From universities and churches to prominent investment funds, fossil fuel divestment continues to gain traction among diverse groups around the world.
80 percent of global fossil fuel reserves need to remain unburned to avoid global warming more than two degrees above pre-industrial levels, the internationally accepted target for climate policy.
That is the rallying cry of the International Federation of Medical Students’ Associations (IFMSA) in a recent open letter that calls for the Bill and Melinda Gates Foundation and the Wellcome Trust, two of the largest global funders of health research and medical aid, to drop their investments in fossil fuels. Failure to divest is a violation of physicians’ Hippocratic Oath to “do no harm,” the letter asserts. Its authors compare the severity of health impacts from climate change to smoking, noting the medical field’s leadership in the tobacco divestment movement and praising the British Medical Association’s decision to drop fossil fuels last year.
University campuses were buzzing with divestment campaigns throughout April. Students across the U.S., UK and Australia staged protests and rallies urging their schools to divest. Most notably, Swarthmore College students staged a 32-day sit-in to pressure the Board to discuss divestment of its $1.9 billion endowment. While the College decided not to acquiesce to student demands, it created a “Green Fund” that will allow donors to earmark their contributions for fossil fuel-free investments. Swarthmore Mountain Justice, the organizer of the sit-in, says it will press on with its advocacy; it is a matter of time before the College fully divests, the group wrote in a recent post.
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Prominent religious groups also continue to divest. The Church of England announced at the end of April it plans to divest €12m of its €9bn fund in tar sands oil and thermal coal. This follows the World Council of Churches’ decision to rule out future investments in fossil fuel companies last year and the United Church of Christ’s in 2013, as well as Pope Francis’s recent statement on the moral imperative to address climate change. Similarly, the UN officially lent its “moral authority” to the divestment campaign in March, signaling the end of an age of ‘burn what you like, when you like,’ according to a UN spokesperson.
Divestment is not just a cause for idealistic students and moral leaders. From a financial perspective, the risk of stranded assets is motivating some large investment funds to diversify their energy investments. The Rockefeller Foundation committed to divestment last September. Norway’s Government Pension Fund, the world’s largest sovereign wealth fund, revealed in a report that it dropped investments in 114 companies — among them 32 coal mining businesses — based on environmental and climate grounds in 2014.
Last fall, the Guardian reported that 170 foundations and 600 wealthy philanthropists controlling €30bn in investments had committed to divesting in some form, to which Triple Pundit asserted: “The divestment train has left the station.”
In addition, several prominent universities have developed divestment policies over the past year. Last May, Stanford University announced its decision to divest its endowment funds from coal mining companies. In October, Glasgow University became the first UK university to commit to divestment and Australian National University divested its holdings from seven major fossil fuel companies. Last month, Syracuse University announced the end to its direct investment in all fossil fuels and SOAS University of London committed to doing the same within three years.
Cities are also joining the movement. In March, Minneapolis, MN and Great Barrington, MA, along with Lismore and Leichhart in Australia became the latest cities to pass divestment resolutions, while the London assembly voted to pull the City’s £4.8bn pension fund out of coal, oil and gas investments. They join a group of 42 cities that the group Fossil Free currently lists as having adopted some form of divestment commitment.
For all of its momentum, the divestment movement also has critics. Some scholars question its practical benefits in mitigating climate change. A May 6th op-ed in Nature points out that entities selling their fossil fuel shares must still find buyers, and that slightly reduced stock prices are unlikely to impact the global dependence on fossil fuels. Mike Hulme, professor at King’s College London, argued last month in a Guardian op-ed that while the divestment movement may have symbolic value, it is ultimately reductionist and counterproductive; it diverts political attention away from the multitude of causes of climate risk, and it removes potential allies from positions of shareholder influence.
The movement also faces some resistance from notable organizations that decline to divest. In addition to Swarthmore, NYU and Harvard have so far rejected student divestment demands. And while over 200,000 readers have signed the Guardian’s Keep it in the Ground campaign petition for the Gates Foundation and the Wellcome Trust to divest, the two health charities have not yet changed their policies.
Still, divestment advocates contend the symbolism of their growing movement is an important achievement in itself; it represents a key step in raising awareness of the need for a global energy transition.
The Guardian argues divestment is a campaign that “will almost certainly be won with time,” whether by moral or pragmatic lines of argument. With growing social pressure for cleaner energy, expanding renewables sectors, and the potential for stricter GHG regulations, we can imagine both these arguments taking hold; it may well be a matter of time before fossil fuels surrender in our minds and in our markets.