why here on Clean Technica.
- Why the discussion is now Peak Carbon instead of Peak Oil by GoFossilFree.
- Learn what happened on Global Divestment Day in February 2015: watch the video from GoFossilFree.
About the Author: Rachel is a recent graduate of the University of Hawai’i at Mānoa, and is the RISE Intern for Oroeco. She is excited to pursue a career in environmental sustainability, and is thrilled to promote Oroeco’s vision of saving money and the planet simultaneously!