Climate change couldn’t possibly be more real. Elected officials may oppose the idea of “global warming” and related issue. Yet scientists and oil companies have indisputable evidence that our planet is changing due to our consumption of fossil fuels and other environmentally unfriendly products.
Unfortunately, the fossil fuel industry is worth trillions, and isn’t shrinking any time soon. Even worse is how millions of investors own stock in this industry, and don’t want to give up their sweet gains just to help future generations.
While you might not persuade Wall Street to give up on Big Oil and Big Coal, other organizations take a bit less convincing to abandoned their passive destruction of the planet. Some of these institutions are making progress by abandoning their stake in fossil fuels entirely. Through a practice called divestment, billions of dollars’ worth of fossil fuel stock could be put to better use. Want to Put a Stop to the Dakota Pipelines of the World? You Need to Learn About Divestment
What’s a divestment?
An investment is putting money into an asset for the potential of future financial gain. A divestment is pretty much the opposite. Instead of buying an asset and holding it for a while as it grows, divesting involves selling that asset for a variety of reasons. Lately, people concerned about climate change have requested that various schools, companies, and governments divest from fossil fuel companies and invest in green energy companies instead.
Wait, schools, governments, and companies own stocks?
Colleges and universities often make investments like everyone else to make money in the future. Along with revenue generated from tuition and hitting up former students on the regular, this helps them stay afloat, pay staff, and expand their offerings. It’s not unusual to see higher learning institutions own millions or billions worth of stocks, bonds, and other securities. In fact, local governments often do the same thing.
Companies, on the other hand, often make large investments in other companies. Sometimes, they buy enough stock to have a say in how another company is run. Other times, they purchase shares like schools and governments to make more money later. Corporations also manage financial assets like pension plans that include stocks picked by financial professions. It’s relatively common for pension and other retirement plans offered by companies to hold interests in fossil fuel companies.
What does it mean to divest from fossil fuel companies?
You can personally sell all your stock in oil, gas, and coal companies, but your holdings probably aren’t sizable enough to be noticed. If your local government, company, or university sells their investments in the fossil fuel industry, they’re likely selling millions (or billions) of dollars worth of stock. This would have a negative financial impact on the specific fossil fuel company or companies. At the same time, the press generated by such an action would help mar the already-poor image of fossil fuel companies.
By investing in the clean energy sector instead, said organizations would benefit the growing usage of renewable resources that aren’t bad for the environment. Whereas oil is a rather unstable industry with a negative impact on the climate, companies in the solar, wind, and renewable energy business are doing well despite the current political climate. Thanks to the public’s growing disdain for oil, there is more demand for sustainable electric cars, solar energy credits, and other alternative products.
What other companies are targeted in divestment campaigns?
Big banks often own large, controlling interests in the fossil fuel industry. Wells Fargo, for instance, happens to be major investor in the Dakota Access Pipeline. By divesting from major, publicly traded banks that monetarily support Big Oil and Big Coal, organizations can affect their bottom line and potentially persuade them to avoid doing so. ING, a Dutch bank, recently sold their financial interest in DAPL after protests and campaigns that threatened their bottom line.
How can you get organizations to divest from fossil fuels?
In recent years, climate change activists took to raising public awareness through public protests, letter-writing campaigns, and speaking engagements to convince big fossil fuel stakeholders to invest in clean, renewable energy. This involves contacting executives involved in managing an organization’s portfolio and making clearly worded arguments against such investments. Numerous notable names like Leonardo DiCaprio, Barack Obama, and Ban Ki-moon support such actions. The Bill & Melinda Gates Foundation, the city of San Francisco, and the Church of England have all agreed to forego their holdings in fossil fuel securities.
350.org is one of the leading voices of the fossil fuel divestment movement. If you want to get involved or help convince your school or city to divest, they have a wealth of information available on how to get started. The Powershift Network also does substantial work in the divestment movement.